Notice

Power BECCS Project: Clarification questions with responses (updated 12 October 2022)

Updated 12 October 2022

001: Will funding for the power BECCS projects come from the same funding pot as the other power CCUS projects that have been shortlisted for Phase-2 of the Cluster Sequencing Process?

Response: As set out in the Net Zero Strategy the government has an ambition to deploy 5MTCO2/year of engineered greenhouse gas removals by 2050. Government also will seek to bring forward at least one power CCUS plant in the mid-2020s through the Cluster Sequencing Process. The realisation of these will be subject to the outcome of project assessment and selection processes that will include value for money and affordability considerations of projects.

002: Will the power BECCS project submissions have the same negotiation timeline as Phase-2 shortlisted projects?

Response: After the assessment of project submissions, shortlisted projects will be invited to participate in a due diligence stage from 15 December 2022, and negotiations on a timeline which is yet to be confirmed. Following evaluation of projects and close of negotiations and due diligence processes, government intends to announce the list of Projects it intends to provide financial support. The timelines for these announcements will be made in due course. Timelines are indicative, and government reserves the right to alter these timelines at any stage in the process.

003: In the Project Submission Form under the heading ‘Important information regarding this process’ the sections described in bullet point 8 do not correspond to the sections in the document. Could BEIS clarify which sections contribute to eligibility criteria and which are for wider project context only?

Response: The list of sections set out in the section ‘important information regarding this process’ contained an error and should have read:

This document is divided into the following sections:

• Section 1: Applicant Information
• Section 2: Power BECCS Project Summary
• Section 3: Eligibility
• Section 4: Project Overview
• Section 5: Deliverability

Section 2 and Section 4 are not applied to specific criteria or being directly assessed. This information is requested to provide BEIS with an overview of the project and an understanding of the wider project context, if relevant.

We have uploaded a new version of the project submission form to correct these mistakes and are sorry for the inconvenience.

Section 2 - Power BECCS Project Summary and Section 4 - Project Overview are not being directly assessed. This information is requested to provide BEIS with an overview of the project and an understanding of the wider project context. Information provided in Section 3 – Eligibility, and Section 5 – Deliverability, will be directly considered as part of project assessment.

004: The Project Guidance document states that ‘Projects should have a provisional agreement, or evidence of progress towards an agreement, with their preferred Track-1 or reserve cluster CO₂ store and CO₂ transportation provider, and clear integration plans’. Please confirm what BEIS means by a “provisional agreement” or “evidence of progress” in this context?

Response: A letter of support, as suggested on page 21, or a Memorandum of Understanding with a T&Sco would be considered relevant. BEIS does not specify a minimum level of information within the letter, please provide what you deem suitable. When considering submissions, BEIS will only consider information provided as part of the submission, not publicly available information. If you would like BEIS to consider this type of information, it must be included as part of the submission.

005: Please confirm that there is no page limit for genuine supporting information.

Response: The word limits refer to individual responses within the Project Submission Form. The form has been designed to allow projects to cross-refer to their supporting information wherever possible, rather than reproducing this information in the form. Content within referenced materials will not count towards the word limit; however, if BEIS considers that a project has used referenced materials to continue an answer this content will not count towards the assessment.

006: The eligibility criteria stipulate that projects must have a minimum abated power generation capacity of 100MWe. Why has this criterion been set and how does this support government’s deployment ambitions in this area?

Response: As Section 3.6: Eligibility Criteria of the Project Submission Guidance Document sets out, projects must have a minimum abated power generation capacity of 100MWe to be eligible for the power BECCS Project Submission process. This criterion is consistent with the eligibility criteria for power CCUS projects entering Track-1 of the Cluster Sequencing process, and has been set out to ensure the process meets the objectives for the power BECCS programme outlined in Section 2.4, where we set out Power BECCS can deliver on two strategic commitments for government: providing large-scale negative emissions to contribute towards engineered removal targets and generating low carbon power, which contributes to security of supply.

BEIS is looking for substantial contributions to this ambition and a power generation capacity of 100MWe was deemed necessary to ensure that policy objectives would be met.

Projects which fail to provide sufficient evidence in respect of their satisfaction of the eligibility criteria will not progress further into the evaluation process.

007: The eligibility criteria stipulate that the project must be able to be operational no later than December 2027. Is there any flexibility on this deadline to account for Power BECCS being a FOAK technology?

Response: An eligibility requirement has been set for projects to show that they are able to be operational no later than December 2027 to ensure projects can align with Track-1 timescales. The Ten point plan for a green industrial revolution sets out an ambition to deploy CCUS at scale in 2 of the UK’s industrial clusters by the mid-2020s, and a further 2 by 2030. This eligibility criterion has been applied to each of the emitter types applying for Track-1 support.

Projects which fail to provide sufficient evidence in respect of their satisfaction of the eligibility criteria will not progress further into the evaluation process. As stated in the guidance, we reserve the right to adjust the delivery and milestone dates in the eligibility criteria if a significant number of Projects are delayed such that we are unable to deliver CCUS programme strategic objectives.

008: The eligibility criteria stipulate that the project must not be receiving a government subsidy for power generation upon the target deployment date. Please may you explain the rationale behind this criterion.

Response: As set out in the Project Submission Guidance Document, Power BECCS plants must not be receiving government subsidy for power generation upon target deployment date. Any government support for Power BECCS projects will be subject to subsidy control requirements, as well as an assessment of value for money for the consumer and taxpayer.

This eligibility criterion is in place to recognise that if a Generator was already in receipt of a subsidy for electricity generation, the addition of a power BECCS subsidy, which we expect to cover both electricity generation and carbon capture elements, would result in over-subsidising the costs of electricity generation as the costs would be covered by more than one subsidy scheme.

009: When will power BECCS projects currently considered non-eligible be offered an opportunity to participate in the Cluster Sequencing Process?

Response: As stated in the Project Submission Guidance Document, the eligibility criteria outlined are for First of a Kind (FOAK) power BECCS projects. FOAK refers to the first generation of this technology being deployed within GB and so the eligibility criteria have been drafted to enable the type of deployment that best meets government objectives for initial deployment within GB. These eligibility criteria may be subject to change for subsequent rounds of support for deployment within GB.

010: If a project applies for the Power BECCS business model and is rejected then will this restrict it from participating in Cluster Sequencing under other business models?

Response: A project that is not successful in their submission for this round of support will not be excluded from future rounds of power BECCS support, nor will they be excluded from applying for other business models as part of the Cluster Sequencing Process on this basis alone.

011: Will there be any change to eligibility criteria for this round of support?

Response: The eligibility criteria set out within the power BECCS Project Submission guidance document have been carefully developed by BEIS in line with the programme objectives and they are not expected to change for the power BECCS Project Submission process which closes for applications on 19 October 2022. BEIS however reserves the right to cancel, amend or vary this process at any point and for any reason with no liability on their part.

012: Could you pass on what the weighting is for each of the questions or sections in the Annex 1 application form?

Response: Section 3 of the Project Submission Form is on Eligibility. This section is a pass/fail exercise and is not scored. Projects must demonstrate that they meet all eligibility criteria before BEIS will undertake deliverability assessment. During the evaluation process we will perform additional checks on the credibility of the evidence provided and the robustness of any calculations involved, and Projects which fail to provide sufficient evidence in respect of their satisfaction of the eligibility criteria will not progress further into the evaluation process.

Section 5 of the Project Submission Form is the deliverability assessment and all questions within this section will contribute towards a project’s deliverability score, questions are not individually weighted.

Section 2 and Section 4 are not applied to specific criteria or being directly assessed. This information is requested to provide BEIS with an overview of the project and an understanding of the wider project context, if relevant.

013: Please can BEIS confirm the method for uploading supporting documentation?

The project representative will shortly be provided with a link to a folder to provide supporting information.

014: Question 2.1, please can BEIS confirm whether the word count includes the schematic/diagram requested?

There is a word count for each section of the application. Charts and graphs, including any labelling, will not be included in the word count, however, where a figure contains a significant amount of text BEIS reserves the right to extract their content and update the word count accordingly and/ or disregard them. Any words that exceed the word count will be removed before the answer is given to assessors and will not count towards the overall score.

We would encourage Applicants to be aware of the word limits attached to each question in the Project Submission form. Any information provided above the word limits will be removed before information is provided to assessors and will not count towards the score.

015: Section 2.2 metric table requests data to 2050, however the Power BECCS Business Model consultation suggests a contract duration of 10-15 years. What assumptions should be used to determine generation dispatch and CO2 capture in the period after expiration of the Power BECCS contract and 2050?

BEIS will not be providing assumptions to applicants as part of the submission process. Projects should provide data within this table based on their own assumptions for their most likely running profile, including their preferred duration of power BECCS business model (between 10 and 15 years) and beyond. Please clearly set out the assumptions used alongside the response.

016: Section 2.2 metric table requests a Levelised Cost of Removal (LCOR) to end of 2050 in £/MtCO2. What assumption should be used for wholesale power revenue over the period in order to determine LCOR?

BEIS will not be providing assumptions to applicants as part of the submission process. Projects are expected to source or develop and provide their own assumptions for assessment. Please state any assumptions used.

017: Question 4.1.2 in the Power BECCS Submission Form asks the operator to please describe the status of any commercial agreements between parties within the delivery structure alongside plans to progress future agreements, including key milestones and any dependencies. Please could you clarify the scope of this question, namely whether the ‘delivery structure’ is intended to refer to a situation where multiple corporate entities are in an intended consortium to deliver a project or else also capture simple contractual arrangements that an operator may have with its project counterparties such as EPC contractors or technology providers?

BEIS requests that projects set out both:

• the corporate sponsors and, where applicable, any intended joint venture arrangements or proposed Project Co and shareholder structure and how this will be progressed
• the key commercial agreements to be progressed with counterparties (and, if applicable, any relationship between those counterparties and the joint venture partners or shareholders in the project)

Projects may wish to provide further detail in other relevant sections in the document, such as in section 5.3 for contracting strategy, section 5.5 for the relevant operation and maintenance arrangements and in section 5.9 for the financing plan and intended financing agreements.

For reference, delivery structure is the corporate and/or contractual structure established or intended to be established to facilitate the development or construction or operation of the project. Counterparty means either the intended counterparty to the project company under a key commercial agreement for the development or construction or operation of the project or, as applicable, a generic counterparty (such as the EPC contractor) where the specific party to the agreement is not yet identified.

018: Question 4.1.2 in the Power BECCS Submission Form asks the operator to describe the commercial arrangements with the T&S provider in relation to the [Project’s] organisational structure. Given the wider question relates purely to the organisational structure of the Project, can it be inferred that this information only applies if the T&S provider has a direct involvement in project decision making and governance. Alternatively, is it asking for details of any commercial arrangements with the T&S provider of any type (noting this may be covered later in question 4)?

Question 4.1.2 requests information on the organisational structure of the project including any commercial arrangements or agreements to date with T&SCo. Projects may include information relating on how they are developing commercial arrangements with T&SCo, including any engagement to date.

019: Will BEIS be setting up an expert group for Power BECCS as it intends to for GGR’s?

BEIS are considering how best to continue engaging with industry following our consultation which closed on 7 October.

020: Has BEIS considered that existing subsidised biomass power plants developing BECCS will be able to bid competitive strike prices for the CFDe element available under the Power BECCS business model? Alternatively, have BEIS considered letting subsidised generators trade in their existing power subsidy to participate under Power BECCS?

Please see our published response to CQ 008 (on this page), which sets out why the eligibility criterion is in place. Government subsidies must comply with subsidy control rules and require consideration on a case-by-case basis where necessary.

021: Section 5.1 requests an integrated project schedule. To enable this to be prepared could you please advise what dates should be assumed for (a) Bioenergy Strategy decision publication date, and (b) indicative timeline for negotiation and allocation of Power BECCS contract.

The government is actively progressing work on the biomass strategy, including work on the assessment of the priority use of biomass across the economy, which will be detailed in the forthcoming strategy. The government plans to publish the Biomass Strategy in due course. Projects should indicate in their project schedule a timeline which enables their own Track-1 deployment by the end of 2027.