Head of Research Sue Ferns said: "Not only is this good news, but it is essential if the government is to meet its carbon reduction commitments. CCS is the only viable future for coal and gas power stations, and coal still makes a significant contribution to ensuring secure electricity supplies. The government's support for a strong and robust UK supply chain is also very welcome.

"This move has been long-awaited since the collapse of the CCS demonstration programme at Longannet in Scotland last year. To ensure its success, Prospect emphasises that CCS must be integrated with electricity market reform. Market uncertainty remains a key barrier to investment across energy industries.

"The Energy Secretary should also look pragmatically at the £1bn pounds that has been set aside to demonstrate this new technology in the UK. Government is understandably keen to reduce the costs of CCS deployment, but the first priority must be to make sure it works effectively on a commercial scale and to avoid any rerun of the problems encountered over Longannet."

Ferns added that the £13m to be invested in a new CCS research centre is a useful first step, and needs to be followed up by commitment to a publicly-funded long-term research and development programme.