2Co Energy says that it cannot proceed with a plan to build a £5 billion power plant equipped with carbon capture and storage (CCS) technology after it failed to reach the shortlist for a UK government funding scheme.
The 650 MW(net) Don Valley project in South Yorkshire won funding from the European Union’s economic recovery scheme in 2009 and earlier this year was placed at the top of a shortlist of CCS projects from around Europe to win funding from the European Commission’s NER300 scheme.
It was one of eight projects considered by the UK government in a £1 billion funding competition aimed at supporting the commercialisation of CCS technology.
2Co Energy says that the UK government’s decision to not support Don Valley “is truly disappointing”. The project aimed to capture 5 million tonnes of CO2 per year while providing energy to over 1 million homes from the end of 2016.
“We are trying to come to terms with how the UK’s most advanced project that has twice been selected by the EU for funding and is currently sitting as Europe’s top ranked project has not even made it to the UK’s shortlist,” said Lewis Gillies, CEO of 2Co Energy.
The project’s failure to win funding from the UK government effectively rules it out of the race for NER300 funding competition, which aims to provide financial support for up to eight commercial-scale CCS demonstration projects and up to 22 renewable energy projects from around the EU.
Projects considered for funding under the NER300 programme require co-funding commitments from their home governments.
The UK government announced at the end of October a shortlist of four projects in its CCS funding competition. It said that the projects chosen had “all shown that they have the potential to kick-start the creation of a new CCS industry in the UK”.
It will now invite the shortlist of four to take part in a period of intensive commercial negotiations before decisions on which projects to support further are taken in the new year.
Three of the four shortlisted projects also applied for NER300 funding. The UK government says it has written to the European Commission to inform it that it is willing to support these projects in the NER300 contest, subject to their success in the UK competition.
The four shortlisted bids in the UK funding contest are:
• Captain Clean Energy, a proposal for a new 570 MW coal fired integrated gasification combined cycle (IGCC) project with CCS in Grangemouth, Scotland, led by Summit Power and involving Petrofac, National Grid and Siemens.
• Peterhead, a 340 MW post-combustion CCS capture project retrofitted to part of an 1180 MW combined cycle gas turbine power plant at Peterhead in Scotland, led by Shell and SSE.
• Teesside Low Carbon, a pre-combustion coal gasification project on Teesside, north east England, led by Progressive Energy and involving GDF SUEZ, Premier Oil, and BOC.
• White Rose Project: An oxyfuel capture project at a proposed new 304 MW fully abated supercritical coal-fired power station on the Drax site in North Yorkshire. Led by Alstom and involving Drax, BOC and National Grid.
The Don Valley project proposed to pipe captured CO2 to depleted offshore oilfields in the North Sea and use it for enhanced oil recovery before permanent storage.
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