UK power industry shows CSS ambition

• 13 years ago (2011-02-19)
• Junior Isles

Asia 892 Europe 1089 Renewables 776

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A total of 14 UK projects have applied for European Union funding of around €4.5 billion for carbon capture and storage and innovative renewable energy projects across the region, the UK government has said.

Scottish and Southern Energy  with Royal Dutch Shell  and Petrofac , Alstom Power with Drax plc ,and National Grid and Peel Energy have all announced details of their applications for the funding.

UK Energy Minister Charles Hendry did not give details on the remaining applicants for the EU funding, but said that nine of the 14 projects were for CCS and five for renewables.

Three of the CCS applications are based in Scotland and six in England, with four in the Humber and two in the Teesside regions. Seven of the CCS projects are for coal-fired power stations and two are to capture emissions from gas power plants.

"The strong level of interest received for CCS projects in particular is heartening - – it shows that UK industry is keen to move forward in the development of CCS and confirms the lead that the UK is taking in this critical technology," Hendry told executives at the Platts CCS conference in London.

The applications for innovative renewables include tidal stream and wave power projects in Scotland and an offshore wind project based in northeast England.

The government has until May 9 this year to assess the applications against the EU's New Entrants Reserve (NER) scheme and UK criteria and decide which to put forward to the European Investment Bank for further consideration.

The NER will sell 300 million allowances that have been set aside from the EU Emissions Trading System to provide the funding. At current carbon prices of around €15 per metric tonne, the allowances would raise around €4.5 billion.

Separately, the UK government is providing up to £1 billion to fund the first commercial-scale CCS project and has committed to support another three projects through a levy on energy bills.

The government plans to call for proposals for the next three CCS projects after the budget on March 23rd and to select projects by the end of 2012.

Hendry said the government hoped to award the contract for the first project in the second half of the year to Iberdrola SA's UK subsidiary ScottishPower for the Longannet project in Scotland subject to quality and value for money.

ScottishPower was the only company remaining in the competition for UK government funding after Germany's E.On pulled out in October last year.

The UK wants to become a global leader in CCS technology with a view to exporting it to countries such as India and China that are rapidly expanding their fossil fuel-fired power generating capacity to support booming economies,

But China is already making great strides in developing CCS technology for its own power stations and for export.

The UK is also hoping that CCS will play a role in helping to meet stringent EU and domestic targets on cutting greenhouse gas emissions by 2020 and beyond as the electricity sector would need to be mostly de-carbonised by 2050.

Hendry said the government has decided to postpone publishing its CCS roadmap until the autumn rather than the spring so as to incorporate lessons learned from the electricity market reform and completing the front-end engineering and design studies for the first demonstration project.