Storing CO2 Under The Sea gets U.K. Approval

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) --The U.K. has taken a major step towards solving a key part of carbon capture and storage (CCS) problem by granting the first licence for the storage of carbon dioxide (CO2) under the seabed.

The Crown Estate, which manages the country's seabed, announced that it has issued the agreement for lease (AfL) for the permanent geological storage of carbon dioxide to the Peterhead CCS Project, which is owned by Scottish and Southern Energy plc (OTC:SSEZY) (SSE) (Perth, Scotland).

Last November oil and gas company, Shell U.K. Limited (London, England), joined the SSE project at the gas-fired Peterhead plant to offer its expertise for the CO2 storage issue. For additional information, see November 11, 2011, article - Shell Joins Scottish Carbon Capture Project.

SSE is aiming to develop a full chain, post-combustion CCS facility which will be capable of capturing CO2 from one 385-megawatt (MW) combined cycle gas turbine (CCGT) unit at Peterhead, which has a total generating capacity of 1,850MW. The captured CO2 will then be transported to the Shell-operated Goldeneye gas field in the North Sea, using mostly existing infrastructure.

"In early 2012 we introduced a process for project developers to apply for AfL over potential storage sites," the Crown Estate explained. "We are the owner of the storage rights on the U.K. continental shelf and AfLs provide exclusive time-limited options that enable developers to progress their CCS projects through to FID. To date we have received several requests for options over sites and seven of these have been the subject of public notices."

It added: "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. The conclusion of this first AfL with Shell, as operator of the Peterhead CCS Project, is an exciting first step for the fledgling industry and we hope to announce more such agreements from summer 2012 onwards."

The Peterhead project is one of seven CCS projects submitted by the Department of Energy and Climate Change (DECC) to compete in the next round of the European Union's New Entrant Reserve 300 (NER300) fund. NER300 is worth billions of euros and will fund up to half of the cost of the winning projects. For additional information, see May 11, 2011, article - U.K. Carbon Capture Projects Compete For E.U. Funding.

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