Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Acknowledged
Department aims to shift financial risk from government to self-sustaining CCUS market by 2035
Conclusion
Looking to the future, the Department told us it wants to move the balance of risk away from the government as the market for CCUS evolves.33 The Department’s current assessment is that, because projects are first–of–a– kind, there is an inherent risk [of failure] which the market will not take on and therefore its support is appropriate.34 The Department wants to move away from projects financially backed by the government.35 It wants to establish what it describes as a self–sustaining “…commercial and competitive market…” for CCUS from 2035.36 24 C&AG’s Report, para 18 25 Qq 15–16 26 Q 27 27 Q 56 28 C&AG’s Report, para 2.2 and Figure 6 29 C&AG’s Report, para 2.2 and Figure 6 30 Q 12 31 Q 12 32 Q 27 33 Q 74 34 C&AG’s Report, para 3.17 35 C&AG’s Report, para 3.17 36 Q 74; C&AG’s Report, para 3.17 12
Government Response Summary
The Department for Energy Security and Net Zero has created business models that provide the minimum subsidy required to support the projects, keeps the allocation of costs and risks under review with the aim of reducing subsidy over the long-term.
Government Response
Acknowledged
HM Government
Acknowledged
1.2 The Department for Energy Security and Net Zero (the department) has created business models that provide the minimum subsidy required to support the projects, in order to realise the anticipated benefits and positive value for money. The department keeps the allocation of costs and risks between government and projects under review, with the aim of reducing subsidy over the long-term.