UPDATE 1-UK shortlists projects for carbon capture funding

Tue Oct 30, 2012 12:40pm GMT

* Three coal and one gas project chosen

* Don Valley project misses out

* Poland likely to win EU cash

LONDON, Oct 30 (Reuters) - Britain has announced a shortlist of four projects that could receive up to 1 billion pounds ($1.6 billion) from a scheme to fund carbon capture and storage (CCS) technology, the Department for Energy and Climate Change (DECC) said on Tuesday.

The government is providing funding to support the development of CCS technology, which it is banking on to reduce climate-warming carbon emissions and as a new export product.

Britain's previous attempts to finance CCS projects have failed as costs rose above expectations and the technology is currently thought to be around a decade away from commercialisation in Britain.

"The projects we have chosen to take forward have all shown that they have the potential to kick-start the creation of a new CCS industry in the UK. But further discussions are needed to ensure we deliver value-for-money for taxpayers," Secretary of State for Energy and Climate Change Ed Davey said in a statement.

The four short-listed bids are Drax's 304-MW coal plant in North Yorkshire, Shell and SSE's 1,180-MW combined cycle gas plant in Peterhead, National Grid and Petrofac's 570-MW coal-gasification project in Grangemouth and Progressive Energy and GDF Suez's 330-MW coal-gasification project in Teesside.

The government expects to take a final decision on the winners of the competition next year. The precise timetable for this will depend on the projects selected, it said in a statement.   Continued...

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