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Carbon capture and storage preferred bidders announced

The two preferred bidders in the UK’s £1bn Carbon Capture and Storage (CCS) Commercialisation Programme Competition, referred to by chancellor George Osborne’s Budget statement, have been revealed.

They are the Peterhead Project in Aberdeenshire, Scotland, and the White Rose Project in Yorkshire, England.

The Peterhead Project in Aberdeenshire, Scotland is a project that involves capturing 85% of the carbon dioxide from part of the existing gas fired power station at Peterhead before transporting it and storing it in a depleted gas field beneath the North Sea. The project involves developers Shell and SSE.

The White Rose Project in Yorkshire, England – a project which involves capturing 90% of the carbon dioxide from a new coal-fired power station at the Drax site in North Yorkshire, before transporting and storing it in a saline aquifer beneath the southern North Sea. The project involves Alstom, Drax Power, BOC and National Grid.

“Today’s announcement moves us a significant step closer to a Carbon Capture and Storage industry – an industry which will help reduce carbon emissions and create thousands of jobs,” said energy secretary Ed Davey.“These two are major infrastructure projects potentially worth several billion pounds and could support thousands of construction jobs over the next few years.

“We had four excellent bids and I’d like to thank each one of them for their hard work. We will now be working swiftly to progress our preferred two, while making sure we continue to provide the best possible value to tax payers.”

The two preferred bidders were selected following a period of commercial negotiations with four projects shortlisted from an original eight in October last year. The Government will now undertake discussions with the two preferred bidders to agree terms by the summer for Front End Engineering Design studies, which will last approximately 18 months. A final investment decision will be taken by the Government in early 2015 on the construction of up to two projects.

Captain Clean Energy and Teesside Low Carbon, the remaining two bidders with whom the Government has been in discussion, will be appointed as reserve projects. These bids may be called to participate in the next stage of the competition if one or both of the preferred bidders fails to enter into a FEED Contract by the summer.

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