Pledge on carbon capture as project abandoned

ScottishPower’s plant at Longannet, Fife, had been the only remaining site in the Government’s first competition for funding worth up to £1bn to develop CCS, which it is hoped can be used to slash emissions from power and other heavy industries by capturing CO2 before it is released and burying it safely underground.

Yorkshire has long harboured ambitions of hosting several CCS projects as it strives to become the UK’s centre for green energy. Proposals in this region include CCS power plants at Hatfield, Killingholme and Selby – but all will require public subsidies to proceed.

The Longannet plant has always been first in line for Whitehall funding, however – but Energy and Climate Change Secretary Chris Huhne announced yesterday that it had not been possible to reach a satisfactory deal on the scheme with its developers.

Mr Huhne told the Commons: “Despite all the parties working extremely hard, we have not been able to reach a satisfactory deal. We will therefore not be proceeding with the project.

“The decision is purely about the viability of this particular project. It’s not in any way a reflection on our commitment to the CCS programme. We now know that commercial-scale CCS projects are technically viable, and are likely to be financially achievable.”

Officials said the Longannet scheme did not offer value for money for the taxpayer compared to other projects which could be developed.

The previous Labour government had announced plans to help to fund four CCS demonstration projects around the UK. David Cameron said yesterday the funding would still be available despite the collapse of Longannet.

Speaking at Prime Minister’s Questions, he said: “The funding we set aside for carbon capture is still there. That funding will be made available.

“Clearly the Longannet scheme isn’t working in the way they intended, but the money from Government... for this vital technology is still there.”

2CO Energy, the firm behind the Don Valley project at Hatfield, near Doncaster, said it regretted the collapse of Longannet but welcomed the Government reaffirming its commitment to CCS.

The firm remains confident it can succeed in winning funding for a large clean coal CCS power station at Hatfield Colliery, with the scheme having already scooped £150m in EU funding.

The 2CO proposal involves burying the captured CO2 in depleted oil and gas fields beneath the North Sea and recovering out otherwise unreachable oil at the same time. This extra revenue stream makes it a more viable prospect, the company believes.

2CO chief executive Lewis Gillies said it was a “crying shame” Longannet had been cancelled, but added: “We welcome the sentiment of Chris Huhne’s statement today – that the funding made available for CCS in the UK will remain available.”