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U.K. Shortlists Four Projects for $1.6 Billion CCS Funds

Oct. 30 (Bloomberg) -- The U.K. government named four projects led by bidders including SSE Plc and Alstom SA to a shortlist for 1 billion pounds ($1.6 billion) of funding for carbon capture and storage projects.

The four projects, selected out of eight bids submitted between April and July, comprise the Captain Clean Energy, Peterhead, White Rose and Teeside CCS proposals, the Department of Energy and Climate Change said in a statement today. 2Co Energy Ltd’s Don Valley plant wasn’t among those selected.

“The projects we have chosen to take forward have all shown that they have the potential to kick-start the creation of a new CCS industry in the U.K., but further discussions are needed to ensure we deliver value-for-money for taxpayers,” Energy and Climate Change Secretary Edward Davey said in the statement released by his office in London today.

The government aims to spur a carbon-capture industry by the 2020s by supporting commercial operations to bury emissions under the seabed. The 1 billion-pound CCS Commercialization Program replaced an earlier plan that collapsed a year ago as the U.K. withdrew financing for a project led by Iberdrola SA.

All successful projects will now start commercial negotiations with the government before it decides which to support further “in the new year,” according to the department.

Shell’s Plan

Royal Dutch Shell Plc and SSE Plc made the list with a 340-megawatt project in Peterhead, Scotland. Summit Power Group LLC, Petrofac Ltd., National Grid Plc and Siemens AG also proposed a project in Scotland, the 340-megawatt Captain Clean Energy project in Grangemouth.

Alstom SA, Drax Group Plc, BOC Group Ltd. and National Grid Plc aim to develop the 304-megawatt White Rose project at the Drax site in northern England. Also in the north, Progressive Energy, GDF Suez SA, Premier Oil Plc and BOC are planning a project with about 330 megawatts near Teeside.

All aim to capture carbon from coal power stations except the Peterhead project, which will be retrofitted to an existing gas-fired plant.

Three of these projects also applied for European Commission funding under the so-called NER program, which aims to provide as much as 250 million pounds to each of two or three CCS projects in the region. The EC will award an initial round of funding for NER projects and decide whether to support a U.K. CCS project by the end of the year, the department said.

To contact the reporters on this story: Marc Roca in London at mroca6@bloomberg.net; 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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