Energy giant spends £7.12m in a deal to build the first clean coal power station in the UK

The UK could have its first complete clean coal power station if the government gives the project the green light.

Energy giant Centrica has bought an option for £7.15m from Progressive Energy to help build the station. The deal gives Centrica an 85% stake in development company Coastal Energy which is seeking permission to build a clean coal power station in Teesside, North-east England.

If given the go-ahead, the project would be the first to combine Integrated Gasification Combined Cycle (IGCC) and Carbon Capture and Storage (CCS) capabilities, and would lead to the development of a 'clean coal' power station to supply electricity for British Gas customers, together with a pipeline and storage project to capture the CO2 emissions.

Centrica plans to acquire a second option to buy the remaining shares in Coastal Energy at the end of a two-year development phase. This would allow the gas giant to negotiate an engineering, procurement and construction contract, ready for full construction.

Sam Laidlaw, chief executive of Centrica, said: “This landmark agreement gives Centrica the option to take advantage of the environmental and economic benefits offered by emerging clean coal technology and could lead to the development of the UK's first complete clean coal plant.

“It offers the potential to increase the diversity of our power generation, while underpinning our commitment to source low carbon and competitively priced electricity for our British Gas customers.”