Developers of a £5 billion plan to create one of the largest carbon stores in the UK have pleaded for “modest, pragmatic” support from the UK government.
Spirit Energy, majority owned by British Gas-owner Centrica (LON: CNA), said its gas fields off the North West coast of England could meet a quarter of the UK’s 2050 carbon storage targets – if the UK government offers a “clear alternative route to market” for its carbon capture and storage (CCS) proposal based on “reliable carbon pricing“.
Spirit, which is celebrating 40 years of production from its Morecambe hub this month, previously unveiled plans to convert its South and North Morecambe fields to store up to 25 megatons of carbon a year (MTPA).
Spirit has forged the Peak cluster partnership, which aims to sequester carbon emissions of five of the UK’s largest cement and lime producers providing an initial customer for the facility. Peak Cluster includes Tarmac (LON: CRH), Breedon (LON: BREE), Belguim’s Lhoist and Aggregate Industries (SW: HOLN), alongside the Lostock Sustainable Energy Plant in Cheshire.
The Morecambe Net Zero (MNZ) cluster off the coast of Barrow-in-Furness missed out on being included in the UK’s track 1 and 2 schemes for CCS, although was one of the few to win a licence in the UK’s first ever carbon storage licensing round.
The group has called for a “predictable and stable carbon price trajectory that ensures emitting carbon is more expensive than storing emissions”.
This will “bolster investor confidence in UK CCS projects and minimise the necessity for taxpayer support”, the group added.
© Supplied by Spirit EnergySpirit Energy chief executive Neil McCulloch said: “Reaching 40 years of production is a tremendous milestone for the company and its employees, and is testament to the dedication of all our onshore and offshore teams.
“The hub plays an important role in supporting UK energy security, economic
growth and local employment opportunities, and can continue to do so in the decades ahead as we transform the fields for carbon storage. It is a superb example of the energy transition in action.
“Carbon storage projects such as ours can make a major contribution to the UK’s net zero goals, and MNZ is uniquely well-placed to provide scale in the right place, at the right time, and at a lower cost to support government targets and deliver its CCUS vision with greater certainty.
“Our ask is modest, pragmatic policy reforms that enable MNZ and other CCS projects outside the Track process to move forward, to drive industrial decarbonisation, and to deliver new green jobs and economic growth.”
Spirit Energy and the Peak Cluster partners have called for commercially mature CCS projects which are not part of the government’s current Track 1 and 2 process to be provided with a “clear alternative route to market, to unlock private investment”.
Centrica, owner of British Gas, is also seeking government support for its £2bn plan to transform its Rough gas storage facility into hydrogen store.
© Supplied by CentricaCentrica chief executive and chair of Spirit Chris O’Shea, said: “For 40 years, Morecambe has been a cornerstone of the UK’s energy security, powering millions of homes and driving economic growth.
“As we look ahead, Morecambe’s transformation into a world-class carbon storage hub will play an equally vital role – cutting emissions from industries like cement
and lime by almost half and cementing the UK’s path to net zero.
“This is energy history evolving into energy future, delivering sustainability, jobs and economic opportunity for decades to come.”
Partners estimate the project would also provide a £1.8bn economic boost to the UK by 2050, creating and safeguarding more than 13,000 jobs across Derbyshire, Staffordshire and Cumbria, and attracting a further £5bn of investment in construction and operations work.
Michelle Scrogham, MP for Barrow and Furness, said: “Congratulations to Spirit Energy and all its employees who across four decades have produced the gas that helped keep homes warm and powered the country’s economic growth, and are now transitioning to support the energy transition.
“Barrow and Furness is uniquely positioned to be a true leader in clean, green energy production, through offshore wind and tidal power and Spirit Energy’s own ambitious plans to develop a world-class carbon store.
“The MNZ project can support the UK’s net zero ambitions, along with providing thousands of highly skilled green jobs in Cumbria and supporting the UK’s transition from oil and gas. These plans will bring multi-billion pounds of investment to the North West, promoting growth and attracting further regional investment that will assist us in making our local economy more sustainable.”
