UK delays action on large-scale BECCS projects

The U.K. government on March 30 announced that eight projects will move forward as part of its carbon capture, usage and storage (CCUS) initiative. The government has decided not to advance any large-scale bioenergy with carbon capture and storage (BECSS) project at this time but indicated plans to do so in the future.  

As part of its announcement, the U.K. government said projects under development by Drax Power Ltd. and Lynemouth Power Ltd. were not selected to take part in Track-1 of its CCUS sequencing process. The U.K. Department for Business, Energy and Industrial Strategy, however, said it will continue to engage in with both BECCS projects and stressed that Track-1 is not the extent of the government’s CCUS ambition.

BEIS in August 2022 began accepting submissions from BECCS projects that wanted to take part in Track 1 of its CCUS sequencing process, which is part of the government’s Net Zero Strategy. The Cluster Sequencing Process, launched in May 2021, aims to deliver at least two CCS clusters by the mid-2020s and four clusters by 2030. 

Solicitation of BECCS projects followed a public consultation opened by BEIS in August 2022 to explore commercial frameworks sustainable for incentivizing the deployment of first-of-a-kind (FOAK) BECCS projects. BEIS released the results of that public consultation on March 30 as part of a larger energy announcement focused on the U.K.’s plans to scale up affordable, clean, homegrown power.

In its response to the BECCS consultation, BEIS sets out a Dual Contracts for Difference (CfD) model to support investment in power BECCS. The agency said the Dual CfD model precedents set in the CfD scheme and in other CCUS business models. A key priority of the model is to give investor confidence while ensuring affordability and value for money, according to BEIS.

BEIS also said it is developing sustainability criteria for BECCS that will build on existing criteria and the forthcoming Biomass Strategy, which the agency said will be published during the second quarter of 2023.

Moving forward, BEIS said its next steps will be to continue to progress business model development and engagement with interested parties. The agency said it will work closely across government to ensure that, where appropriate, there is alignment with emerging policy across the greenhouse gas reduction (GGR) business model, U.K. Emissions Trading Scheme and Review of Energy Markets Arrangements, the Net Zero Growth Plan and the Energy Security Plan, and that its policy is in line with the forthcoming Biomass Strategy. BEIS said it intends to publish a report led by the Department for Energy Security and Net Zero Chief Scientific Advisor’s Task and Finish Group, which sought to establish an evidence-based position on the validity of BECCS as a CCR option to deliver negative emissions.

As it develops BECCS policy, the BEIS said it plans to continue to engage with industry, NGOs and other interested parties through a series of engagement sessions. The agency plans to use these engagement sessions to gather further evidence and develop its design of the business model.

Drax released a statement in response to the BEIS announcement, stressing that the U.K. government has conformed its commitment to support the development of large-scale BECCS projects by 2030 and that the BECSS project at Drax Power Station has passed the deliverability assessment for the government’s Power BECCS project submissions process.

Drax also confirmed it has been invited to enter formal bilateral discussions with the U.K. government immediately, to move its BECSS project forward.

“Delivery of BECCS at Drax Power Station will help the U.K. achieve its net zero targets, create thousands of jobs across the north and help ensure the U.K.’s long-term energy security,” said Will Gardiner, CEO of Drax Group.

“We note confirmation that our project has met the Government’s deliverability criteria and Government remains committed to achieve 5Mtpa of engineered Greenhouse Gas Removals by 2030 – a goal that cannot be achieved without BECCS at Drax Power Station,” he continued. “We will immediately enter into formal discussions with Government to take our project forward.

“With the right engagement from Government and swift decision making, Drax stands ready to progress our £2bn investment program and deliver this critical project for the U.K. by 2030,” Gardiner added.

The U.K. Association for Renewable Energy and Clean Technology (REA) called the U.K. government’s decision not to yet advance the Drax and Lynmouth BECSS projects disappointing. “This further postpones the deliver of BECSS in the U.K., while countries like the U.S. are providing direct support for their delivery,” the REA said in a statement.

“It is frustrating that Government continues to string out its decision making on how it wishes to deliver bioenergy carbon capture and storage (BECCS),” said Mark Sommerfeld, head of power and flexibility for Biomass U.K., a division of REA. “BECCS is the only carbon capture solution that actively leads to negative emissions while also generating low carbon power. Earlier this month, the Climate Change Committee (CCC) reiterated that the delivery of BECCS was critical to realizing our 2050 net zero targets and delivery of a decarbonized power system by 2035.

“While other nations such as the U.S. are surging ahead in directly supporting BECCS, utilizing expertise fostered in the U.K., the Government have again postponed its decision on delivering two of largest and most advanced BECCS projects in the world,” he continued.

“At the same time, since the Government has made their initial assessment, BECCS projects on a range of medium size biomass sites have also significantly advanced but have not yet been given any indication of a clear route to market, despite the 2 GW of installed capacity and significant potential for realizing carbon removals. Such projects must be clearly included in future allocation processes for carbon capture support.

“These delays are stopping investors from committing to the U.K. while also being attracted to other markets,” Sommerfled added. “Government must now address these delays and make clear how they intend to see BECCS delivered at a range of scales as matter of urgency.”