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UK to expand decarbonisation requirements for combustion power plants

UK: decarbonisation requirements extended to all sizes of combustion power plants (Photo: Getty Images)
UK: decarbonisation requirements extended to all sizes of combustion power plants (Photo: Getty Images)

The UK government plans to remove the 300MW threshold to include smaller plants, extending “decarbonisation readiness” requirement to all but the specifically exempt.

The UK government has rebranded a pillar of its carbon capture strategy, and increased the scope of rules designed to accelerate the decarbonisation of the electricity network.

According to a new consultation launched on March 13 by the Department for Energy Security and Net Zero, the new “decarbonisation readiness” requirements would apply to all eligible combustion power plants of any size, with the removal of the current 300 megawatt minimum capacity threshold.

The new rules will apply to all combustion power plants except those specifically exempt from the regime (for example, those sized below 50MW on an offshore platform); those that already have carbon capture technology fitted; or those that have already been moved to hydrogen.

The government is also expected to announce £20bn in carbon capture technology investment this week, when chancellor Jeremy Hunt delivers the Budget on March 15.

Distorted market

The previous “carbon capture readiness” rules were introduced in 2009 to ensure all new combustion power plants had “a viable route to decarbonisation” but at that time, most newly built plants had capacities of over 300MW.

In a 2021 consultation, the government proposed renaming the rules “decarbonisation readiness requirements”, and said removing the minimum capacity threshold would simplify the rules, eliminate “a potential market distortion” and help to decarbonise the UK’s electricity infrastructure.

The government received 34 responses to its 2021 call for evidence on its carbon capture requirements, most of which supported removing the 300MW capacity threshold.

It has admitted that the 300MW limit has distorted the market, noting the rules did not apply to many new gas-powered plants, since they came in just below the threshold. Since 2017, almost 80 per cent of new gas-fired capacity secured through the capacity market scheme – which offers providers stable revenues in return for delivering energy during times of volatility – have been below 300MW. 

In January 2023, the government launched a consultation into reforming the capacity market, with a view to lowering the emissions limit for new oil and gas plants from 2034 and encouraging decarbonisation. 

The government would define a “fully decarbonised” plant as one that has installed and continuously operated 100 per cent hydrogen-firing generation. Alternatively, a plant could have a minimum 90 per cent carbon capture rate of its facility CO₂ emissions, or the capture rate for the available techniques that are optimal for preventing environmental impact, whichever is higher.

The requirements will be moved from the planning consent process to the environmental permitting process and fall under the scope of the Environment Agency. The government believes this will make it easier to amend the requirements in response to market or technical changes.

The latest consultation has also proposed including biomass, energy from waste, and combined heat and power technologies within the decarbonisation readiness rules.

A service from the Financial Times