Longannet power station in Fife had double the cause for celebration when major investment in carbon capture technology was confirmed on the same day its only rival for the cash dropped out.
Chancellor George Osborne said £1bn will go towards building power stations with technology to capture and permanently store carbon emissions.
There had been fears the such projects would become a victim of the coalition government’s spending cuts.
The news they had been spared came just hours after energy giant E.ON said it was withdrawing from the procurement process to build the first such facility in the UK-leaving Scottish Power’s Longannet bid as the only remaining contender.
Announcing the £1bn investment, Mr Osborne said it was necessary to “ruthlessly prioritise” areas of the economy which would support economic growth, including low-carbon infrastructure.
The department of energy and climate change later confirmed there would be a second round of carbon capture and storage (CCS) projects, with up to four more schemes given the go-ahead. Funding mechanisms have to be decided.
Thomas Docherty, MP for Dunfermline and West Fife, said, “I am pleased that the UK Government have seen sense and decided not to cut the funding from this vitally important initiative that was kick-started by Labour.
“Carbon capture and storage technology has real potential and Fife is well placed to be at the cutting edge of developing this innovative technology. I appreciate that due process must now be followed, but will continue to champion the Longannet project until the spring, when the final decision is taken.”Commitment welcomedA Scottish Power spokesman added, “We welcome the government’s reaffirmed commitment to making the UK a world-leader in carbon capture and storage.
“This decision will allow the UK to make the most of its leadership position in developing a crucial low-carbon technology of the future, supporting jobs and growth, tackling climate change while keeping the lights on, and delivering critical national infrastructure to secure UK competitiveness.
“The Scottish Power consortium remains committed to the carbon capture and storage project at Longannet, and we are on schedule with our front-end engineering and design work.”
The procurement competition was launched in late 2007 to encourage firms to develop commercially- viable carbon capture and storage schemes.
This year nine entrants were whittled to a shortlist of the Scottish Power and E.ON bids, with the winner expected to be announced early next year.
However, E.ON yesterday said it would not continue with its bid to build a 1600-megawatt power station in Kingsnorth in Kent, saying the market is not conducive to the project.
A spokesman for the Department of Energy and Climate Change said, “The government is naturally disappointed that E.ON has decided not to proceed. Scottish Power remains in the procurement process.
“CCS has significant potential for demonstration and deployment in the UK-we have some of the best CO2 storage sites in the world, as well as the unparalleled engineering expertise needed to make this technology work at commercial scale.”
Once operational, the technology will reduce CO2 emissions by 90% from one 300MW unit at Scottish Power’s coal-fired plant.
It would be equivalent to taking one million cars off the road. A prototype was installed in Longannet in May last year.
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