Powerfuel welcomes EU carbon capture funding

Powerfuel has today welcomed its selection for €180m (£164m) of EU funding to install carbon capture and storage technology at its 900MW Hatfield site near Yorkshire.

After several weeks of speculation, the European Commission confirmed that it had recommended the Hatfield project for the funding over rival proposals from E.ON at Kingsnorth, RWE at Tilbury and Scottish Power at Longannet.

The funding is now subject to final approval by the EU parliament, but Richard Budge, chief executive of Powerfuel, welcomed the recommendation as a major step forward for the project. "We are delighted that our application for the European Economic Recovery Package funding has been successful and would like to express our gratitude to all those who have supported our project since 2002," he said.

The other schemes to make the shortlist are Vattenfall's Oxyfuel project in Germany, the Rotterdam Hub scheme in the Netherlands, a Polish project in Belchatow and Endesa's OxyFuel project in Spain, with each now expected to receive €180m in EU funding. A sixth scheme proposed by Enel in Italy has also been recommended for a smaller subsidy of €100m.

Powerfuel's proposal was the only successful project site that plans to demonstrate Integrated Gasification Combined Cycle CCS technology, where the carbon is removed before the coal is burned.

Experts said that securing the funding for the project will help the region in its bid to develop a CCS cluster where a number of plants capturing carbon can share the same infrastructure to pump the captured gas to undersea storage sites.

"Nowhere in Europe has such a large number of power stations so close to safe carbon storage in depleted gas fields in the North Sea, and the region has access to proven technology and engineering skills," said Tom Riordan, chief executive at development agency Yorkshire Forward. "We have the potential of storing up to 10 per cent of the UK’s carbon emissions."

A successful storage infrastructure could also attract cement and steel industries to the area as they also look to capture and store their carbon emissions.

Yorkshire Forward is working with the National Grid to put a gas transfer infrastructure in place and is seeking private sector investment as it looks to begin construction on the project within the next two years.

Rosie Winterton MP, minister for Yorkshire, said the Hatfield project would provide a significant boost to the area. "It will bring huge economic benefits to our region and shows our commitment to cutting carbon emissions and dealing with this global issue," she said.