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Redpoint powers ahead with CCS analysis for DECC

London, 25th January 2010 – Redpoint Energy, one of Europe’s leading energy consultancies, has reinforced its position at the forefront of cutting-edge analysis on the European energy markets by advising the Department for Energy and Climate Change (DECC) on its response to the clean coal consultation, with a specific focus on the future of carbon capture and storage (CCS).

Redpoint advises the UK government, the EC and major companies on areas including investment strategies, energy transactions, utility strategy and energy policy and regulation. The consultancy explored the options for CCS outlined in DECC’s consultation document with regard to financial incentive schemes, retrofit requirements and contingency plans. Redpoint’s analysis also covered of modelling generation plant economics, which is one of its specialist areas, including the impact of market and policy risks, and an in-depth assessment of the impact on the wider electricity market of up to four demonstration plants.

As the UK works towards its target of reducing domestic carbon dioxide emissions by 80 per cent from 1990 levels, the electricity sector will need to be almost fully decarbonised by 2050. By 2030, more than 70 per cent of generation will need to come from low-carbon technologies, and the government is keen to explore the potential contribution of CCS towards these targets.

Oliver Rix, a Redpoint Director, says: “CCS is currently unproven at a commercial scale for power generation.  It is also expensive due to high equipment costs and the huge uncertainty for investors over future carbon prices. But our analysis indicates that short-term financial support to accelerate deployment and future-proof the system against high carbon (and possibly gas) prices could give CCS the potential to make a positive impact on decarbonisation targets.”

Rix also points out: “A key environmental concern has been that bringing on new clean coal capacity which is only partially fitted with CCS could have a negative short term impact on carbon emissions.  However, our modelling suggests that – perhaps surprisingly – emissions would not necessarily increase. This is because it tends to displace some less efficient – and higher emitting – existing coal plant, along with some gas-fired generation. But this would then pave the way for deeper reductions in the future if CCS technology can demonstrate its effectiveness as it evolves and plant could be fully fitted. “

Philip Grant, Redpoint Director, adds: “As a trusted advisor on energy policy, we are delighted to be building on our solid track record of advising DECC with this latest project to explore the market and regulatory arrangements for developing large scale CCS projects in this country.”

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