Shell has signed an agreement with the UK government to take the Peterhead carbon capture and storage project, which envisages installation of post-combustion amine capture on SSE's Peterhead gas-fuelled combined cycle plant, to the next stage, front end engineering and design (FEED). The aim of this FEED phase is to further develop design details and "de-risk" the project ahead of a final investment decision, which could be made in late 2015.
The project is one of two remaining in the CCS commercialisation competition being operated by the UK government, to which it says "£1 billion has been committed" to support construction of "up to two projects." The other project remaining in the running is the coal-plus-biomass fuelled White Rose oxyfuel project planned for the Drax site, which is also now in the FEED stage. A total of about £100 million is being invested in the FEED studies, the government says.
With the award of the two FEED contracts, the "reserve projects" announced in March 2013, the Captain and Teesside projects, will now be "deselected."
If it goes ahead Peterhead would represent the first industrial-scale application of CCS technology at a gas-fired power station anywhere in the world. The compressed carbon dioxide would be sent via pipeline for disposal in Shell's depleted Goldeneye gas reservoir. SSE would be responsible for power plant modifications, while Shell, which owns Cansolv capture technology, would be responsible for installing the CCS equipment.
“The project has the potential to make gas, already the cleanest burning fossil fuel, even cleaner," said Ed Daniels, Chairman of Shell UK.
The government says it is "continuing discussions with CCS developers outside of the competition on what measures they may need to take their projects forward." This includes discussions with the Captain and Don Valley projects under what is known as "the FID Enabling route", an interim arrangement enabling investors to proceed with low carbon projects in advance of the UK's new "contracts for difference" funding scheme coming fully into effect.
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