Budget: Agreement on initial engineering design expected this summer
Two carbon capture and storage projects in Aberdeenshire and Yorkshire will progress to the next stage of a competition for up to £1bn of government investment, the government announced in the Budget today.
The Peterhead Project in Aberdeenshire and the White Rose Project in Yorkshire are set to agree terms with the government to progress with initial engineering design before the summer.
Two further bids will now be held in reserve.
The government will decide on which projects will get funding in early 2015. Up to two projects will be funded from the £1bn pot.
Energy secretary Edward Davey said the country had taken a “significant step closer to a carbon capture and storage industry”.
He said: “These two are major infrastructure projects potentially worth several billion pounds and could support thousands of construction jobs over the next few years.
“We had four excellent bids and I’d like to thank each one of them for their hard work. We will now be working swiftly to progress our preferred two, while making sure we continue to provide the best possible value to tax payers.”
Ronan O’Regan, director of energy & clean technology at PwC, said the announcement of a shortlist was a “further step on an already long road” for the carbon capture and storage (CCS) industry.
He added: “The reality is that these projects will not be operational before the end of this decade and will have a limited impact on a looming capacity crunch.
“The government should be looking to accelerate the best projects, regardless of whether they are in the competitive process, to fast track the CCS industry in order to deliver the cost reduction required to make CCS a viable long term low carbon generation option.”