Carbon capture and nuclear lead clean energy plan
A £20 billion investment in carbon capture projects will be unveiled next week by Chancellor Jeremy Hunt along with backing for small-scale nuclear reactors.
Mr Hunt’s Budget statement will include the package of support for what is billed as the next generation of clean energy projects, delivering 50,000 jobs.
As an indication of the urgency now being applied to net zero measures, he will commit to ‘spades in the ground’ ‘on these projects from next year.
However, there is no indication that the Acorn project in north east Scotland will be promoted from the reserve list to join the four carbon capture usage and storage (CCUS) hubs that have been approved. North West England and North Wales, along with the East Coast Cluster in Teesside and Humber, have been selected as Track 1 Clusters for deployment by the mid-2020s.
The Scottish Affairs Committee issued a report on Friday calling for Acorn, based at St Fergus, Aberdeenshire, to be included. It lost out when the approved sites were announced in 2021– despite it being promised in the 2015 Conservative manifesto.
No one country has yet fully embraced the carbon capture market but the UK has enough carbon capture capacity to store over a century and half of national annual CO2 emissions, making it one of the most attractive carbon capture markets on earth.
The carbon capture projects will store 20-30 million tonnes of CO2 a year by 2030, equal to the emissions from 10-15 million cars.
The Chancellor will also announce plans to boost nuclear power generation through Great British Nuclear, launching a competition for the first Small Modular Nuclear Reactors, revolutionising how nuclear projects are delivered in the UK.
Scotland will not be part of this project either because of the Scottish Government’s opposition to nuclear, despite governments across Europe now ready to embrace nuclear in the green energy sector.
Mr Hunt said: “Without Government support, the average household energy bill would have hit almost £4,300 this year, which is why we stepped in to save a typical household £1,300 on their energy bills this winter.
“We don’t want to see high bills like this again, it’s time for a clean energy reset. That is why we are fully committing to nuclear power in the UK, backing a new generation of small modular reactors, and investing tens of billions in clean energy through carbon capture.
“This plan will help drive energy bills down for households across the country and improve our energy security whilst delivering on one of our five promises to grow the economy.”
Energy Security Secretary, Grant Shapps said: “Putin’s illegal invasion of Ukraine has demonstrated to the world the vital importance of increasing our energy security and independence – powering more of Britain from Britain and shielding ourselves from the volatile fossil fuels market.
“Already a global leader in offshore wind power, we now want to do the same for the UK’s nuclear and carbon capture industries, which in turn will help cut the wholesale electricity prices to amongst the lowest in Europe.
“Today’s funding will play an integral role in delivering that, helping us further towards our net zero targets and creating green jobs across the country.”
Small Modular Reactors are emerging technology, and no country has yet to deploy one. The government will match a proportion of private investment.
The government is already investing £210 million into the Rolls-Royce SMR project, matched by private sector funding. Rolls’ Royce reactor design is currently being assessed by safety regulator, the Office for Nuclear Regulation.
Great British Nuclear will streamline and coordinate the delivery of new nuclear power plants to meet the country’s ambition of up to 24 Gigawatts of nuclear power by 2050.
The government body will select sites for potential nuclear projects, removing costs, uncertainty, and bureaucratic barriers for manufacturers as they develop their proposals. To support future sites for nuclear development, the Government will also be consulting on a new approach to nuclear site selection later this year.
There will also be a laser focus on how to attract more investment into the sector, with the Chancellor confirming that nuclear power generation will be classed as “environmentally sustainable” under the green taxonomy regime, subject to consultation, encouraging significant private investment.
Last year, the Chancellor confirmed reforms to EU-derived Solvency II regulation, which will unlock £100bn of private investment into infrastructure and clean energy over a decade.
The UK Government has already invested a £700 million stake in Sizewell C – the UK’s first investment in a nuclear project for 35 years – to provide power to the equivalent of six million homes for over 50 years.
This aims to shore up UK energy security and create 10,000 jobs, while efforts continue to bring Hinkley Point C to completion, the first new nuclear power station in a generation.
This is all part of our plans to transform our homegrown energy supply, investing in renewables and nuclear power, and maximising North Sea oil and gas production as we transition to net zero. All of which crucially brings skilled jobs, prosperity, and growth as we build a cleaner, greener, more secure economy.