PRESSURE was mounting on the UK Government last night to back plans for a pioneering green energy scheme in the north-east after it failed to win a huge Brussels grant.
The bid to build Britain’s first carbon capture and storage (CCS) plant at Peterhead was dealt a blow when it was placed on a reserve list for EU funding of up to £1.2billion.
Eight other projects have made it to the shortlist for the first round of the NER300 competition, according to a new European Commission report.
Only the first two or three bids are likely to win financial support.
However, Scottish and Southern Energy and Shell, which are spearheading the plan for Peterhead Power Station, were undeterred last night.
They say their scheme – which could create nearly 1,000 jobs – remained a strong contender in the UK Government’s own £1billion CCS competition.
Yesterday, the project secured the UK’s first licence to store carbon dioxide (CO2) offshore under the seabed.
An agreement for lease (AfL) was announced by the Crown Estate, confirming that carbon from the gas-fired power plant at Peterhead can be pumped to Shell’s depleted Goldeneye field, about 65 miles off the Buchan coast.
A Scottish Enterprise study revealed last year that the north-east CCS plan could create 937 jobs and lead to £590million of investment during construction.
Peterhead Power Station was put forward as a potential CCS base several years ago but the BP-led initiative was abandoned in 2007. The plans were resurrected by a consortium involving SSE, Shell and Petrofac.
Last night, Shell UK chairman Graham van’t Hoff said: “For most countries, using more gas instead of coal in power generation can make the largest contribution at the lowest cost to meeting their emission-reduction targets in this decade.
“However, CCS will need to be applied to gas in the future, where it will have a lower COstorage requirement than coal, so it’s important we demonstrate the technology now.
“The Peterhead CCS project is well positioned.
“Almost all of the infrastructure needed is in place and is suitable for use. With government support it has the potential to provide an important UK and global contribution to understanding, developing and implementing CCS applied to gas-fired power generation before 2020.”
Banff and Buchan MP Eilidh Whiteford said it was more important than ever for ministers to “press on and make an early funding decision”.
She said: “We need the UK Government to put its money where its mouth is and deliver the funding to make this happen.
“It is essential that the UK Government seize the moment.
“Ministers must now recognise the very strong case which exists for the Peterhead project going ahead.
“Scotland has some of Europe’s largest carbon-storage reserves in our North Sea oil and gas fields, combined with the expertise on how to access them.
“And carbon capture investment can also be a key driver of economic recovery in Scotland.”
A spokesman for the Crown Estate said last night: “We see CCS as an important technology in helping manage climate change and security-of-energy-supply issues as part of the various ways of continuing to deliver power and industrial processes to the UK with low or zero emissions.”
He added: “Much work still has to be done to progress CCS and in particular transport and storage infrastructure.
“We look forward to working with those developers who are successful in the UK Government’s commercialisation-funding competition.”
