By Dow Jones Business News, March 20, 2013, 11:04:00 AM EDT
By Selina Williams
LONDON--The U.K. government said Wednesday it had selected a Royal Dutch Shell PLC-led (RDSB.LN) project to capture
and store carbon emissions from a gas-fired power plant and a Drax-led project at its coal plant as preferred bidders
for 1 billion pound ($1.5 billion) funding.
Shell and U.K. utility SSE's (SSE.LN) project involves capturing 90% of the carbon dioxide at SSE's Peterhead gas-
fired power plant in Scotland before transporting and storing it in a depleted gas field beneath the North Sea.
The Shell-led project is the world's first commercial scale CCS project at a gas plant and dovetails with U.K.
government plans to increase the role of gas in electricity generation in efforts to cut emissions.
The announcement is significant for Shell, which has placed big bets on gas becoming the dominant fuel globally and
while one of the largest producers of oil, is increasingly focused on gas.
The second project, which also includes Alstom (ALO.FR), BOC and National Grid PLC (NG.LN), involves capturing 90% of
the carbon dioxide emissions from Drax's coal plant in Yorkshire in northern England and storing it in an aquifer
beneath the North Sea.
The government aims to agree terms with the two bidders by the summer for front-end engineering design studies, which
will last approximately 18 months. The government will take a final investment decision on the construction of up to two
projects in early 2015.
The technology to capture carbon emissions and store it is already in use, but yet to be demonstrated on a full-scale
commercial size power plant. Critics have said the technology is unlikely to be deployed any time soon due to high
Write to Selina Williams at firstname.lastname@example.org; Twitter: @selinawilliams3
Corrections & Amplifications
This item was corrected at 16:40 GMT to show that the percentage of carbon dioxide the project would capture is 90%.
The original incorrectly stated 85% in the second paragraph.
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