The U.K. unit of oil major Royal Dutch Shell PLC (RDSA) and U.K. electricity and gas network operator National Grid PLC (NGG) are joining ScottishPower's carbon capture and storage consortium, the company said Thursday.

The consortium is in the process of submitting a bid for the U.K. government's CCS competition, which aims to deliver up to four CCS projects. It is also interested in and involved in the European Union competition for a total of around EUR1 billion funding across 12 CCS demonstration projects to be operating by 2015.

"Both of these companies will bring specialist knowledge, expertise and opportunities for growth in the development of this cutting edge technology. For the consortium the two new companies represent a 'perfect fit' as it strives to reduce CO2 emissions by 90% from its power plant at Longannet in Scotland," said Nick Horler, chief executive of ScottishPower, the U.K. unit of Spanish utility Iberdrola SA (IBE.MC).

Shell, a global leader in oil and gas exploration and production and with operations in the North Sea, is already taking part in a variety of projects to capture and geologically store carbon, making the company well placed to be part of the consortium.

As hydrocarbon production in the U.K. portion of the North Sea is now declining, government and companies want to use depleted offshore oil and gas fields to store carbon dioxide, hoping the sector will preserve jobs in the area.

"Shell believes CCS is a technology that will be vital to tackling climate change and we believe that at this stage it is essential that we 'learn by doing' in order to reduce costs, accelerate technology and ultimately make CCS commercially viable," said Shell vice president John Gallagher.

Shell is involved in a wide range of CCS demonstration projects around the world, including the U.S. and Canada, Germany, Australia and Norway plus over 20 research projects worldwide.

National Grid is the owner and operator of the U.K.'s gas pipeline system and has expertise in high-pressure pipelines.

"The Longannet project also presents a potential opportunity to reuse some of our existing natural gas transmission pipelines in Scotland for carbon dioxide transportation as North Sea gas supplies decline, helping the scheme to a running start," said National Grid's Director for Network Operations Chris Train.

The companies are joining Norwegian carbon removal specialists Aker Clean Carbon, a unit of Norwegian technology company Aker ASA (AKER.OS), in the ScottishPower consortium.

German utilities E.ON AG (EOAN.XE) and RWE AG (RWE.XE) are also involved in the U.K. government competition for projects at coal-fired power stations.

The U.K. government is aiming to shortlist the companies this year and announce the winners next year.

-By Selina Williams, Dow Jones Newswires +44 207 842 9262; selina.williams@dowjones.com