Engineering news
The government has pulled the plug on its £1 billion competition for carbon capture and storage (CCS) technology just six months before it was to be awarded.
Two projects were to be considered for the CCS commercialisation competition funding. One was backed by Shell and SSE at Peterhead. The other, called White Rose, was backed by Drax but fell through earlier in the year following claims by the UK's largest power plant that changes in financial and regulatory environments had made the project 'financially unattractive'.
The news came in a government announcement to the London Stock Exchange, which said: “HM government confirms that the £1bn ring-fenced capital budget for the Carbon Capture and Storage Competition is no longer available. This decision means that the CCS Competition cannot proceed on its current basis. We will engage closely with the bidders on the implications of this decision for them.”
A Shell spokesman said: “Shell is disappointed at the withdrawal of funding for the CCS Commercialisation Competition, in which our Peterhead CCS project was one of the final contenders. We have worked tirelessly over the last two years to progress our plans for this project. It has the potential to bring huge value to the UK, both in terms of immediate emissions reductions and developing knowledge for the benefit of a wider industry.
“Government funding to support this world-first demonstration project, through the competition, was important to achieving the aim of making the technology commercially viable in the shortest possible time. While we acknowledge that this decision has been made in the context of a difficult spending review, without that funding, we no longer see a future for the Peterhead project in the near term.
“Shell remains committed to CCS – as our involvement in demonstration projects in other parts of the world shows – and view it as an important part of a low-carbon energy future.”
Shell's other global CCS projects include the largest CO2 capture demonstration facility in the world, the European CO2Technology Centre Mongstad, Norway. Shell is also developing the Quest project in Canada, which is at an advanced stage of construction, and is a partner in Australia’s Gorgon natural gas liquefaction project.
Dr Jenifer Baxter, head of energy and environment at the Institution of Mechanical Engineers, said the news was very disappointing. Baxter said: “There have been concerns about the initial costs of this technology, but we will only be able to properly assess the viability of UK Carbon Capture and Storage (CCS) upon the successful delivery of a demonstration project. Demonstration projects are a recognised requirement for full commercialisation of all large technologies, without such, new energy management technologies will remain in the shadows.
She added that this meant the UK is “locking ourselves in to relying on unabated fossil fuel power for generations to come”.