U.K. Opens Carbon Capture Funding to Gas-Fired Plants

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. has announced that gas-fired power plants will be allowed to compete for a share of the government's 10.5 billion-euro ($14.4 billion) carbon capture and storage (CCS) demonstration programme.

Until now, only coal-fired plants have been eligible to compete for valuable government funding to construct and test commercial-scale CCS projects. The government claimed the decision was based on a plan to become the world leader in CCS technology and for the U.K. to host the first gas-fired plant with commercial-scale CCS.

The news comes just weeks after German energy giant E.ON AG (OTC:EONGY) (Dusseldorf) scrapped its CCS development efforts at its Kingsnorth coal-fired plant in Kent. For related news, see October 25, 2010, article - E.ON Drops U.K. Carbon Capture Project. The departure has pushed its rival ScottishPower (Glasgow, Scotland) and its working CCS pilot at the Longannet coal-fired plant in Fife, east Scotland, to the front of the queue for government funding.

"Today, the government is reasserting its mission to lead the world on CCS by opening our funding process to what could be one of the first commercial-scale CCS projects on a gas-fired plant in the world," said Chris Huhne, Energy and Climate Change Secretary. "The U.K. looks set to rely on gas for years to come. We won't be able to take the carbon out of all gas plants overnight, but we hope to support the process by investment in new technology now. In the long run, carbon capture will help provide us with a secure and affordable energy system, and we want to encourage companies with projects on both gas- and coal-fired power stations to come forward."

The U.K. has committed to funding four commercial-scale CCS projects, but now the three projects after the first demonstration project potentially could be either gas-fired or coal-fired power plants.

The government's Committee for Climate Change, which urged the government to allow gas-fired plants to apply for CCS funding, welcomed the decision.

David Kennedy, the chief executive for the Committee on Climate Change, said: "We strongly welcome this announcement. Carbon capture and storage is a very promising technology which the U.K. has the potential to be a leader in, and which we should demonstrate at large scale as soon as possible. Previously, the programme had only been open to coal plants, which in the future will be required to fit the technology to capture and store emissions, rather than release them into the atmosphere."

He added: "The committee's analysis shows that the path to meeting the U.K.'s 2050 target to reduce emissions by 80% requires that the power sector is largely decarbonised in the period to 2030 (e.g. average emissions should be less than 100 g/kWh in 2030, compared to around 500 g/kWh today). Currently, about one-third of the U.K.'s generation capacity comes from gas plants, but this is expected to double later this decade as old coal and nuclear plants close."

In July, Scottish and Southern Energy plc (OTC:SSEZY) (SSE) (Perth, Scotland) announced it is going to construct a large CCS demonstration project at the 1,840-megawatt (MW) gas-fired power station in Peterhead, Aberdeenshire. For related news, see July 12, 2010, article - Carbon Capture Project for Scottish Gas-Fired Plant.

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