Changes to the carbon capture readiness requirements

BEIS has published a call for evidence on changes to the Carbon Capture Readiness (CCR) requirements. The proposed changes would significantly expand the categories of plants that would have to demonstrate they are decarbonisation ready as part of their permitting process, and it is important that all developers of thermal generation plant (including bioenergy) follow these developments.

As part of this expansion the CCR requirements have been renamed the 'Decarbonisation Readiness' (DR) requirements to reflect the expanded scope. The requirements will continue to apply to only England and Wales. We have summarised the key proposals below.

Removing the 300MW threshold and increasing the scope

Currently, in order to secure planning permission, generation plants of 300MW or more (subject to exceptions) are required to have space set aside for carbon capture technology. BEIS is considering removing the 300MW limit in order to remove market distortion for plants sized over 300MW and support the rapid decarbonisation of the electricity system. The effect would be to include small distributed generation such as gas peaking facilities.

The proposals are intended to apply to both refurbishing and building new combustion power plants in the scope of the DR, although other existing combustion power plants would not be included. Quite what qualifies as refurbishment is being considered.

BEIS is also considering applying the DR requirements to a wider range of generation plants, including heat generation, biomass energy from waste (EfW) and combined heat and power (CHP), on the basis that these plants may still emit significant amounts of carbon dioxide, and to encourage decarbonisation of these technologies. Furthermore, BEIS has noted that is needs to consider if combustion plants used only for heat should be covered by the DR.

Moving from the planning permission process to the environmental permitting process

It is proposed that the DR would be moved from the planning consent process to the environmental permitting process. The rationale given by BEIS is that:

• a large number of projects that have already received development consent under the Planning Act 2008 but have not yet been built (and presumably have not yet secured their environmental permits) could then be subject to the DR when they come to apply for their permits;
• for plant below 50 MW in England and 10 MW in Wales, planning consent is via the town and country planning regime administered by local authorities, some of whom lack sufficient capability, resourcing and/or expertise to assess DR, whereas the environmental regulators do have technical expertise (if not necessarily expertise to assess economic feasibility of implementing carbon capture solutions). Indeed, the Planning Inspectorate currently consults with the environmental regulators on CCR elements of relevant planning consent applications;
• it allows DR to be applied to refurbishment, although we note that refurbishment may also require planning permission and on the other hand does not necessarily require a permit variation;
• environmental permitting is according to BEIS a more flexible regime allowing the DR to be amended and updated more readily, as technology and policy develops; and
• the environmental regulators have tried and tested systems for compliance monitoring, inspection and audit, reporting and enforcement, and paying permitting fees & charges.

BEIS also acknowledges there are certain negatives in making the change:

• where development consent is granted before the environmental permit is issued, there is a risk of having to amend the development consent to accommodate the permit's DR requirements. However, this is not an issue particular to DR, it also applies for example to required minimum/maximum stack heights where the planning and environmental authorities often have differing objectives. The call for evidence notes that "developers are encouraged to pursue such considerations linked to their applications for an environmental permit and planning consent in parallel", in order to minimise issues around alignment;
• investors may be concerned about the ability of the environmental regulator to vary the DR conditions over time. (The permitting regime includes the power for the regulator to propose permit variations by notice to the permit holder and most permits are periodically reviewed); and
• the inclusion of DR in environmental permits may interfere with the requirement on permit holders to apply best available techniques (BAT) in a way which could create confusion and additional burdens.

The Environment Agency (EA) and Natural Resources Wales (NRW) would be responsible for the implementation of this in England and Wales respectively.

This would mean that the DR could be applied to all power plants requiring a new environmental permit to be issued, which currently includes almost all new build combustion plants. On this basis, BEIS is considering whether to introduce exemptions and/or transitional arrangements whilst they bring this into force. Exemptions for plants with low load factors (less than 50 hours per year) or very low total emissions are being considered, among others. Power-plants that are built to be low-carbon, for example those fitted with carbon capture and storage (CCS) on their total capacity should be exempt.

The intention is for these requirements to be in place by 2023.  BEIS has made it clear, however, that the requirements would not apply to  plants that secured an agreement in a Capacity Market auction held prior to the date of implementation.

Hydrogen Readiness

BEIS may introduce the option to comply with DR through conversion to hydrogen in addition to the retrofitting of CCS technologies. In this case, new assessments for hydrogen conversion readiness would need to be developed.

BEIS proposes to update the 2009 CCR requirements to include conversion to hydrogen-firing. Developers would be able to demonstrate 'Hydrogen Readiness' through four assessments:

• that sufficient space is available on or near the site to accommodate any equipment necessary to facilitate hydrogen conversion;
• the technical feasibility of conversion to 100% hydrogen-firing;
• that the site’s location enables the transport of hydrogen to the site and/or that hydrogen can be produced and potentially stored at the site (although this requirement may be made non-compulsory in the short term); and
• that it is likely to be economically feasible, within the power station’s lifetime, to convert to hydrogen combustion. It has been proposed that it may not be necessary to pass this test, but that it would be necessary to show that there are no technical barriers to future decarbonisation.

BEIS is also considering requiring plants that are deemed 'hydrogen ready' to be technically capable of burning a blend of hydrogen fuel from the first date of operation, with the proportion of hydrogen required being dependent on the date of construction.

Contacts