Plans to turn the north-east into a global green energy hub have moved a step closer to reality after two power giants struck a deal to accelerate a “game-changing” project in the region.
SSE and Shell announced yesterday they had reached an agreement which could lead to initial work starting on a proposed carbon capture and storage (CCS) centre at Peterhead within a year.
They also said the scheme would be dependent on EU and UK Government funding.
The Press and Journal reported last month that the gas-fired power station on Peterhead’s outskirts was in “pole position” for a slice of £1billion of government money to develop the technology after the collapse of a coal-fired project at Longannet in Fife.
The Aberdeenshire town has long been proposed as a CCS base – with a scheme from BP abandoned in 2007. The plans were resurrected by a consortium of SSE, Shell and Petrofac, and the project is in the running for a share of £4billion of EU funding.
The deal will enable the firms to accelerate design work for the project, with a full study due to be launched in the second half of next year.
First Minister Alex Salmond said the agreement was an “important step forward” for the development of CCS in Scotland.
“The case for CCS deployment at Peterhead and in Scotland is extremely strong,” he added. “We have world-leading expertise and research and development capacity, a strong industry capability and some of the best carbon storage sites in Europe.
“That is why Scotland remains in the vanguard of what could become game-changing technology.”
The plans involve taking COemissions from a 385-megawatt gas-powered turbine and pumping them to the Goldeneye platform in the North Sea and into an existing gas reservoir.
A study revealed this year that the scheme could create 937 jobs and £590million of investment during the construction phase.
Banff and Buchan MP Eilidh Whiteford welcomed the deal in the Commons yesterday.
Afterwards, she said: “It’s another step in the right direction to ensure Peterhead is at the global forefront of CCS.
“Clearly the whole thing is dependent on government and EU funding and, after the disappointment of Longannet, it’s imperative the project gets the support it needs to go ahead.”
Tom Smith, chairman of regional development board Aberdeen City and Shire Economic Future, said the scheme was part of plans to create the Energetica corridor of energy-related business between Aberdeen and Peterhead.
“With SSE and Shell on-board, we are confident a CCS project could be delivered successfully in the north-east,” he said.
“It would also be a significant boost to Energetica and our aspiration to become a global energy hub.”
SSE chief executive Ian Marchant welcomed the government’s decision to include gas-fired plants in its CCS programme.
“However, the development of a commercial-scale CCS demonstration project presents significant challenges and will require appropriate levels of support from both the EU and UK government,” he added.
Shell’s vice-president-technical Glen Cayley said: “Shell believes CCS is an essential technology in the fight against global climate change and we remain committed to developing CCS in the UK.”
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