Graphic: going underground

A new generation of coal-fired power stations is to be built to plug Britain's energy gap, but ministers have insisted that they must be capable of stripping out and burying all carbon emissions by 2025.

The move aims to place Britain at the forefront of an international drive to master carbon capture and storage (CCS), an unproven technology that advocates say is critical to global efforts to tackle climate change.

But sceptics warned that Britain was taking a huge and potentially costly gamble with an immature technology that could force tens of thousands of British families into fuel poverty by driving up their bills.

The technology is expected to add at least £700 million to the cost of building each new coal power station. The costs will be borne by consumers through a levy on energy bills of 2 per cent by 2020, an average of almost £30 per household per year.

Ed Miliband, the Energy and Climate Change Secretary, said that the first of up to four coal-fired power stations - probably at Kingsnorth, Kent - could be working by 2015.

“There is no alternative to CCS if we are serious about fighting climate change and retaining a diverse mix of energy sources for our economy,” Mr Miliband said. “With a solution to the problem of coal, we greatly increase our chances of stopping dangerous climate change. Without it we will not succeed.”

The new stations would also bolster the security of Britain's future energy supplies and could reinvigorate the North Sea as a hub for stored carbon emitted from plants across Britain and Europe, he said.

CCS, in which the carbon emitted from burning fossil fuels is stripped out using chemical scrubbers and piped for storage in old gasfields beneath the seabed, remains an untested technology on a commercial scale.

The largest pilot project in the world is attached to a 30MW power plant but under the terms of the scheme announced yesterday, companies will be granted permission to build new coal plants if they apply CCS to 400MW of power generation, or a quarter to half of a typical plant.

In a reversal of policy, Mr Miliband said that power companies must be able to capture and bury all the CO2 emissions from the new coal plants by 2025 at the latest, if the Environment Agency rules that CCS works.

Last night there were still a range of unanswered questions about how the scheme would work. A Department for Energy and Climate Change spokesman said that it was unclear whether power companies would be allowed to generate electricity from the untreated section of a new coal-fired power plant before its CCS demonstration project is shown to work.

He also said that it was unclear whether plants would be permitted to continue operating in the event that the CCS technology proved unviable.

Further details were being worked out and an announcement would be made in the summer, he said.

Greg Clark, the Tory energy spokesman, welcomed what he called the Government's “Damascene conversion” on CCS, which he claimed reflected his party's policy. But he said that gaps remained in how the Government would proceed, including a refusal to make a commitment to a legal limit on the level of CO2 pollution that a power plant could emit, he said.

Nevertheless, the announcement was welcomed by green groups. “At last Ed Miliband is demonstrating welcome signs of climate leadership,” said John Sauven, of Greenpeace. “He is the first minister in 12 years to throw down the gauntlet to the energy companies and demand they start taking climate change seriously.”

Matthew Lockwood, senior research Fellow at the Institute for Public Policy Research, said that the ban on new coal-fired power stations without CCS was the most important UK climate policy so far.

Coal-fired power stations currently generate 38 per cent of Britain's electricity but this is due to fall sharply, with a third of the plants due to be retired from service by 2016.

The retirement of the old plants has opened up a yawning gap in Britain's energy supply which at the moment is being filled by imported gas.

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