Abby L. Harvey
GHG Monitor
7/11/2014
The United Kingdom’s White Rose project is poised to become Europe’s first full-scale carbon capture and storage project following the formal announcement this week that the venture has been awarded €300 million in funding from the second round of the European Commission’s New Entrants Reserve (NER) 300 program. White Rose will be a new-build 426 megawatt coal-burning facility located in Yorkshire. The plant is being managed by the Capture Power Ltd consortium, made up of British utility Drax, BOC and Alstom. The plant will be a fully equipped oxy-fuel combustion CCS facility and would capture 90 percent of carbon dioxide emissions for transport to a storage site beneath the North Sea seabed.
The project remains in the early stages of development, but the boost in funding is welcome. “Currently we are well underway with a Front End Engineering and Design study (funded through the UK’s CCS Commercialization Program). The study will give us clarity on the project’s timelines, with a final investment decision expected to be taken at the end of 2015,” Drax spokesperson Melanie Wedgbury said in a written response to GHG Monitor. “The White Rose CCS Project is a multi-billion pound infrastructure project. The [European Union’s] €300 million is a welcome contribution to the Government and private sector investment which will be required for the project.”
The NER 300 award will help ensure further progress for the project, Capture Power CEO Leigh Hackett said in a release. “In December 2013, we entered into the FEED contract for the project as a preferred bidder in the UK CCS Commercialization Program. The NER 300 award represents another significant milestone for us in our development program and an important potential source of funding for the project, as well as providing a strong signal for CCS in Europe. We are well on track to demonstrate the key role that CCS can play in the future UK energy mix.”
Scheme Falls Short of CCS Funding Hopes
This is the first CCS project to benefit from the European Commission’s NER 300 scheme. “It is no secret that in the last round of this NER 300 we would have hoped to see some mature CCS projects, but you know one of the pre-conditions in this system is that the member states in question will also have to be supportive of the project and in the first round it was not possible to have any projects sort of advanced to be qualified for this program. So I think it is a good step for Europe. You know that in the U.K. They have been very very keen on developing CCS technology,” Connie Hedegaard, EU Commissioner for Climate Action, said during the announcement. At the onset of the NER 300 program, it was hoped that the funding scheme would spur up to 12 large-scale CCS demonstration projects across Europe. The €300 award is the maximum contribution a project could receive under the funding scheme.
The European Investment Bank announced the completion of the second and final round of emissions allowance sales under the NER 300 program in mid-April, reportedly raising approximately €548 million from the sale of 100 million allowances. The first 200 million allowances were sold from 2011 to 2012 and generated €1.5 billion in funding. Of that, €1.2 billion was awarded to 23 renewables projects.
While most of the projects awarded funds through the NER 300 where renewables, this does not mean that the EU should turn its back on CCS, Hedegaard said during the announcement. “My personal view is we cannot afford, before you have had big scale demonstration projects, to say we do not like this technology or that technology. We need all the technologies potentially,” she said. “Then you need to have large scale demonstration projects before you can say ‘with this one, there the down sides are so that we decide not to have it.’ That’s where we are with CCS. Get it up running, let’s see, let’s have some experience from it.”
U.K. Labour Party Unhappy With Slow CCS Development
Also this week, the British Labour Party released a position paper decrying the current Coalition government for scaling back the U.K.’s CCS efforts. “Regional clusters of industrial and power users, making use of shared transportation and storage infrastructure, can demonstrate that decarburization is not at odds with industrial activity whilst also serving to rebalance our economy. This is not the trajectory that has been established by the Coalition Government. From the scaling back of the second CCS competition to the lack of progress on industrial applications, the Coalition’s approach has been typified by dithering and delay. There is a real danger that Labour’s legacy of international leadership on CCS will be squandered by the Coalition,” the paper says.
The paper goes on to note that prior to the Coalition government taking control in 2010 the country was positioned to launch four CCS projects and a CCS levy has been enacted. Post-2010, the Coalition Government has scaled back its commitment from four to “up to two” projects and abolished the levy. There has also not been a clear signal from the government regarding the allocation of £1 billion for CCS projects, according to the paper. “There are ongoing questions about the availability of £1bn in capital funding previously promised by the Coalition. FEED studies are expected to demand £100m of that funding, but there has been no indication of whether the remaining £900m is still available or when it might be spent,” the paper says.
Further, the paper says that the success of proposed U.K. CCS projects in securing EU funding is a clear indicator that the projects are worthy of national support. “The strength of some of these projects is evidenced by the fact that the Don Valley Power Project was awarded €180 million of EU funding in 2010 and intends to be operational by 2018/19, although that prospect still depends on access to a [contract for differences],” according to the report. Don Valley had been the top runner for the first round of NER 300 but was dropped from the competition when the U.K. failed to pledge financial support. The project was however awarded funds under the EU’s European Economic Program for Recovery program.
