Joint Development Agreement on Carbon Capture and Storage

SSE plc has entered into a joint development agreement with Shell U.K. Limited (Shell) in relation to the proposed Carbon Capture and Storage (CCS) project at SSE’s gas-fired power station in Peterhead, Aberdeenshire.

The agreement will enable the project to accelerate a programme of pre-FEED (Front-End Engineering Design) studies, with the intention that the project will be in a position to begin a full FEED study in the second half of 2012, subject to progress with funding proposals submitted under the EU’s NER300 process and developments in the UK’s CCS demonstration programme.

The project aims to design and develop a full chain, post-combustion CCS facility which will be capable of capturing CO2 from one 385 MW combined cycle gas turbine unit at SSE’s Peterhead Power Station. It is planned that the CO2 will then be transported to the Shell operated Goldeneye gas field in the North Sea using, as far as possible, existing infrastructure

SSE will lead on all aspects of the capture plant at Peterhead, including initial compression and dehydration; with Shell examining all other aspects, including onshore and offshore transportation and storage. 

In May 2011, the UK government announced that the Peterhead project was one of seven  UK CCS applications to the European Investment Bank for consideration in the EU’s NER  (New Entrant Reserve) scheme to support CCS and renewable energy projects across the EU. Up to three such projects may be supported per Member State. A decision has recently been taken not to proceed with the CCS project proposed for the coal-fired power station at Longannet in Fife, which had been one of the seven UK CCS applications.

Ian Marchant, Chief Executive of SSE, said:  "If long-term targets for reducing emissions are to be met, CCS technology must be applied as widely as possible. We therefore welcomed the Government’s decision to include gas-fired generation plant in its CCS demonstration programme. However, the development of a commercial-scale CCS demonstration project presents significant challenges and will require appropriate levels of support from both the EU and UK government.”

Paul Smith, Managing Director, Generation, of SSE said: "For more than six years, we’ve thought that Peterhead represents the best site in the UK for a gas CCS project.  Our co-operation with Shell strengthens this proposition even further.  Given the work already undertaken, the project can proceed at a pace at least equal to other CCS projects in Europe."

Glen Cayley, Vice President - Technical, Shell U.K. Limited said: “Shell believes CCS is an essential technology in the fight against global climate change and we remain committed to developing CCS in the UK. Valuable work has already been carried out during the Longannet Project – work that will be relevant to the proposed CCS project at Peterhead. Shell’s Goldeneye reservoir offers excellent geological storage conditions in terms of pressure, capacity and availability, and we are set on finding a way to use it as a CO2 sink.”