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The consultation’s aim was to seek opinions to possible amendments to the ‘Contracts for Difference (Definition of Eligible Generator) Regulations 2014’, in order to “specify that retrofit Carbon Capture Storage (CCS) projects” could in fact be eligible for a Contract of Difference (CfD).
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If this becomes policy, it could open the way for companies like Shell and SSE to apply for funding to add carbon capture and storage (CCS) technology to existing gas plants, like the one in Peterhead, Scotland.
A Shell spokesperson noted that the company was following the impact of the consultation and looked forward to a decision by the UK government.
The UK government has already committed £1 billion ($1.54 billion) for various CCS projects, including the plant at Peterhead as well as the White Rose project developed by Drax and Capture Power Ltd. In Yorkshire.
Theo Mitchell, policy manager at the Carbon Capture and Storage Association, said that the rule change is “important not only for the Peterhead project… but also in terms of future-proofing the CfD policy.
“If we do see lots of new gas plants coming forward it is important to ensure that capacity can be retrofitted with CCS and participate in the regime,” he added further.
The Contracts for Difference (CfD) is a system introduced by the British government that demarcates a number of projects that are guaranteed a minimum price by which they can sell electricity. Interested parties bid for CfD contracts in an auction-style system.