Landmark deal boosts region’s £3bn clean coal power hopes

PLANS to develop a £3bn “clean coal” power station in Yorkshire will take a huge step forward today when one of the world’s largest technology giants agrees a massive investment deal with the region’s flagship green energy project.

Samsung will this morning sign a landmark deal to see the multinational take on a leading role in plans to develop the UK’s first 650MW carbon capture and storage (CCS) power station at Hatfield in South Yorkshire.

The deal with Hatfield project managers 2Co Energy is the largest of three major deals struck between Yorkshire firms and Korean energy giants this week, as Deputy Prime Minister Nick Clegg continues his trade tour of the Far East.

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The Sheffield Hallam MP announced yesterday that Weir Valves and Controls in Elland has won a £17.5m contract with KEPCO to manufacture control valves for nuclear reactors, while Huddersfield-based David Brown Gear Systems will supply gearboxes for Samsung’s wind turbines.

But it is the Samsung agreement this morning to take on a 15 per cent stake in the Don Valley Power Project in South Yorkshire which will attract by far the greatest attention, offering a huge vote of confidence in a pioneering scheme which has remained stubbornly on the drawing board since it was first announced in 2009.

The proposal involves the construction of a huge new coal-fired power station at the colliery near Doncaster, and the harnessing of cutting-edge CCS technology to capture harmful carbon emissions before they are released and then stored in depleted oil and gas fields beneath the North Sea.

The project’s original developers Powerfuel went into administration in 2010 after failing to find private backers to support the scheme, despite having collected £160m in EU funding.

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Samsung’s involvement suggests the Korean firm has real faith in new owner 2Co’s radical plan to use the captured CO2 to extract previously unreachable oil from the North Sea – potentially bringing down the cost of the scheme enormously while delivering significant new tax revenues for the UK.

2Co chief executive Lewis Gillies said: “Samsung’s landmark investment is a major vote of confidence in the UK’s potential to lead the world in CCS technology.

“The Don Valley Power Project is the largest and most cost effective CCS project in Europe, and Samsung’s capability, strength and scale now make it Europe’s most deliverable CCS project as well.”

In addition to taking a major equity stake in the project, Samsung has been awarded the contract to oversee the engineering and construction of the new power station. The agreement was due to be signed off in Seoul in the early hours of this morning.

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Yeon-Joo Jung, vice chairman and chief executive of Samsung Construction and Trading (C&T), said: “The Don Valley Power Project is defining the future of low carbon energy generation in the UK, and we are delighted to be part of the project.

“Samsung C&T will work with 2Co to create an international hub of knowledge and expertise in a vital new technology the rest of the world is looking to pioneer.”

The Hatfield scheme is of enormous significance to Yorkshire and the UK, as it is expected to form the first part of a wider CCS pipeline that could eventually collect CO2 emissions from all Yorkshire’s major polluting industries.

A region-wide pipeline could cut the UK’s entire carbon output by 10 per cent, while securing tens of thousands of industrial jobs in Yorkshire for decades to come.

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Stephen Brown, director of strategy at the region’s low carbon advisory firm CO2Sense, said: “Today’s announcement reinforces Yorkshire as the best location in Europe to commercialise CCS.  

“The Don Valley Power Project will become an anchor for what could become the world’s first industrial CCS cluster.”

The project’s success remains dependent on it winning further funding from both the public and private sectors, however.

It is one of the favourites to win further EU backing in its next CCS funding round later this year, and will also bid for a share of the £1bn which the UK Government has set aside to support CCS projects.

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Julian Smith, the Tory MP for Skipton and Ripon, said it was vital the region wins backing at all levels to develop its plans.

“This announcement is another illustration of how Yorkshire can become a world leader in the development of CCS technology,” he said. “This region has the expertise, the skills and the desire to make the projects proposed in the Don Valley – and across Yorkshire – a success.”