London (Platts)--13Dec2012/915 am EST/1415 GMT

European power industry association Eurelectric on Thursday warned EU and national government policy-makers that the time is "now or never" for deployment of demonstration projects for carbon capture and storage technology.

European governments in 2008 backed plans for the EU to fund up to 12 CCS projects, which use technology to capture carbon dioxide emissions from coal- gas- or other fossil-fired power plants and can store it in underground geological formations like disused gasfields or salt caverns. But the 2015 target is "clearly out of reach" according to Eurelectric.

"Eurelectric is of the view that Europe needs to show a sense of urgency in demonstrating CCS if it is to live up to its potential as a climate technology. Further discussion on the pros and cons of the technology at this stage would be unhelpful," the association said.

"If we cannot demonstrate the technology now, Europe could become locked into a considerably higher-cost trajectory to decarbonization. Diversity of the energy mix could also be threatened," Eurelectric said.

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It said experience in the renewables sector, especially solar photovoltaic, showed Europe had everything to lose in surrendering its technological leadership, as has been the case with China in PV.

REALLOCATE FUNDS

It called on the European Commission to immediately put forward legal changes that would allow reallocation of funds already allocated to CCS projects that are not going ahead, such as Germany's Janschwalde.

It also urged national governments to fully transpose the EUS CCS directive "without further delay... otherwise they risk jeopardizing the uptake of the CCS demo program."

And it further urged national governments to use the proceeds from the auctioning of emissions allowances under the NER-300 program to support the uptake of CCS under their own national programs.

Finally, Eurelectric called on the EC to look at "Europeanizing" or at least regionalizing some of the projects being funded by the EU, for example through the pooling of resources into projects with the highest chances of succeeding in demonstrating the technology.

The aim of the CCS demonstration program was to have 12 CCS projects up and running by 2015, but in October research from the Global CCS Institute concluded that only five or six major CCS projects would be built by then.

Six major projects, including Janschwalde and Longannet and Peel Energy in the UK have already been canceled.

--Paul Whitehead, paul_whithead@platts.com
--Edited by Jeremy Lovell, jeremy_lovell@platts.com

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