Effect of Government Actions on Technological Innovation for UK's Carbon Capture and Storage

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Abstract

For emerging technologies with high uncertainty, such as carbon capture and storage (CCS), various government actions can exert a critical influence on each stage of development. As a mitigation technology essential in combating climate change, CCS captures, transports and stores carbon dioxide (CO2) emissions from large point sources, such as fossil fuel power plants. Since fossil fuel-generated electricity accounts for more than 50 per cent and continues to play an important role in the UK's energy mix, the UK Government has considered CCS as a key option to reduce CO2 emissions. In order to facilitate the development of CCS, the Government has taken actions such as R&D funding, demonstration programmes, corresponding regulatory frameworks and the ongoing establishment of price-based support schemes. This research aims to assess how the Government's interventions affect the development and diffusion of CCS in the UK. For a holistic examination of the influence of government intervention in the UK's CCS development, this research adopts the Technology Innovation System (TIS) approach, introduced by Carlsson and Stankiewicz (1991) and further developed by Bergek et al. (2008), for analysing the functional dynamics of CCS innovation systems in the UK, including the functions of entrepreneurial activities, knowledge development, knowledge diffusion through networks, guidance of search, market formation, resource mobilisation and creation of legitimacy. With the analytical framework of TIS, this research conducted expert interviews and secondary literature reviews to understand CCS development over time in the UK and investigate the strong and weak functions of the UK's CCS innovation system. In addition, this research seeks to explore the interactions of the UK's CCS TIS with the EU's innovation system, Norway's innovation system and sectoral innovation systems such as power generation and steel. Through systematic assessment, this study identified the main drivers of the UK's CCS development, including the external stimuli of Norway's carbon tax policy and the EU's CCS research priority in the early stage, and the domestic government's support of R&D funding and network establishment for knowledge development and diffusion. However, the hesitation and changeable position of the Government were recognised as barriers to the development, especially regarding the capital investment for demonstration and commercialisation programmes. This study uses the findings to draw policy recommendations for further CCS development.

Keyword(s)

Carbon dioxide capture and storage; Technological innovation system

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