The Secretary of State said:
“This is good news for Peterhead and Scotland as a whole. This is a major infrastructure project which could potentially support a significant amount of investment and jobs which would be a tremendous boost for the economy around Peterhead. It also demonstrates that once again Scotland is leading the way in deploying new and innovative types of energy generation.
“Thanks to the strength and depth of the UK fiscal base, significant funding is available for Scottish green energy projects through competitions such as the CCS Programme, this can only reinforce Scotland’s place as an international green energy hub.”
The Peterhead project involves capturing around 90% of the carbon dioxide from part of the existing gas fired power station at Peterhead before transporting it and storing it in a depleted gas field beneath the North Sea.
The UK Government’s carbon capture and storage commercialisation competition makes available £1 billion capital funding. Peterhead along with the White Rose Project in Yorkshire, England were named as the UK Government’s two preferred bidders in the Budget following a period of intensive commercial negotiations with four projects shortlisted from an original eight in October last year.
The Government will now undertake discussions with the two preferred bidders to agree terms by the summer for Front End Engineering Design studies, which will last approximately 18 months. A final investment decision will be taken by the Government in early 2015 on the construction of up to two projects.