EXCLUSIVE: Shell tells MPs that loss of Peterhead carbon-capture project is huge loss to UK

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EXCLUSIVE Report by Scottish Energy News

The nascent carbon-capture industry was shocked last year when Chancellor Osborne cancelled the £1 billion grant for long-planned Carbon Capture and Storage scheme to be developed in Peterhead by Shell and SSE.

This project was set to create some 600 jobs in north east Scotland and had already reached an advanced planning stage by developer Shell. At the time Shell said only that it was ‘disappointed’ at the Chancellor’s decision.

Now the oil giant has told MPs on the inquiry by the Commons Energy and Climate Change Committee into the ‘Future of CCS in the UK’ that:

  • If approved, the Peterhead project would have been the world’s first CCS facility fitted to an existing gas-fired power plant.
  • It had the potential to bring huge value, placing the UK at the forefront of this vital technology, and developing knowledge for the benefit of a wider industry.
  • The Peterhead CCS project would have in of itself been a large scale contributor to the UK’s decarbonisation efforts, generating 400MW of clean, reliable, baseload electricity for 15 years, cutting emissions by up to 90%, and capturing, transporting and storing up to 15MtCO2.
  • In the short to medium term it could also have been an anchor to develop a CCS hub in the region.

A spokesman for Shell added:

“While we remain committed to carbon-capture and storage projects in Canada, Australia and the Middle East, the decision to end the commercial competition is undoubtedly a setback for the UK CCS industry.

“As noted by Sir Ian Wood in his Report on Maximising Economic Recovery from the UKCS, CCS projects in the UK could also create a source of CO2 that may be suitable in future for Enhanced Oil Recovery.

“Against this backdrop, with future collaboration between industry and Government, there remains the potential to build a future industry in the UK. The UK also remains blessed with one of the largest storage resources in the world, the North Sea, and an established offshore industry.

“Government and industry must now take a step back and look at what models are needed to encourage CCS development and deployment at a rate which will deliver a tangible impact. “

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