Companies are still waiting to hear full details from the UK govenment on how it intends to provide £1bn in funding for CCS projects, as promised in the spending review.
Eon recently announced that the uncertain economic conditions meant it would pull out of its plans to build a coal-fired CCS plant at Kingsnorth. Meanwhile, industry leaders have warned that providing the financing only by guaranteeing a floor to the carbon price would not be enough incentive for companies to build the expensive plants.
So the news that the European Commission will announce a “prize” to fund CCS and renewables projects will be very welcome for some.
I broke the story this morning that since 2003, energy companies had been forced to sign potentially damaging contracts if they wanted to lease a part of the seabed on which to build an offshore wind farm.
The terms of the lease stipulated that the Crown Estate, on the government’s request, could force them to terminate the lease, without compensation, if the plot was needed for oil and gas works.
Today, energy minister Charles Hendry has been defending the system to the FT, saying he expected oil and gas companies to find a way of getting on with the offshore wind industry.
“We would expect compensation [from the oil and gas companies], getting them to find a way to work together.”