By a Newsnet reporter
The announcement that Peterhead power station has been chosen as one of two preferred bidders for a £1 billion Carbon Capture and Storage Commercialisation Programme has been described as a welcome step forward.
The project in Peterhead and the White Rose project in Yorkshire, which was named as the other preferred bidder, will develop their proposals over the next two years before a final investment decision is made in 2015.
In 2007 previous plans to develop Carbon Capture in Peterhead collapsed after BP withdrew from the project blaming Westminster dithering and delay. Meanwhile in 2011, plans to develop CCS technology at Longannet in Fife were dropped after Westminster failed to reach a deal on funding the project.
The Peterhead project envisages the capture and liquefication of up to 90% of carbon emissions from SSE’s gas-fired power plant in Aberdeenshire. Shell will then store the CO2 in the depleted Goldeneye gas reservoir, sited approximately 65 miles off the coast, using existing pipeline infrastructure.
The Peterhead and Yorkshire projects were selected following a period of commercial negotiations with four projects shortlisted from an original eight in October last year. The UK government will now undertake discussions with the two preferred bidders to agree terms for engineering design studies, which will last approximately 18 months. A final investment decision on construction will be taken by the UK government in early 2015.
Westminster’s Secretary of State for Energy and Climate Change, Edward Davey said:
“Today’s announcement moves us a significant step closer to a Carbon Capture and Storage industry – an industry which will help reduce carbon emissions and create thousands of jobs.
“These two are major infrastructure projects potentially worth several billion pounds and could support thousands of construction jobs over the next few years.
“We had four excellent bids and I’d like to thank each one of them for their hard work. We will now be working swiftly to progress our preferred two, while making sure we continue to provide the best possible value to tax payers.”
Ed Daniels, chairman, Shell UK, said:
“The Government’s decision sends a strong signal of support for the role of gas in meeting the rise in global energy demand.
“At Peterhead, we expect to demonstrate capturing around 90% of the emissions from natural gas, making the cleanest burning fossil fuel even cleaner.
“What we learn from the project will help the industry to be able to scale-up the technology to make a material impact on tackling climate change, and to create a world-leading industry here in the UK, with excellent potential for job creation and long-term growth.”
Aberdeen City Council leader Barney Crockett hailed the announcement as very welcome news for Aberdeen.
Clr Crockett said: “This is really wonderful news for the North-east. The Peterhead Carbon Capture and Storage Project not only has the potential to create up to 1,000 construction jobs, but it will also keep the region at the global forefront of developing energy industry technology and expertise.
“It will give the region a really strong competitive advantage over other areas throughout the world, as well as helping to tackle climate change by reducing the release of greenhouse gases. The project will help Aberdeen to further cement its position as a leading world energy city.”
Commenting, SNP MSP Stewart Stevenson whose Banffshire & Buchan Coast constituency covers Peterhead said:
“Carbon Capture has the potential to radically reduce carbon emissions and create a significant number of jobs in Peterhead and across Scotland.
“That is why the fact that Peterhead has been confirmed as a preferred bidder is a welcome step forward, although there is still a long way to go before construction would begin.
“Thanks to the North Sea, Scotland has the biggest capacity for CO2 storage in Europe and that is something we should be making the most of.
“Successive Westminster Governments have let people in Peterhead down time after time with their failures to support previous efforts to bring Carbon Capture to Peterhead power station.
“Westminster dithering saw that project collapse in 2007 and this failure simply must not be repeated.
“I sincerely hope that this time around things are different and that Peterhead can at long last take its place at the forefront of developing carbon capture technology.”