GEORGE Osborne’s decision to axe a £1 billion competition to deliver carbon capture and storage (CCS) will have a devastating impact on Peterhead, and could cost the region 600 jobs.
The surprise announcement has left the industry reeling and will likely see the CCS Commercialisation Programme in Peterhead being run by Shell and SSE come to an end.
Last night the Scottish Government called the plans “a disgrace”. The Peterhead project was attempting to capture up to 15 million tonnes of carbon dioxide emissions and transport them by pipeline offshore to the North Sea for long-term storage as part of the competition. It was up against another project in Yorkshire, which will also come to an end with the demise of the competition. At its peak the Peterhead project would have seen 600 jobs created.
Energy Minister Fergus Ewing said: “The UK Government’s decision to scrap its £1bn carbon capture and storage programme is a disgrace. It shows complete disregard for tackling climate change, utter indifference to developing the crucial new technologies that will cut emissions and is another UK Government hammer-blow to energy generation in Scotland.
”Just last week the Secretary of State announced an energy strategy heavily reliant on gas, yet the Chancellor has slashed support for the only credible technology which can reduce emissions from large-scale gas generation.
“The UK has 30% of Europe’s CO2 storage capacity alongside an oil and gas infrastructure which can be utilised for CCS. The CCS Commercialisation Programme has already been running for 10 years. Had the competition been allowed to run its course, the world’s first commercial scale gas powered CCS plant could have been built in Peterhead creating new jobs, blazing a trail for innovation and potentially attracting significant investment to the UK.
“This should have been a huge industrial opportunity. Instead the decision to pull the plug on the CCS programme, to meet a deeply flawed austerity agenda, is breathtakingly short-sighted, even for this UK Government.”
Osborne did not announce the end of the competition in parliament, it was only later in an announcement to the London Stock Exchange that the end of the project funding was revealed. There were two bidders, the programme in Aberdeen and the one in Yorkshire.
Carbon Capture and Storage Association chief executive Dr Luke Warren was hugely critical of the Government. He said: “Only six months ago, the Government’s manifesto committed £1 billion of funding for CCS. Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business.”
A Shell spokesman said: “Government funding to support this world-first demonstration project, through the competition, was important to achieving the aim of making the technology commercially viable in the shortest possible time... Without that funding, we no longer see a future for the Peterhead project in the near term.”
A spokesman for SSE said: “Whilst SSE appreciates that being in government involves taking difficult decisions, it is extremely disappointed by today’s announcement that the Government is removing all committed public support for the demonstration of carbon capture and storage in the UK.
“SSE believes this decision represents a significant missed opportunity for the UK.”
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