United Kingdom's Progress in Energy Transition: Carbon Capture, Utilization, and Storage Technologies Alter the Landscape
The UK's Carbon Capture, Utilisation, and Storage (CCUS) sector is experiencing rapid growth as part of the country's legally binding commitment to achieve net zero emissions by 2050. This expansion is expected to support up to 50,000 jobs and contribute £4-5 billion annually to the UK economy by mid-century[1][2].
The regulatory framework for CCUS is also evolving, with Ofgem being empowered under the Energy Act 2023 to regulate CO2 transport and storage networks. Two licenses for CO2 transport and storage have already been granted to Net Zero North Sea Storage Limited and Liverpool Bay CCS Limited respectively[3].
The government's Department of Energy Security and Net Zero has launched two calls for evidence. One is for the CCUS Future Network Strategy, prioritising key projects such as the Connah’s Quay Low Carbon Power project in North Wales and the Ince Bioenergy with Carbon Capture and Storage project in Cheshire[2]. The other call for evidence seeks views on various ways to encourage an independent market-led CCUS sector[1].
Regarding economic regulation for CO2 storage, an ongoing Call for Evidence launched by Ofgem and the government is assessing whether the existing Regulated Asset Base (RAB) model remains fit for purpose as the CCS market matures[1][5].
Under the Centralised Strategic Network Plan (CSNP), the National Energy System Operator (NESO) will identify future network needs, support the development of potential network reinforcement needs, evaluate and select optimal solutions, identify longer-term network projects, and produce outputs geared towards submission of a strategic network plan to Ofgem every three years[4].
The government is committed to the UK becoming world leaders on carbon capture and storage, with the expanded HyNet cluster expected to bring industrial renewal, unlock growth, and secure an additional 800 good, skilled jobs for local people[2].
References
- Government launches call for evidence on CCUS Future Network Strategy
- Expanded HyNet cluster to bring industrial renewal, unlock growth and secure jobs
- Ofgem awards CO2 transport and storage licences
- Centralised Strategic Network Plan (CSNP) for electricity, gas, and hydrogen transmission networks
- Call for Evidence: CO2 storage economic regulation
The expansion of the UK's Carbon Capture, Utilization, and Storage (CCUS) sector is expected to stimulate growth in both the industry and finance sectors, as the sector aims to contribute £4-5 billion annually to the UK economy by mid-century. The regulatory framework for CCUS, particularly in terms of economic regulation for CO2 storage, is under review, with a call for evidence assessing whether the existing Regulated Asset Base (RAB) model remains suitable as the market matures.
