Peterhead station poised to land share of £1bn carbon capture fund

Peterhead Power Station
Peterhead Power Station

The north-east of Scotland is set to move a major step towards becoming a global leader in a groundbreaking green energy technology within weeks.

The UK Government is poised to commit tens of millions of pounds to advanced design work for a carbon capture and storage (CCS) plant at Peterhead’s gas-fired power station.

The Press and Journal understands ministers will announce their decision to advance the Shell-led scheme in January or February.

It would be the world’s first commercial-scale gas CCS demonstration project and create up to 1,000 jobs during the construction phase.

About 10million tonnes of harmful carbon dioxide emissions would be captured at the Aberdeenshire power station, piped 60 miles offshore to the depleted Goldeneye gas reservoir and stored 1.5 miles under the floor of the North Sea.

Once proven, it is hoped CCS will clean up the country’s power sector and become a key weapon in the battle against climate change, with the technology exported across the world.

The UK Government announced in March that the Peterhead project and a coal-based scheme at the Drax power station, near Selby in North Yorkshire, had beaten off competition to become the two preferred bidders for £1billion of CCS development funding.

Energy Secretary Ed Davey revealed yesterday that the project at Drax – the UK’s biggest carbon emitter – would move to the next phase, with detailed engineering, planning and financial proposals to be prepared before the final investment decisions are made.

Sources within the government and the industry confirmed to the P&J last night that the Peterhead scheme would follow suit quickly. “I can pretty much guarantee that Peterhead will be announced in the new year,” one said.

The two CCS schemes will be handed a multimillion-pound contract for the design work in the first allocation from the £1billion fund. Distribution of the rest of the cash is scheduled to be revealed in early 2015.

“The progress the Department of Energy and Climate Change (DECC) has now achieved renews momentum on CCS and inspires increased confidence that these two projects will be delivered,” said Stuart Haszeldine, professor of CCS at Edinburgh University.

“This is a big step that will help the UK and Europe to match the rapid progress being made on CCS deployment in the USA, Canada and China.”

DECC itself said talks over the Peterhead scheme were “progressing positively and we hope to make a further announcement on their outcome shortly”.