UK carbon capture plan should include gas: adviser

LONDON (Reuters) - The Committee on Climate Change has advised the British government to include a natural gas carbon capture and storage demonstration project in plans to develop new, cleaner coal plants from 2020, it said on Friday.

The government intends to phase out conventional coal power generation and replace it with coal CCS from 2020, but there have not yet been any plans to phase out conventional gas-fired generation.

In a letter to Chris Huhne, the UK's secretary of state for energy and climate change, the advisory body said "serious consideration" should be given to funding at least one gas carbon capture and storage (CCS) demonstration project as part of the four coal CCS plants already committed to.

The committee said there was new evidence to suggest gas CCS was competitive. A 25 gigawatt gas-fired plant on the UK system by 2020 would be suitable for retrofit with CCS.

"Our analysis suggests that gas CCS could be around 10 pounds per megawatt hour cheaper than coal CCS at a gas price of 75 pence per therm as in DECC's (Department for Energy and Climate Change) central scenario for 2030," it said in the letter. CCS has not yet been proven at large-scale but is thought to be able to significantly reduce emissions of carbon from burning coal and gas to produce electricity.

Britain aims to reduce carbon dioxide emissions by 80 percent by 2050 from 1990 levels, requiring the power sector to shift existing generation to low-carbon technology by 2030.

The committee also said the government should consider extending its Emissions Performance Standard (EPS) to require that any new gas plant from 2020 should be fitted with CCS.

The coalition government said in May said it would establish an EPS to prevent coal-fired power stations from being built unless they were equipped with sufficient CCS technology, but it did not mention an EPS for gas.

"We are not proposing that an Emissions Performance standard should cover retrofit of plants added to the system in the period to 2020, given uncertainties over the economics of retrofit and the need for investment in conventional gas fired generation over the next 10 years to maintain security of supply," the committee added.

The Committee will publish a report to Parliament on the government's progress in reducing emissions on June 30.

(Reporting by Nina Chestney; Editing by Jane Baird)