By Selina Williams
LONDON--The U.K. government said Wednesday it had selected a
Royal Dutch Shell PLC-led (RDSB.LN) project to capture and store
carbon emissions from a gas-fired power plant and a Drax-led
project at its coal plant as preferred bidders for 1 billion pound
($1.5 billion) funding.
Shell and U.K. utility SSE's (SSE.LN) project involves capturing
85% of the carbon dioxide at SSE's Peterhead gas-fired power plant
in Scotland before transporting and storing it in a depleted gas
field beneath the North Sea.
The Shell-led project is the world's first commercial scale CCS
project at a gas plant and dovetails with U.K. government plans to
increase the role of gas in electricity generation in efforts to
cut emissions.
The announcement is significant for Shell, which has placed big
bets on gas becoming the dominant fuel globally and while one of
the largest producers of oil, is increasingly focused on gas.
The second project, which also includes Alstom (ALO.FR), BOC and
National Grid PLC (NG.LN), involves capturing 90% of the carbon
dioxide emissions from Drax's coal plant in Yorkshire in northern
England and storing it in an aquifer beneath the North Sea.
The government aims to agree terms with the two bidders by the
summer for front-end engineering design studies, which will last
approximately 18 months. The government will take a final
investment decision on the construction of up to two projects in
early 2015.
The technology to capture carbon emissions and store it is
already in use, but yet to be demonstrated on a full-scale
commercial size power plant. Critics have said the technology is
unlikely to be deployed any time soon due to high costs.
Write to Selina Williams at selina.williams@wsj.com; Twitter:
@selinawilliams3
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