LONDON (Reuters) - Britain spent 168 million pounds on two failed initiatives to help to fund carbon capture and storage (CCS) technology, a parliamentary watchdog said on Friday.
CCS involves the capture of emissions from power plants and industry to allow them to be stored underground and had been viewed by the British government as a vital to help it to meet emissions targets, but two competitions held over the past ten years have failed to produce a commercial-scale project.
A report by the National Audit Office (NAO), focussing on the second competition, said that the 100 million pounds spent had not provided value for money.
"Taxpayers will be alarmed that disagreement between departments means the taxpayers have little to show for the 100 million pounds the government spent," Meg Hillier, Chair of the Committee of Public Accounts, said in statement with the report.
The first competition, which cost 68 million pounds, collapsed in 2011 when a consortium including National Grid (LON:NG) and Iberdrola’s Scottish Power pulled out.
The second competition's demise came when the government unexpectedly cancelled its funding in 2015.
The NAO said that the Department for Energy and Climate Change (DECC) -- which has since become part of the new Department for Business, Energy and Industrial Strategy (BEIS) -- began the second CCS competition without agreeing on costs with Britain's finance ministry.
The cancellation halted development of the two major projects involved, being developed by companies including SSE (LON:SSE), Shell (LON:RDSa), GE and BOC, part of the Linde Group.
"The government will have to work hard to restore investor confidence in carbon capture and storage, or come up with cost-effective alternatives to meet the UK's decarbonisation target," Hillier said.
In 2015 the DECC said that meeting the country's 2050 carbon dioxide reduction target would cost 30 billion pounds without deployment of CCS in the power sector.
"The Department (BEIS) must learn lessons from this experience if it is to stand any chance of ensuring the first CCS plants are built in the near future," said Amyas Morse, head of the NAO.
Britain has a legally binding target to cut emissions by 80 percent from 1990 levels by 2050.