Clean coal power station set for £300m windfall

Drax power station near Selby is in pole position to secure a grant worth up to £300m, after the European Commission announced the ‘White Rose’ project is the sole bidder in its competition to help develop carbon capture and storage (CCS) across the continent.

“This project has emerged now as not just the White Rose, but the great white hope for CCS across Europe,” said North West MEP Chris Davies, who helped set up the competition.

CCS is an emerging technology which involves siphoning off the carbon dioxide (CO2) from heavy industrial sites before it is released into the atmosphere. The CO2 is sent down pipelines and buried deep beneath the ground, where scientists believe it can be stored for thousands of years.

The White Rose project involves constructing a new 425MW coal-fired power station at Drax’s existing site, with its carbon emissions transported across Yorkshire in underground pipelines and stored in depleted oil and gas fields beneath the North Sea bed.

More than 1,000 jobs would be created during the construction of the power station, which would produce enough electricity to power every home in North and East Yorkshire.

But its construction would have wider implications for the region as the first part of a Yorkshire-wide CCS network, with a shared pipeline stretching from the Aire Valley to the Humber and taking in every major industrial site.

Experts believe a shared CO2 pipeline is the best prospect of Yorkshire’s heavy industries remaining viable over the long term as the clampdown on CO2 emissions grows tighter.

Funding remains the key issue, however – CCS is still hugely expensive and requires large public subsidy. The announcement that the White Rose scheme is the only entrant in Europe’s main funding competition – known as NER300 – is therefore hugely significant.

Leigh Hackett, a spokesman for Capture Power – the consortium behind the project – said: “We’re delighted our application for NER300 funding has been supported by the UK Government.

“We continue to believe that White Rose will demonstrate the importance of CCS-enabled power stations to the future energy mix of the United Kingdom, through providing clean, reliable and affordable electricity.”

Despite being the competition’s only entrant, however, the White Rose is still not certain to win the grant, as the EU insists all projects must secure match-funding from their own national governments.

George Osborne announced in March that the White Rose project, and another CCS scheme in Scotland, have been shortlisted to win support from Britain’s own £1bn CCS funding competition.

However, the Department for Energy and Climate Change (DECC) wants detailed planning work done on both projects before agreeing to take them forward – a process which is expected to take around 18 months.

If the EU is not satisfied with the guarantees of match-funding when it announces the results of the NER300 later this year, the money Brussels has set aside for CCS may be spent on other renewable energy projects instead.

The threat is very real – there were no winners from the EU’s previous CCS funding competition due to the failure of governments across Europe to offer timely backing. Two projects in Yorkshire – Drax, and another proposed ‘clean coal’ power station, at Hatfield, near Doncaster – both missed out as a result.

“This is still far from a certainty,” said Mr Davies. “It is vital the commission and DECC work closely together to make it happen.”