Short list for UK’s £1bn CCS competition announced

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Four bidders have been short listed for the next phase of the UK’s £1bn Carbon Capture and Storage (CCS) competition. The UK is providing funding…

Four bidders have been short listed for the next phase of the UK’s £1bn Carbon Capture and Storage (CCS) competition.

The UK is providing funding to support the development of CCS technology, which if developed at scale, could allow the safe removal and storage of harmful carbon emissions from coal and gas plant.

The four were selected from eight bids received after a thorough evaluation process that considered project deliverability, value for money, and the Government’s timetable to deliver a cost-competitive CCS industry in the 2020s.

The successful projects are now being invited to take part in a period of intensive commercial negotiations with Government before decisions on which projects to support further are taken in the new year.

Secretary of State for Energy and Climate Change, Edward Davey said:

“We have received some quality bids from industry who have really risen to the challenge set by the competition.

“The projects we have chosen to take forward have all shown that they have the potential to kick-start the creation of a new CCS industry in the UK, but further discussions are needed to ensure we deliver value-for-money for taxpayers.

“Today’s announcement is an important step towards an exciting new industry, one that could help us reduce our carbon emissions and create thousands of jobs.”

“We have one of the best offers in the world and are a leading country in Europe. We will remain in close contact with the European Commission in the coming months as they take their decisions on which projects to support with European funding.”

Three of the UK’s short listed bids also applied for European Commission funding from New Entrant Reserve (NER) allowances.

The Government has written to the Commission to inform them that it is willing to support these projects in the Commission’s Competition, subject to their ultimate success in the UK Competition. The Commission will make a final decision on whether to support a UK CCS project at the end of the year.

The four short listed bids, all full chain capture, transport and storage projects, are in alphabetical order:

  • Captain Clean Energy Project: A proposal for a new 570MW, fully abated coal Integrated Gasification Combined Cycle (pre-combustion) project in Grangemouth, Scotland with storage in offshore depleted gas fields. Led by Summit Power, involving Petrofac (CO2 Deepstore), National Grid and Siemens.
  • Peterhead: A 340MW Post-combustion capture retrofitted to part of an existing 1180MW Combined Cycle Gas Turbine power station at Peterhead, Scotland. Led by Shell and SSE.
  • Teesside Low Carbon Project: A Pre-combustion coal gasification project (linked to c330MWe net power generating capacity fuelled by syngas with 90% of CO2 abated) on Teesside, North East England with storage in depleted oil field and saline aquifer. A consortium led by Progressive Energy and involving GDF SUEZ, Premier Oil, and BOC.
  • White Rose Project: An Oxyfuel capture project at a proposed new 304MW fully abated supercritical coal-fired power station on the Drax site in North Yorkshire. Led by Alstom and involving Drax, BOC and National Grid.

Following further decisions in the new year the Government expects that projects will undertake engineering studies before final decisions to build. The precise timetable for this will be dependent on the projects selected.

Notes to editors:

  1. DECC published the first UK CCS Roadmap on 3 April. This set out the action the Government is taking to enable the development of a new CCS industry in the 2020s, including:
  • the Competition, the ‘CCS Commercialisation Programme’, which aims to drive down costs by supporting practical experience in the design, construction and operation of commercial scale CCS with £1bn capital funding, and additional support, subject to affordability, through low carbon Contracts for Difference;
  • £125m funding for Research and Development, including a £20m innovation competition to support the development and demonstration of CCS at component and pilot scale. Decisions on projects to support under this competition are expected to be announced in the coming weeks;

  • planned long term Contracts for Difference through Electricity Market Reforms to drive investment in commercial scale CCS in the 2020s and beyond;
  • commitments to working with industry to address other important areas including developing skills and the supply chain, storage and assisting the development of CCS infrastructure (and we will be publishing a storage strategy shortly); and
  • a focus on international engagement, in particular on learning from other projects around the world to help accelerate cost reduction in the UK, and sharing the knowledge we have generated through our programme.

2.The CCS Commercialisation Competition was open for bids between 3 April and 3 July. 8 bids were received and 4 of them are now being taken forward as set out above.

The NER300

  1. The NER300 is a European Commission competition for CCS and innovative renewable projects. The Commission is due to announce awards from its first round of funding at the end of this year. In order to do that Member States need to state which projects they are prepared to support from the list that the Commission has published. The Commission have informed us that no more than 2 or 3 CCS projects (across Europe) will receive funding in this round. The maximum support available for CCS projects is around £250m per project. Each Member State is allowed to support 3 projects in total (i.e. CCS and renewables projects combined), although projects on the Commission’s reserve list are allowed to be supported without limitation at this stage.

  2. With a maximum of 2 or 3 CCS projects able to be supported across Europe, the UK will not secure funding for 3 UK CCS projects. The UK has therefore confirmed support for the 1 UK renewable project on the Commission’s candidate list of projects and for the 2 CCS candidate projects that remain in the UK process. The UK has also confirmed our continued support for the 1 renewable and 1 CCS project the UK has on the NER reserve list. (The CCS reserve project also remains in the UK process).

  3. For clarity, the NER projects the UK has supported are:

  • Teesside CCS, White Rose Oxyfuel CCS and Sound of Islay Tidal as our 3 candidate projects;
  • Peterhead CCS and Kyle Rhea Tidal Turbine Array as the reserve projects
  1. Significant UK Government funding is required for the CCS projects. Our support for the CCS projects is therefore subject to them ultimately being successful in the ongoing UK Government competitive process. We have written to DG Climate Action to explain the next steps in our process and to reconfirm the substantial financial offer we have committed to CCS. DG Climate Action will now consider our response and we understand they aim to make Award Decisions to successful projects by the end of this year.