RWE buys place on UK carbon capture shortlist

London - RWE npower has bought its way into the UK competition to demonstrate the feasibility of carbon capture and storage (CCS) technology by buying a majority holding in Peel Energy, which was already one of three companies declared on the competition shortlist last year. The shortlist also includes proposals from E.ON for a plant at Kingsnorth, Kent, and ScottishPower, which aims to develop a plant at Longannet, Fife.

RWE npower has taken a 75% stake in Peel Energy CCS Ltd, which was formerly jointly owned by Peel Energy and Danish company DONG Energy. The restructured joint venture, with RWE npower's involvement, aims to establish a CCS facility of up to 400MW as part of a new cleaner supercritical coal-fired power station. The CO2 is to be transported for storage in disused gas fields in the North Sea in the project, which could be up and running by 2014.

Independently, RWE npower has already commissioned a separate test facility at its Didcot coal-fired power station in Oxfordshire, capturing CO2 using both PCC and Oxyfuel carbon capture methods. The company is also due to begin construction of a CCS pilot plant at its Aberthaw coal-fired station in Wales next year. Due for completion in 2010, this would be the first to capture CO2 direct from a commercially operating power station in the UK.

DONG Energy claims that its CCS pilot plant at Esbjerg Power Station in Denmark, part of the CASTOR R&D project, is Europe's largest CO2 capture facility to date and has been capturing the gas since 2005. Meanwhile, Peel brings a heritage in engineering and experience in delivering major infrastructure projects to the partnership.

"Energy companies cannot commit to commercial investment in CCS on a new power station until the technology is proven and seen to be economically feasible," said RWE npower CEO Andrew Duff. "This could be a major barrier to the construction of much needed new build power plant and so this project is vital to unblocking the potential for coal to play its part in the UK¹s long term energy mix."