UK needs clean coal for new energy policy: government

LONDON Mon Aug 16, 2010 9:19am EDT

LONDON (Reuters) - New UK coal-fired power plants will need to fit carbon removing technology to comply with the upcoming Emission Performance Standard (EPS), energy and climate change secretary Chris Huhne said on Monday.

The British government is to consult in autumn on the EPS, which aims to limit carbon emissions from power generators and is expected to influence whether utilities build coal or gas power plants.

"It would be impossible for any new coal power station to be built without being equipped with carbon capture and storage (CCS)," Huhne said in a statement.

"While the details of an Emissions Performance Standard are still being finalized, we are clear that without CCS it would be impossible to meet such a standard."

In its Annual Energy Statement published on June 27, the government said the EPS would be part of the Electricity Market Reform consultation in autumn with a subsequent white paper in spring 2011.

Although meant to cut carbon emissions, some industry observers are calling for the government to exercise caution when setting the cap.

They warn a limit that is too generous would freeze out CCS, which has no emissions, and encourage gas power plants, which emits between a half to a third of the carbon of non CCS coal plants, making an 80 percent carbon reduction by 2050 more difficult.

A report published on Monday by consultancy Arthur D. Little also questioned whether the government's Annual Energy Statement was achievable, suggesting that targets to cut carbon by 34 percent levels by 2020 should be pushed back to 2023 to ensure there was enough time to plan a clear energy policy.

In June's Annual Energy Statement, Huhne said the era of cheap energy was over, and that customers should expect higher bills as utilities built expensive renewable generation and new fossil fuel power plants to replace Britain's aging fleet.

(Reporting by Kwok W. Wan; editing by Alison Birrane)