A UK company planning to develop a carbon capture and storage (CCS) demonstration plant in Scotland has submitted a bid to the European Union to win funding for its project.

Peel Energy Carbon Capture and Storage Limited (PECCS) has submitted the application for funding from the EU’s NER300 funding competition to the UK’s Department of Energy and Climate Change. The fund could disburse up to €4.5 billion to eight CCS and numerous renewable energy projects around the EU.

PECCS – a subsidiary of UK energy company Peel Energy – also wants to apply for funds from the UK government’s planned second CCS demonstration competition. It will build the CCS plant at a proposed 1800 MW multi-fuel power plant being developed in north Ayrshire by Ayrshire Power Limited, another Peel subsidiary.

“With the formation of our consortium and our submission for EU funding we are now building momentum on the Hunterston project,” said Muir Miller, project director at Ayrshire Power. “Subject to the necessary approvals, we could begin work soon after a successful funding award.”

The proposed Hunterston project will use supercritical technology burning both coal and biomass fuel. The CCS portion of the project will be built by PECCS and will be designed to capture 90 per cent of carbon dioxide (CO2) emissions.

In December 2010, Ayrshire Power announced that it had formed a consortium consisting of Doosan Power Systems, Fluor Limited and Petrofac to develop the CCS plant. Earlier in 2010, it submitted a planning permission application for the Hunterson power plant project.

Ayrshire Power says that even after allowing for the energy required to operate the CCS facility, the Hunterston station is expected to be more efficient than any other coal fired power plant in the UK.

The European Commission is expected to announce the winners of the NER300 funding award in late 2012.

The NER300 funds will be sourced from the auction of 300 million emission allowances from the EU Emissions Trading Scheme (ETS) new entrants reserve.

The UK government is currently holding a competition to win funding for a CCS demonstration project, but has announced plans to fund a further three projects through a second round of funding.

The government is planning to align the timetable for the second round of funding with that of the NER300 competition, according to Ayrshire Power.