Industry NewsThe prospects for Carbon Capture and Storage (CCS) have improved after Powerfuel was rescued from administration, revitalising its plans for a commercial project in Hatfield. The scheme had already secured funding from the European Union and its rescue came as the UK Government announced it had applied for additional aid to help CCS at the Drax plant.
Powerfuel went into administration at the end of 2010, effectively leaving only one player actively pursuing commercial CCS developments in the UK. The Government hope to see three to four such facilities developed over the next few decades. The purchase of Powerfuel by TPG Capital-backed 2Co Energy should see the facility operational by 2016. The Don Valley project, a 900MW coal plant near Doncaster, had obtained €180 million from the EU, but required the rest of the 640 million pounds needed for the scheme. Meanwhile, the Department for Energy and Climate Change (DECC) has announced it has put 12 projects forward for funding from the European Investment Bank (EIB).
The EU had put aside €4.5 billion to help support CCS. Only three projects from across the EU will take a share of this funding pot. Drax is one of those being put forward, with a decision on the issue expected in nine months time. Energy Minister Charles Hendry stated, "I am very encouraged by the strength and breadth of the UK applications for this round of...funding...They demonstrate that the UK is at the cutting edge of low carbon energy development, ranging from CCS to wave, tidal and offshore wind."
Lewis Gillies, 2Co Energy Chief Executive, said of the Powerfuel purchase, "Given the political commitment to CCS in the UK and the EU we are extremely pleased to be able to step into this project. Using coal so it has a low carbon footprint meets energy security needs as well as CO2 emission reduction targets."