U.K. Carbon Capture Project Leads European Funding Race

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) The U.K.'s Don Valley carbon capture and storage (CCS) project has been listed as the front-runner in the race for European Commission (E.C) backing from a fund worth up to €1.5 billion ($1.85 billion).

The E.C. has revealed a list of eight preferred CCS projects, but only the first three are guaranteed funding in the first round. Of the eight projects listed, four are located in the U.K. but only the Don Valley project is likely to receive funding. The other two projects guaranteed funding is a post-combustion CCS project at the Belchatow coal-fired plant in Poland and an industrial project called Green Energy in the Netherlands.

The mechanism used is the New Entrants Reserve 300 (NER300) funding programme, which will raise the will raise the money through the sale of 300 million emission allowances on the E.U. Emissions Trading System (ETS). It represents the largest global fund for 'clean coal' and renewable projects. The funding available has been reduced significantly in recent times from an original estimate of €4.5 billion ($5.5 billion) thanks to plummeting carbon prices. It was originally claimed that the NER300 funding could pay for up to 50% of the construction and operational costs for the winning renewable and CCS projects. Signs that the fund was shrinking fast first came to light last November. For additional information, see November 10, 2011, article - Europe's Carbon Capture Fund Shrinking.

In its project selection document, the E.C. stated: "Under the ongoing first call for proposals of the NER300 funding programme, some 3 carbon capture and storage (CCS) demonstration projects and up to 16 innovative renewable energy (RES) demonstration projects could be co-funded. The amount of funding is still subject to uncertainty and will be known in October 2012. It is estimated that some €1.3 to €1.5 billion could be available."

"Projects in more than half of the Member States are likely to be supported, including a number of them in Member States in economic and fiscal difficulty at present," it continued. "NER300 funding will leverage a considerable amount of private investment and/or national co-funding across the EU, it will boost the deployment of innovative low-carbon technologies, and it will stimulate the creation of jobs in those technologies in the EU.

The Don Valley project, located in Hatfield, South Yorkshire, is owned by 2Co Energy (London, England). It is a planned 650-megawatt (MW) integrated gas combined-cycle (IGCC) plant that aims to capture up to 90% of its 5 million tonnes of CO2 emissions each year. The power station will cost about €3.6 billion ($4.7 billion) to construct. Recently, German gases and engineering company BOC Group announced that it is taking a 15% stake in the Don Valley Project. For additional information, see November 10, 2011, article - Leading UK Carbon-Capture Storage Project Advances

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