Developers behind plans for a pioneering green energy scheme at Peterhead power station have abandoned their bid for a slice of a £1.2billion EU prize fund.
The move now puts extra pressure on the UK Government to give backing to the long-awaited Carbon Capture and Storage (CSS) plan, which is expected to bring nearly 1,000 jobs to the Buchan corner.
Power giants Shell and SSE had originally hoped to score Brussels cash for their world-beating renewables project, which was revealed two years ago.
The aim is to use new technology to tackle climate change by capturing 10million tonnes of CO2 from the power plant over a decade – 90% of its total emissions – before storing it in a depleted North Sea gas reservoir. The £100million scheme had been placed on a reserve list for the European Commission’s NER300 contest.
But last night, Shell confirmed that it had ruled against applying for a share of the fund.
It follows widespread speculation that EU energy chiefs would be unwilling to support any British projects after delays by the UK’s department of energy and climate change. Also, judges were unlikely to favour schemes at gas-fired plants like Peterhead.
Now the project’s future hinges solely on a successful bid to the coalition government’s own £1billion contest. As announced in this year’s budget, the Peterhead plan is in the running for UK cash, alongside a similar scheme earmarked for Yorkshire. A final decision is likely to be made in 2015.
A Shell spokeswoman said last night: “We can confirm that the project will not seek NER300 funding.
“We will continue to work on the Peterhead Project as part of the UK Government’s CCS commercialisation programme. This remains the priority.”
A spokesman for the London-based CCS Association said Shell’s decision was unlikely to hinder progress on the Peterhead scheme.
A similar project proposed for Peterhead power station fell flat in 2007 when backers, concerned at government indecision, pulled out.
The European Commission confirmed it has received 33 applications for a share of the NER300 fund – but only one for a carbon capture scheme, understood to be for Drax power station in the north of England.