Seven CCS projects compete for funding

12th June 2011

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Seven potential carbon capture and storage (CCS) demonstration projects are among 12 UK applications submitted to the European Investment Bank (EIB) for consideration in the next round of the EU New Entrant Reserve (NER) scheme.

The NER scheme is a fund, worth around €4.5 billion, to support CCS and innovative renewable projects across the bloc.

The seven CCS applications are:

  • an oxyfuel new coal-fired power station on the Drax site in North Yorkshire;
  • an integrated gasification combined cycle (IGCC) power station at Killingholme, Yorkshire;
  • a post-combustion amine capture on a new coal-fired power station in Ayrshire, Scotland;
  • a new IGCC power station at Stainforth, Yorkshire;
  • a pre-combustion coal gasification project at Teesside, northeast England;
  • a post-combustion amine capture retrofitted to an existing coal-fired power station at Longannet, Scotland; and
  • a post-combustion capture retrofitted to an existing combined-cycle gas turbine power station at Peterhead, Scotland.

Research has revealed that the three proposed Scottish CCS demonstration projects could be worth £3 billion to the national economy and generate 5,000 new jobs in construction and operation.

The Scottish government has pledged that new coal-fired stations in Scotland must demonstrate CCS on at least 300MW of its capacity from day one, with 100% CCS expected on new builds from 2020.

The EIB will now undertake a due diligence exercise on the applications submitted to the NER, checking their financial and technical deliverability.

Successful CCS projects will secure funding for up to 50% of their relevant costs over a 10-year period.

Meanwhile, the UK government insists that it remains committed to continuing public sector investment in four CCS demonstration plants, and aims to launch a selection process later this year to identify the projects.

In the Budget, the chancellor said the government would now not go ahead with a levy on energy bills to fund the projects. Instead, it plans to fund CCS from general taxation, which has caused concern in the industry.


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