UPDATE: E.ON Pulls Out Of UK Government Carbon Capture Competition
October 20 2010 - 7:07AM
Dow Jones News
German utility E.ON AG (EOAN.XE) Wednesday said it won't proceed
to the next stage of the U.K. government's competition to fund a
commercial-scale carbon capture and storage project on a fossil
fuel-fired power station, leaving an Iberdrola SA (IBE.MC)-led
project as the only one remaining.
E.ON said in a statement that the economic conditions were still
"not right" for the company to progress the project and that it was
clear that the project at Kingsnorth in Kent couldn't meet the
project timetable.
"Having postponed Kingsnorth last year, it has become clear that
the economic conditions are still not right for us to progress the
project and so, simply put, we have no power station on which to
build a CCS demonstration," E.ON U.K. Chief Executive Paul Golby
said.
The move is a blow to the U.K. government that is aiming to
become a global leader in CCS with a view to exporting the
technology to countries such as India and China that are rapidly
expanding their fossil fuel fired power generating capacity to
support booming economies.
The U.K. government had said it wants to support up to four CCS
projects, which could also include capturing emissions from a gas
power plant.
E.ON said it will instead focus on its Maasvlakte project in the
Netherlands where it is working with Electrabel SA (ELEB-BT), GDF
Suez (GSZ.FR) and the Rotterdam Climate Initiative to conduct a
joint feasibility study for a 250 megawatt carbon capture unit to
be fitted on the new power station currently being built.
The only other contender for government funding is a
ScottishPower-led project at its Longannet coal plant in Scotland.
ScottishPower, the U.K. subsidiary of Iberdrola SA (IBE.MC), is
working with National Grid PLC (NG.LN), Royal Dutch Shell PLC
(RDSB.LN), Aker Clean Carbon and Acccenture PLC (ACN) on the
Longannet CCS scheme.
E.ON had planned to build a carbon capture unit on a new
1,600-megawatt coal station at Kingsnorth, where their existing
coal plant is due to close in 2015 under a European Union
environmental directive.
However, last year, the German utility postponed making an
investment decision on the new coal-fired power station at
Kingsnorth by three years to 2016, citing a fall in power demand
and prices due to the recession.
Company website: www.eon-uk.com
-By Selina Williams, Dow Jones Newswires +44 207 842 9262;
selina.williams@dowjones.com