Longannet plant loses out on £160m carbon capture fund

SCOTLAND'S bid to become a global leader in energy technology that could massively reduce carbon emissions and transform the economy has been struck a blow after losing out on £160 million in European funding.

Longannet power station, which recently began a pioneering carbon capture and storage (CCS) system, had been in the running to receive a share of 1 billion from the European Commission to develop the fledgling technology.

The European Commission is set to name Hatfield in Yorkshire as the only successful UK bid, along with six other plants in Germany, France, the Netherlands, Poland, Spain and Italy.

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The failure to secure the EU funding has raised question marks over the prospect of Longannet winning a crucial 1 billion funding the Department for Energy and Climate Change have put up for competition.

The UK government is holding a competition to demonstrate CCS, with the winner set to develop the technology on a commercial scale.

First Minister Alex Salmond is a long-term supporter of CCS and had voiced ambitions for Scotland to become "a world leader" in this technology.

ScottishPower, which owns Longannet, has entered the competition and in May began a groundbreaking trial of the technology, the first time it has been used at an operational coal-powered station.

The technology is believed to be capable of capturing 90 per cent of the station's emissions, turning it into liquid, before piping it into disused North Sea oil fields or porous rock beneath the seabed.

Yesterday Richard Dixon, director of WWF, which recently published a study identifying Longannet as the best option in the UK competition for CCS funding, said: "It is disappointing Longannet has not been chosen this time around. We sincerely hope it will get some form of support to properly test this technology soon, whether it is from Europe or as a winner of the UK government's own CCS competition.

"The world urgently needs technology that will reduce our climate emissions and Scotland is well placed to take a global lead in this important field.

"The power sector is responsible for more than a third of Scotland's emissions, most of it from burning coal. CCS is a potentially important technology which could help reduce emissions around the world."

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It is understood that Hatfield was chosen on the basis that its own proposal was for a pre- combustion system, in which the carbon is captured before the coal gas is burned. There were few pre-combustion systems among the bidders while there were a number of post-combustion systems such as Longannet, and the European Commission wished to have an even spread of options. However, it is also understood that next year a further 6bn is expected to be allocated to develop CCS systems.

Yesterday Willie Rennie, the Liberal Democrat MP for Dunfermline and West Fife, said he was not despondent and said he believed Longannet could still benefit from the second pot of EU funds to be released next year. "People in Europe are still very excited about Longannet and it has an excellent chance of winning the government's competition," he said.

Recently academics at Edinburgh University, sponsored by the Scottish Government, produced a report that said CCS could be the blueprint for an industry that may outstrip oil and gas in importance to the future economy and bring an estimated 10,000 jobs. The report found the potential capacity exists to store up to 46,000 million tonnes of emissions in rocks beneath the Scottish waters of the North Sea.

Last night a spokesman for ScottishPower said: "Whilst we are waiting for official confirmation from the commission and the actual award is some months off, ScottishPower continues to be focused on the UK government's carbon capture and storage competition and are still able to deliver a retro-fit project at Longannet by 2014."

A spokesman for the Scottish Government said: "Longannet is a strong contender in the UK CCS competition, and we hope that this will be recognised."