Don Valley leads UK CCS charge for €1.5bn EU funds

Published on Friday, 13 July 2012 10:07
Posted by Vicki Mitchem

Yorkshire carbon capture project heads up list including four UK projects, but EU says initial funds may not cover lower ranked proposals

Four UK carbon capture and storage (CCS) projects and one marine energy scheme are under consideration for up to €1.5bn of EU funding.

2Co's Don Valley Power project heads the list of eight CCS proposals, followed by the Belchatow project in Poland, and the Green Hydrogen industrial project in Holland, according to a report published by the European Commission yesterday.

However, the Commission said only the first two to three projects were likely to be supported within the available funds, which leaves the remaining UK proposals at risk of missing out in this first tranche of funding, despite passing due diligence in March.

The remaining projects are Progressive Energy's planned Teesside plant, which ranked fourth, the White Rose proposal backed by Boc, Drax, Alstom and National Grid in fifth place, and C.GEN's project in Killingholme, Yorkshire, in sixth. SSE's proposed post-combustion capture system in Peterhead is second on the reserve list, behind the Getica project in Romania.

These UK projects would only receive monies if a higher ranked project is deselected due to insufficient funds or is not confirmed by the Member State. However, they remain eligible for the UK's £1bn CCS commercialisation competition, the results of which are likely to be announced soon after it closed to applications at the beginning of July.

On the renewable energy list, Scottish Power's Sound of Islay Tidal Project is in line for funding. Should it drop out, the monies would go to Marine Current Turbines' Kyle Rhea tidal stream array. German conglomerate Siemens took over Marine Current Turbines earlier this year.

The Commission said it will ask member states to confirm the projects and national co-funding in early October 2012, with a view to finalising its funding decisions by the end of this year.

The funding is part of a programme to auction 300 million set aside carbon permits in two tranches, collectively known as the NER300. The initial pot was envisaged at some €5bn, but dwindling carbon prices have slashed the amount the Commission expects to receive from the sale of the first 200 million carbon allowances, a process which the European Investment Bank (EIB) is currently undertaking and should be concluded in early October.

The UK initially put forward five renewable energy and seven CCS projects for NER300 funding. But Scottish Power withdrew its plans for a CCS plant at Longannet in October, while Peel Energy announced last month it was abandoning plans for a new 1,852MW carbon-capture power station at Hunterston, Ayrshire.

The Commission said the EIB received 79 project proposals, including 13 CCS and 66 renewable energy proposals, from 21 Member States, with a total of €11.8bn of funding requested.

Source: ©Business Green

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