Dong Energy Withdraws from CCS Thermal Power Plants to Focus on Green Energy

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Researched by Industrial Info Resources (Sugar Land, Texas)--Danish energy company Dong Energy (Copenhagen) has announced that it will put a hold on planned investments in coal-fired power stations until 2020 and temporarily suspend operations at one or two existing coal-fired plants in Denmark. The company had plans to set up coal-fired power plants in North Ayrshire in Scotland and Emden in Germany, but has now withdrawn from the projects for environmental reasons. The company intends to concentrate efforts on generating green energy and reducing carbon-dioxide emissions. In fact, Dong has already decided to proceed with a power project at Humberside, England, by fitting it for biomass and gas instead of coal.

The company is making these moves as it does not think that carbon capture and storage (CCS) technology will be commercially viable by 2020, and operating a coal-based power plant without functioning CCS technology is against the company's strategy. According to CEO Nils Bergh-Hansen, although the company believes in the technology, it is not sure whether the political system will be convinced of the technology's capacity. The withdrawal of Dong Energy from the 1,600-MW Hunterston power project in North Ayrshire has placed Peel Holdings plc (Manchester, United Kingdom), Dong's project partner, in a considerably difficult position, as Peel Holdings has never developed a coal-based power plant. The Hunterston plant was to replace the existing Hunterston nuclear power plant that is scheduled to be closed in 2016.

For related news item see October 15, 2009, article - Dong Energy Cancels Two Coal-Fired Projects.

Several energy companies have postponed or cancelled plans to set up power plants in the U.K. after Secretary of State for Energy and Climate Change Ed Miliband announced that all new coal-based power plants must incorporate CCS technologies. However, environmentalists are of the opinion that CCS technology is unlikely to be ready before 2020.

Dong Energy will now invest in the wind energy sector and transform the company's existing coal-based power stations to biomass-based power stations. Dong Energy is Denmark's leading power generating company with a capacity of about 6,500 MW. The company fulfills 50% of the Denmark's power needs. Dong now obtains 85% of its electricity from fossil fuels, while the remaining power comes from renewable energy sources. The company hopes to reverse this ratio in the next three decades. Dong's immediate target is to generate 50% of its energy from CO2-neutral sources by 2020. According to Bergh-Hansen, Dong can choose from several options to achieve this target. For example, CCS technology removes CO2 from the released fumes and stores it elsewhere. However, since the technology may not be commercially viable by 2020, the company will install more wind power capacity and effectively enhance its leading position in the offshore windfarm sector. The company's short-term plans also include the transformation of power-generating facilities from coal-based to biomass-based. Bergh-Hansen expects the renewable energy scene to completely change after 2020, when he believes new technologies will be viable and readily available.

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