Feb. 24 (Bloomberg) -- Royal Dutch Shell Plc will proceed with a project to capture carbon dioxide from a U.K. gas-fired power plant after signing an agreement with the government.
Shell will carry out detailed design work for the facility in Peterhead, northeast Scotland, Jonathan French, a company spokesman, said today by telephone. He declined to comment on financial arrangements with the government, saying only that Shell would make a contribution.
Britain is seeking to get a carbon capture and storage, or CCS, industry off the ground by the end of the decade to clean up fossil-fuel power stations and factories. Trapping emissions for burial would allow the country to keep burning coal and gas and running the manufacturing units that drive economic growth.
The Peterhead project, led by Shell and supported by utility SSE Plc, was one of two selected 11 months ago to win funding of 1 billion pounds ($1.7 billion) from the government.
The venture and Drax Group Plc’s White Rose site in northern England will initially get about 100 million pounds of funding between them, the Department of Energy and Climate Change said today in a statement. Shell said its project, which may begin by the end of the decade, could be the first commercial-sized CCS facility at a gas-fired power plant.
The U.K., where climate laws require a cut in emissions of at least 80 percent of 1990 levels by 2050, is seeking to bury CO2 from power generation and industry under the seabed. With CCS, the cost of meeting that emissions plan would drop to 30 billion pounds in 2050, compared with 60 billion pounds without CCS, according to David Clarke, chief executive officer of the Energy Technologies Institute.
“That shows the potential economic importance of the technology as part of the U.K.’s energy mix,” Clarke said today in an e-mailed statement.
The Scottish project will capture carbon dioxide from the Peterhead power station and pipe it to storage 62 miles (100 kilometers) offshore at Shell’s depleted Goldeneye field. The project will use post-combustion capture, which removes the greenhouse gas from the plant’s flue-gas stream, in this case using derivatives of ammonia to absorb the CO2.
The method has already been deployed in several “small” installations in the U.S., according to The Hague-based Shell.
The company seeks to capture 10 million metric tons of CO2 over 10 years at Peterhead, generating enough clean electricity to power the equivalent of 500,000 homes, it said.
--Editors: Amanda Jordan, Rob Verdonck