THE UK Government has given a clear signal that the north-east is the front runner in the race for up to £1billion of funding for a pioneering green energy project.
Energy Secretary Chris Huhne said other areas of Britain hoping to secure the huge investment “would have to beat” plans put forward for Peterhead.
He also said there had been “a very clear indication of interest” in the funding from the consortium which wants to create the country’s first carbon capture and storage (CCS) centre at the Aberdeenshire town.
The Press and Journal reported yesterday that the collapse of a CCS project at Longannet in Fife had paved the way for Peterhead’s gas-fired power station to take centre stage in the development of the technology.
The UK Government reiterated yesterday that the £1billion funding remained on the table – and said it was expecting fresh bids.
A spokesman for the Department of Energy and Climate Change said last night a “streamlined” application and selection process would be launched “as soon as possible”.
Ministers will meet industry leaders to discuss the lessons of Longannet and the next stages of the proposals at the Carbon Capture and Storage Development Forum on November 2.
Mr Huhne suggested the group behind the Peterhead plans were the first out of the blocks after the £1billion fund became available again this week.
“We have had a very clear indication of interest back at Peterhead from Scottish and Southern Energy,” he said.
“That is clearly going to be an offer that other contestants will have to beat and we are determined that we should be successful with CCS technology.”
Peterhead power station has long been proposed as a CCS base – with a scheme from BP abandoned in 2007. The plans were resurrected by a consortium of Scottish and Southern Energy (SSE), Shell and Petrofac, with the project already in the running for a share of a £4billion pot of EU funding.
The Peterhead proposal would involve taking carbon dioxide (CO2) emissions from a 385-megawatt gas-powered turbine and pumping them through underground pipes to the St Fergus gas terminal.
The potentially harmful emissions would then be compressed and sent to the North Sea’s Goldeneye platform and then into an existing gas reservoir.
A Scottish Enterprise study revealed this year that the Peterhead scheme could create 937 jobs and lead to £590million of investment during the construction phase.
Tom Smith, chairman of development board Aberdeen City and Shire Economic Future (Acsef), said the project would boost plans for the Energetica corridor of energy-related businesses between Peterhead and Aberdeen.
“Acsef believes Peterhead is in the front running,” he said.
“Our location, in terms of proximity to the North Sea oilfields, and as part of the overall Energetica proposition, combined with our unrivalled offshore engineering expertise make for a compelling case.
“The concerns over Longannet were in relation to commercial viability. Here in the north-east our technical know-how and expertise are daily overcoming the increasingly complex challenges of recovering stranded hydrocarbons in an economically viable way.
“We are confident a CCS project could be delivered successfully in the north-east. It would also be a significant boost to Energetica and our aspiration to become a global energy hub.”
John Wallace, chief executive of Peterhead Port Authority, said the centre would be the “jewel in the crown” of Energetica.
He added: “We support this and will work with all parties involved to be of any assistance.
“The infrastructure is here in Peterhead and that will become important.”