Carmichael highlights North Sea carbon capture potential and Ofgem remit in Energy Bill debate

10 May 2023

Orkney and Shetland MP, Alistair Carmichael, has used the debate over the Energy Bill in the House of Commons to highlight the potential benefit of Carbon capture, utilisation and storage (CCUS) to the Northern Isles, and the need for a change to Ofgem’s remit to reflect Net Zero priorities. Speaking in the debate on Tuesday Mr Carmichael noted the potential for Sullom Voe in Shetland to transition to a CCUS role, in response to the government’s interest in undersea carbon storage in the North Sea.

Introducing the debate, the Secretary of State for Energy and Net Zero, Grant Shapps MP said:

“The Bill will help us to exploit our absolutely extraordinary potential for carbon capture, usage and storage, as well as low-carbon hydrogen, potentially for industrial use. This country has a vast storage reservoir beneath the North Sea, much of it once filled with oil and gas. There could be enough capacity to store up to 78 billion tonnes of carbon. If we are able to fill the UK’s theoretical potential carbon dioxide storage capacity with CO2, the avoided costs at today’s emission trading prices could be in the region of £5 trillion. We have the potential for a geological gold mine under the sea, and the Bill helps us to access it.”

Mr Carmichael asked:

“Carbon capture, utilisation and storage (CCUS) is very important to me and to my constituency. EnQuest, the operator at the Sullom Voe terminal, sees the next generation of the use of that terminal involving CCUS, but does that not reinforce the point in relation to Ofgem’s remit? Tim Pick, the Secretary of State’s offshore wind champion, has also made the point that Ofgem’s mandate must be reshaped to bring it into the appropriate framework for net zero challenges. That remit has not been touched since 2010.”

Responding, Mr Shapps said:

“The Government have committed to those targets, as has the whole House, because the law has already been passed. We have the carbon budgets, one to six; I think we exceeded one, two, three and four, but we are on track for five, and a few weeks ago, I set out in “Powering Up Britain” how we plan to meet carbon budget six as well. The conversation about whether the regulator has an individual duty is an interesting one, but the reality is that in truth, we are all headed towards that cleaner energy system.”

Reacting after the exchange Mr Carmichael said:

“Revisiting Ofgem’s remit to reflect Net Zero priorities could be a game-changer for green growth in the isles and around the country. That is true not just for carbon capture but also in supporting development for EMEC and other renewables innovation. There is cross-party support for this update – the government needs to get on and do it.”

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