The Oil and Gas Authority (OGA) has handed it out its first license allowing offshore exploration for the purposes of a pioneering clean energy scheme.
A four-year carbon dioxide appraisal and storage license has been granted to the Acorn carbon capture and storage (CCS) project at St Fergus, near Peterhead.
It comes after the UK Government last week set out an “action plan” to roll out the technology, and have the first major CCS project up and running by the mid-2020s.
The announcement came with a £175,000 fund for the Acorn project, run by Pale Blue Dot, and a pledge to work with the OGA to identify existing oil and gas infrastructure for reuse as CCS.
Acorn aims to develop a large scale CCS project at the St Fergus gas terminal.
This license is the first of its kind issued since the creation of the OGA in 2015, allowing offshore exploration to select a site for storing C02 underground.
Andy Samuel, chief executive of the OGA said: “The OGA fully supports the transition to a low carbon economy and can play a role in the transition. We undertake a wide range of activities which complement this, including licensing carbon capture usage and storage projects such as this.
“We welcome the government’s recently-announced Action Plan to develop the UK’s first carbon capture, usage and storage projects and are continuing our close working with the government and others to identify existing UKCS infrastructure which could be re-used.”
Pale Blue Dot has already identified various pipelines that currently or have previously been used to serve the North Sea which could be repurposed for CCS, along with a potential storage site.
Under the terms of the agreement, Acorn CCS would need to apply for and win a storage permit before CO2 injection could begin.
Alan James, managing director of Pale Blue Dot Energy and the Acorn CCS Project Leader, added: “Securing the CCS Licence is a really important step to help us develop one of the UK’s first CO2 transportation and storage networks.
“Through Acorn CCS, Scotland can use legacy oil and gas assets to deliver environmental benefits, unlocking CO2 transportation and storage solutions for other CCUS projects along the east coast of the UK.”
The government has recognised that developing CCS is “crucial” to meet climate change targets, despite pulling £1bn funding for a similar project in Peterhead in 2015.
UK energy and clean growth minister Claire Perry said: “This project shows our modern Industrial Strategy in action as companies, backed by government, seize the economic opportunities of moving to a greener, cleaner economy.
“Industry has a crucial part to play in meeting our world-leading ambition to develop and deploy this cutting-edge technology to reduce emissions so it’s great to see more key players joining the race to build the UK’s first facility.”
