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Powerfuel Seeks EU Funds on Second U.K. Carbon Capture Plant

Powerfuel Power Ltd. said it plans to start a second carbon capture project in the U.K. and that it applied for funds from the European Union’s sale of 4.5 billion euros ($6 billion) of carbon-dioxide permits.

Powerfuel Power, a unit of the coal mine operator Powerfuel Plc that went into administration in December, will enter its Hatfield Endex Combined Cycle Gas Turbine project for the European Commission funding program known as the New Entrants Reserve 300. It is developing the project, its second application to the NER300, with Calix Ltd., the company said in an e-mailed statement today.

Powerfuel’s project would fit technology known as carbon capture and storage to a 450-megawatt plant at the site near Doncaster, northern England. It would siphon off emissions from natural gas or gasified coal before it’s injected for storage underground in depleted oil and gas fields.

The technology at Hatfield’s Endex plant would draw away more than 85 percent of the emissions from the facility, according to the statement. The companies plan to have a 10- megawatt pilot plant working in 2012. Both projects could be working at a commercial scale by the end of 2015.

B9 Coal Ltd., a London-based coal company, and fuel cell technology company AFC Energy Plc, also will participate in the project. Their plan involves using the waste hydrogen left over after the carbon capture process. The gas will be used to power fuel cells that convert the fuel into electricity through chemical processes.

“The technology’s high efficiency and load-following capabilities make it a key ingredient in the recipe for commercial CCS success,” Alisa Murphy, a director at B9 Coal, said in an e-mail.

Nine Entries

Companies had to submit applications to governments for funding by Feb. 9. The U.K. Department of Energy and Climate Change received nine proposals, a spokeswoman said.

Funds will come from the sale of 300 million allowances to emit carbon dioxide under Europe’s cap-and-trade program. Revenue from the sale will be used to aid carbon-capture and renewable energy projects. The European Investment Bank will sell the permits and disburse revenue via national governments.

Powerfuel is also seeking funds for a carbon capture device at a 900-megawatt integrated gasification combined cycle power plant. Those plans, which also involve capturing emissions before combustion, are among the most advanced in Europe, according to Bloomberg New Energy Finance.

Britain’s coalition government has pledged 1 billion pounds ($1.6 billion) to fund the first commercial demonstration project to capture and permanently store carbon dioxide. This money will go to a CCS technology that captures CO2 from a coal plant after burning the fuel. Iberdrola SA’s Scottish Power unit is the only company in the running for these funds.

To contact the reporter on this story: Sally Bakewell in London at sbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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