2Co Energy drops Don Valley CCS project after failing to secure support

Posted at November 2, 2012 » By : » Categories : News » Comments Off on 2Co Energy drops Don Valley CCS project after failing to secure support

2Co Energy has announced that it will not be taking forward plans for its 650 MW Don Valley carbon capture and storage (CCS) development in Doncaster after failing to secure UK government backing.

Despite topping the list of projects competing for European Union NER300 funding, UK Energy Secretary Ed Davey confirmed this week that the South Yorkshire project, which would have captured 5 million tonnes of CO2 a year and provided low-carbon electricity for over a million homes, is not one of those getting the government seal of approval.

Under the rules of the NER300 competition, member states can support a maximum of three projects from the Commission’s list of contenders.

But because the Commission has also stated that it will support no more than two or three CCS projects across the whole of Europe in the first funding round, Davey says that it makes sense for the UK government to support only two CCS projects along with one renewables project.

For that reason, the government is supporting only the ‘White Rose’ oxyfuel CCS being developed by Alston at Drax’s planned plant in North Yorkshire and Progressive Energy’s consortium effort on a pre-combustion coal gasification project on Teesside.

“This is truly disappointing news,” says 2Co Energy’s CEO Lewis Gillies. “We will complete the current phase of the project… but we cannot take this project further without funding from the UK government.”

The NER300 programme, which expects to reach a decision by the end of the year, will award successful projects up to £250 million.

“We are trying to come to terms with how the UK’s most advanced project that has been selected by the EU for funding and is currently sitting as Europe’s top ranked project has not even made it to the UK’s shortlist,” adds Gillies.

As well as the White Rose and Teesside CCS projects, the UK government is backing the Sound of Islay tidal project, along with Shell and SSE’s post-combustion development at Peterhead and the Kyle Rhea Tidal Turbine Array project on the European Commission’s reserve list.

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Related stories:
Four shortlisted for UK government’s £1 billion CCS competition (31-Oct)
EC shortlists low-carbon projects for €1.5 billion investment (13-Jul0
BOC latest to take stake in 2Co Energy’s CCS project (14-Jun)

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