Drax Carbon-Capture Plan Is Biggest Winner of EU Funds

Drax Group Plc’s plan to capture greenhouse gases from a coal-fired power plant and pump them underground for permanent storage was the biggest winner of European Union funding for low-carbon projects.

Nineteen projects in 12 countries won 1 billion euros ($1.4 billion) of funds, according to a statement today from the European Commission, the 28-nation bloc’s regulatory arm. White Rose, a project by Drax, Alstom SA, BOC Group Ltd. and National Grid Plc, won 300 million euros of the funds.

The award is a boost for carbon capture and storage, or CCS, a technology that could allow nations to cut emissions of heat-trapping gases while still burning fossil fuels. The 426-megawatt White Rose project would be the first large-scale CCS project in Europe, the commission said.

“With these first-of-a-kind projects, we will help protect the climate and make Europe less energy-dependent,” EU Commissioner for Climate Action Connie Hedegaard said in the statement. “The 1 billion euros we are awarding today will leverage some additional 900 million euros of private investment.”

The next-biggest winner was an EON SE project in Sweden called Bio2G that aims to produce natural gas from biomass. It won 204 million euros, while Martinique, a French island in the Caribbean, was awarded 72 million euros for an ocean-energy project that will be built by DCNS SA and will use the temperature difference between the sea surface and colder deep water to generate electricity.

Demonstrating CCS

White Rose will be built next to Drax’s existing power station near Selby in North Yorkshire and capture 90 percent of its CO2 emissions, piping them for storage beneath the North Sea. The funding is a “strong signal” by the EU for the technology, Leigh Hackett, chief executive officer of the venture, said today in a statement.

“We are well on track to demonstrate the key role that CCS can play in the future U.K. energy mix,” Hackett said.

White Rose and a second CCS project by SSE Plc at Peterhead in Scotland are already receiving 100 million pounds ($171 million) of U.K. government money to support design and engineering work. Both are eligible to receive as much as 1 billion pounds, according to a statement today from the Department of Energy and Climate Change.

Bioenergy projects in Denmark, Estonia, Latvia, Spain and Sweden also won EU funds, as did geothermal projects in Croatia and France, wave power projects in Ireland and Portugal, solar plans in Cyprus, Italy and Portugal two wind projects in Spain and smart grid proposals in Cyprus and Italy.

It’s the second set of awards under the EU’s so-called NER300 program, which gets the aid from the sale of allowances to emit carbon dioxide set aside in a special reserve under Europe’s cap-and-trade program. The bloc in December awarded 1.2 billion euros to 23 projects in 17 nations.

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