Energy minister announces plans to make Britain ‘world leader’ in clean technology

New coal-fired power stations will have to commit to full-scale use of carbon capture and storage technology by 2025 in order to get planning permission, under new government proposals.

Speaking in the commons this afternoon, energy and climate change minister Ed Miliband outlined plans to create a cleaner coal industry and make Britain a “world leader” in CCS technology, which captures harmful gases and stores them deep underground.

Under the plans, all coal-fired power stations built from now onwards would have to use CCS for around a quarter of their capacity “from day one”. They would also have to commit to retrofitting the clean technology on the whole plant by 2025, assuming the technology is ready for full-scale commercial use by 2020. Any projects that fail to prove capacity to hit these targets would not be approved.

The news comes a day after Alistair Darling announced funding for up to three extra projects by 2020 to demonstrate the use of the technology. A competition to build the first full-scale plant has been hit by delays but the government has said bidders will now be selected to proceed to detailed design stage.

Each CCS scheme could cost more than £1bn, and would be funded by a new levy on consumers' electricity bills, which is expected to add around 2% to bills by 2020.

Miliband said new power stations could be built in clusters and named Teeside, Thames Gateway, the Firth of Forth and the Humber as likely spots. He added that CCS could sustain some 50,000 jobs by 2030.

He said: “I believe that we need to signal a move away from the building of unabated coal-fired power stations, because it is right for our country – to drive us towards low carbon as part of a progressive decarbonisation of our power supply.

“It is an essential part of a new industrial strategy and it is necessary, if we are to show international leadership on climate change.”

The government has launched a consultation on the plans and a report is expected in the summer.