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With green energy investment all the rage, it’s a brave — or possibly foolish — government that puts its support behind fossil fuels. Yet that’s what Britain’s ruling Labour Party has just done. The Brits are looking to build as many as eight new coal plants — the first coal investment in almost 30 years — to offset the country’s growing dependency on natural gas. Up to five nuclear power plants also are planned by 2020.
What’s interesting, though, about Britain’s plans for heavily-polluting coal is the emphasis on offsetting its CO2 emissions. On Apr. 23, the country’s energy and climate change minister, Ed Miliband, announced plans to fund up to 4 demonstration projects — each roughly half the size of a regular coal plant — for technology called Carbon, Capture, and Storage (CCS). Miliband also said no new coal plants would be built until the pilot projects were up-and-running, and that any new facilities would have to be retrofitted with CCS technology. No investment figures were released, though the multi-billion dollar funding is expected to come from the European Union and a levy on consumer electricity prices. More details are expected by late summer, 2009.
So what's the big deal? For many, CCS remains the holy grail of energy generation. In short, the process traps carbon dioxide before it's emitted into the atmosphere, transports it through pipelines to storage facilities, and then pumps the CO2 underground where it can't escape into the atmosphere. If successful -- and to be fair, no full-scale project yet exists -- it could turn CO2-emitting power plants into eco-friendly electricity producers. Opponents say CCS would prolong the use of fossil fuels, and misdirect investment away from clean energy technology.
A lot of detail still is missing from Britain's CCS plans, but the Apr. 23 announcement bodes well. Consultants Emerging Energy Research reckon $20 billion will be spent on CCS projects this year. That includes 50 schemes worldwide that will generate 16 Gigawatts -- equivalent to 20 regular coal-fired power plants -- of electricity. With the Brits throwing their weight behind the technology, that could increase the chance of moving CCS from a mere theoretical idea to an actual investment opportunity.
For the technology to take off, analysts say someone must stump up the cash to build a full-scale CCS-installed plant. Several European utilities already have small, demonstration projects on the go, but haven't taken it any further because of the prohitive costs. So by coupling the construction of new coal plants with CCS investment, the Brits could have moved one step closer to taking the technology into the mainstream. A lot now will depend on the project's so-far unreleased details.
BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.