UK taps gas, coal projects for £1bn CCS competition
22 Mar 2013
London - The Peterhead project in Aberdeenshire and the White Rose project in Yorkshire, have been chosen as the two preferred bidders in the UK’s £1bn carbon capture and storage (CCS) commercialisation programme competition.
“These two are major infrastructure projects potentially worth several billion pounds and could support thousands of construction jobs over the next few years,” announced Edward Davey, secretary of state for energy and climate change.
Captain Clean Energy and Teesside Low Carbon, the remaining two bidders with whom the Government has been in discussion, will be appointed as reserve projects. These bids may be called into play if either of the preferred bidders fails to enter into a FEED contract by the summer.
“We had four excellent bids … We will now be working swiftly to progress our preferred two, while making sure we continue to provide the best possible value to tax payers,” commented Davey.
The selected projects are just the start, according to UK energy minister John Hayes, who believes there is significant appetite from industry to invest in CCS in the UK.
“It is my intention to work with industry, beyond these two projects, to ensure we have further CCS projects by the end of the decade - supported by the innovative changes we are making to the energy market to encourage investment in low carbon electricity.”
The Peterhead project in Scotland involves capturing around 90% of the carbon dioxide from part of the existing gas-fired power station at Peterhead before transporting it and storing it in a depleted gas field beneath the North Sea. The project involves Shell and SSE.
The White Rose project involves capturing 90% of the carbon dioxide from a new super-efficient coal-fired power station at the Drax site in North Yorkshire, before transporting and storing it in a saline aquifer beneath the southern North Sea. The project involves Alstom, Drax Power, BOC and National Grid.
The two preferred bidders were selected following a period of intensive commercial negotiations with four projects shortlisted from an original eight in October last year.
The Government will now undertake discussions with the two preferred bidders to agree terms by the summer for FEED studies, which will last approximately 18 months. A final investment decision will be taken by the Government in early 2015 on the construction of up to two projects.
Among those welcoming the latest announcement, the UK Carbon Capture and Storage Research Centre, which
noted that the UK has more secure storage capacity for carbon dioxide in the rocks deep under the North Sea than the rest of the EU put together.
“This is a very valuable asset in a carbon-constrained world, which today’s UK carbon capture and storage commercialisation competition announcement by UK Department of Energy and Climate Change (DECC) will start to capitalise on,” it stated.
UKCCSRC director professor Jon Gibbins added: “With projects to seed carbon-free industry clusters across the UK, new electricity market mechanisms to support CCS and a strong R&D base, the UK is now leading the world in showing how to break the link between fossil fuel use and carbon dioxide emissions to atmosphere.”
