£20m drive for new ideas in green energy

It follows the failure of a project at Longannet in Fife to win a £1 billion government competition for the technology to remove carbon emissions from fossil fuel power stations.

Bids are being invited to develop better and cheaper CCS components and systems for pilot-scale demonstration.

Mr Davey said: “Carbon capture and storage will play a vital role in ensuring we develop a low-carbon energy mix. We are helping to create a new industry in the UK and are well placed to become a world leader.”

The news was welcomed by the SNP as an opportunity for Scotland.

But the SNP’s Westminster energy spokesman, Mike Weir, said: “The UK government keep announcing competitions, but there never seem to be any prize winners. If ministers are serious about creating a CCS industry, then we need to see real investment to get a project operational.

“The last Labour government torpedoed the Peterhead CCS project – which would have been the world’s first pre-combustion carbon capture plant – which then went to Abu Dhabi instead of Scotland. And last year, the present coalition government pulled the rug from under the Longannet coal CCS project.”

He added: “We need a competition with a closing date and, more importantly, a prize that will guarantee real progress on this important industry.”