I am pleased to inform Parliament that today, the Prime Minister and I are signing a contract with Shell to take their world leading gas carbon capture and storage (CCS) project into the next stage of development.
The Government has agreed a multi-million pound contract for engineering, design and financial work on the Peterhead CCS project in Aberdeenshire.
The world’s first planned gas CCS project, Peterhead involves installing carbon capture technology onto SSE’s existing Peterhead gas power plant, and transporting the CO2 100km offshore for safe, permanent storage 2km under the North Sea in the old Goldeneye gas field. If built, the project could save 1 million tonnes CO2 each year and provide clean electricity to over 500,000 homes.
The project also opens a potential new future for the North Sea - turning old oil and gas fields into CO2 stores, offering the possibility of using CO2 for Enhanced Oil Recovery and giving new opportunities for the UK’s world leading offshore and subsea industries.
Today’s announcement follows the award in December of a FEED contract to the White Rose project in Yorkshire, and marks a key milestone in the Government’s CCS Competition. We are investing around £100m from our £1bn budget to take the Peterhead and White Rose CCS projects to the next stage of development – which together could support over 2000 jobs during construction and provide clean electricity for over 1 million homes.
In late 2015, the projects will take final investment decisions, with the Government taking decisions shortly after.
By bringing forward CCS, we could save more than £30bn a year by 2050. Without it, achieving an affordable, low carbon energy mix with renewable and nuclear energy alone will be much more difficult and more expensive.