SSE Enters U.K. Carbon Capture Race

Researched by Industrial Info Resources (Sugar Land, Texas)--Dong Energy (Copenhagen, Denmark) may have dropped out of the U.K.'s carbon capture and storage (CCS) race last week, but the U.K. is about to get a new entrant in the shape of Scottish and Southern Energy plc (OTC:SSEZY) (SSE) (Perth, Scotland).

The power and gas company has announced that it plans to build the country's largest CCS demonstration plant at the Ferrybridge coal-fired power station near Castleford in Yorkshire. Doosan Babcock Energy Limited (Renfrew, Scotland) and partners will build the 5-megawatt (MW), £21 million ($35.2 million) pilot plant. A planning application will be submitted to Wakefield Metropolitan District Council, and SSE hopes that construction will start next year. If successful, the trial will begin in early 2011 and run into 2012.

The news comes on the back of the government's publication of the "Framework for the Development of Clean Coal" document, which outlines future plans for coal-fired power and CCS. The U.K. is planning to fund four CCS projects up to 400-MW, two post-combustion projects, and up to two pre-combustion projects. However, the government has come under fire for delaying decisions about the projects that will receive funding. Last week, a consortium led by Dong Energy withdrew from the competition to create a demonstration project because of the government's slowness in selecting the projects that will receive funding. For additional information, see related article from November 12, 2009 - Plans for U.K. CCS Projects Suffer Setback.

SSE joins two existing CCS competitors, E.ON AG (OTC:EONGY) (Dusseldorf, Germany) and ScottishPower (Glasgow, Scotland), but SSE is the only company that has created a successful pilot project to date, which was recently completed at the Longannet coal-fired power plant in Fife, Scotland. For additional information, see October 22, 2009, news article - ScottishPower Completes U.K.'s First Carbon Capture Pilot. RWE npower, a subsidiary of RWE AG (OTC:RWEOY) (Essen, Germany), was part of the Dong bid, but now plans to submit a planning application for a 3-MW carbon-capture pilot project at the company's 1,500-MW coal-fired power plant in Aberthaw, Wales.

"Most people agree that the U.K.'s current portfolio of coal-fired power stations still have a crucial role to play in keeping the country's lights on, but that role will have to alter if climate change targets are to be met," said SSE Chief Executive Ian Marchant. "That needs a two-stage policy approach: We agree that no new coal-fired power stations should be built without full carbon-dioxide abatement, but another decision needs to be taken. We believe no coal-fired power stations without full carbon-dioxide abatement should be allowed to operate beyond 2030. The development of the U.K.'s largest carbon-capture demonstration plant at Ferrybridge will be a major step forward in realising the undoubted potential of CCS technology."

Iain Miller, CEO of Doosan Babcock commented: "We are very pleased to cooperate with SSE on the proposed trial at Ferrybridge. The project will help the government achieve its twin goals [of] accelerating the proving of CCS and creating jobs and economic opportunities for U.K.-based companies. Once the technology is proven, we will be well-placed to pursue the international rollout of CCS to meet global targets for reduction of carbon-dioxide emissions."

SSE is already working with Doosan Babcock on evaluating Doosan's oxycoal carbon capture technology at the OxyCoal Clean Combustion Test Facility in Renfrew, near Glasgow, the world's largest OxyCoal firing demonstration project. OxyCoal combustion burns coal in an atmosphere of pure oxygen and recycled flue gas to give an output stream of concentrated carbon dioxide that can then be cleaned and piped away for injection into underground stores. For additional information, see related news item from July 29, 2009 - Clean Coal Takes a Step Closer in Scotland.

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