Don Valley first in line for CCS funding
16 Jul 2012
Brussels – The EC has placed the 650MW Don Valley project at Stainforth in South Yorkshire at the top of a list of European CCS projects competing for a share of an estimated Euro1.3-1.5billion fund.
The NER300 funding programme is one of the world´s largest funding programmes for innovative low carbon energy commercial demonstration projects and a key component of the EU´s strategy to tackle climate change.
2Co Energy Ltd’s Don Valley CCS project has already won Euro180m in European funding making it one of the most advanced CCS projects in Europe. Recently, Samsung C&T and BOC each agreed to take an equity stake in the project.
It will be several months before any real winners can be confirmed but these EU rankings show that the UK is without doubt the best place in Europe to commercialise CCS, according to Lewis Gillies, chief executive, 2Co Energy.
For our Don Valley Project to lead this CCS funding list is a major testament to the world-class team we have assembled and underpins the financial and technical integrity of our cost-competitive business model which we hope will become a blueprint for how CCS is deployed the world over,” said Gilles.
“The turnout and quality of the candidates for award decisions is very promising, while available funds are limited,” he added
The 650MW Don Valley Power Project is designed to link a ‘cluster’ of additional CCS projects in the Yorkshire-Humber Gateway region which has long been the heartland of the UK’s coal-fired power generation and contributes around 18% – 90mt CO2/yr – of the UK’s annual CO2 emissions.
2Co Energy claims its coal-fired power plant will capture at least 90% of its carbon emissions as carbon dioxide from
the outset.
2Co Energy acquired the Don Valley Power Project In May 2011. The design of the plant includes CO2 capture from a coal gasification plant and uses hydrogen-rich gas for power generation from which the principal emission is water vapour.
The power plant project expects to employ more than 3,000 people at the peak of construction with about 300 when in operation. The offshore part of the project expects to create around 800 construction jobs and 300 once in
operation.
The power plant received its planning permission in February 2009 and the company is working towards a final investment decision in by the end of 2013. Total investment in the integrated CCS project is expected to be almost £5 billion.
National Grid Carbon is working on the routing and permitting of both the onshore and offshore parts of a pipeline that would take the CO2 to the target storage location.
2Co Energy says it plans put the captured CO2 to profitable commercial use in the North Sea to recover billions of barrels of “hard to reach” oil before safely and permanently storing the gas offshore in depleted oil fields.
About the NER300 programme
Under the NER300 funding programme, three carbon capture and storage (CCS) demonstration projects and up to 16 renewable energy (RES) demonstration projects could be co-funded.
The amount of funding is still subject to uncertainty and will be known in October 2012. It is estimated that some €1.3 to 1.5 billion could be available. Projects in more than half of the Member States are likely to be supported,
NER300 will provide 50% of relevant costs5. No project will receive funds corresponding to more than 15% of the available allowances over the two rounds of calls for proposals. In case the funds should amount to €1.3 billion the 15% cap would amount to €292 million, with €1.5 billion the corresponding cap would be €337 million.
The Commission aims to adopt award decisions to Member States for successful projects by end 2012.
Funding will be disbursed based on performance, i.e., the amount of CO2 stored for CCS projects, and the amount of renewable energy produced for RES projects, and provided certain knowledge sharing requirements are met6.
Upfront funding may be made available depending on available revenues to accelerate final investment decisions and entry into operation of projects to the extent possible.
