The UK Government spent £100 million on a now cancelled carbon capture storage (CCS) competition, according to the National Audit Office (NAO).

In a new report, the NAO states the Government has "not achieved value for money" after axing the initiative in 2015.

Peterhead power station in Aberdeenshire and the White Rose scheme in North Yorkshire were both in the running for the £1 billion contract to develop the scheme, which would have captured CO2 from various sources and stored it underground.

A previous CCS competition saw the Government spend £68m before it was cancelled in 2011.

The NAO found the Department for Business, Energy & Industrial Strategy began the second competition without agreeing with the Treasury on the amount of financial support available over the lifetime of the projects, ultimately leading to the £1bn funding being withdrawn due to concerns over future costs to consumers.

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However, the NAO found the potential for CCS still exists, and said the Department should "maximise the potential value from the competition" by incorporating into its new CCS strategy the lessons it and the key stakeholders have learned.

Amyas Morse, head of the NAO, said: "The Department has now tried twice to kick start CCS in the UK, but there are still no examples of the technology working. There are undoubtedly challenges in getting CCS established, but the Department faced an uphill battle as a result of the way it ran the latest competition.

"Not being clear with HM Treasury about what the budget is from the start would hamper any project, and caused particular problems in this case where the upfront costs are likely to be high. The Department 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."

(LM)