RWE npower buys into UK carbon capture competition

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RWE npower has bought its way back into the UK competition to demonstrate carbon capture and storage technology with a 300-400MW coal-fired power station. 

The company, which was not included in a shortlist of three consortia for the government’s competition earlier this year, has bought a 75% stake in the Peel Energy group that was shortlisted.

The group, which also includes Danish firm DONG Energy, have now announced a joint venture partnership to set up a new “cleaner supercritical coal-fired power station” by 2014.

It is proposing to transport captured carbon from the plant to disused gas fields in the North Sea.

As with all the projects within the UK demonstration project, the group must use “post-combustion” technology to capture 90% of the greenhouse gases from the coal plant. This technology involves carbon dioxide being scrubbed from the emissions after coal has been burned to generate energy.

The UK competition currently has the Peel group shortlisted along with proposals from E.ON for a plant at Kingsnorth, Kent, and ScottishPower, which is bidding to develop a plant at Longannet, Fife. It is thought the successful bidder could gain as much as £1 billion of public funding to support a 300MW to 400MW plant.

RWE npower
German-owned RWE, which had been considering legal action to force the government to include it within the CCS competition, has already commissioned a test facility at its Didcot coal plant in Oxfordshire to look at post-combustion CCS.

The firm is due to begin construction of a CCS pilot plant at its Aberthaw coal-fired power station in Wales next year, which is scheduled to be completed in 2010.
RWE npower chief executive Andrew Duff said: “Energy companies cannot commit to commercial investment in CCS on a new power station until the technology is proven and seen to be economically feasible.

“This could be a major barrier to the construction of much needed new build power plant and so this project is vital to unblocking the potential for coal to play its part in the UK’s long term energy mix.”

Npower said “clean” coal generation was “vital” for energy security, affordability and to tackle the environmental impact of energy in the UK as older power stations close.

The firm also pointed out that the development of the technology at an industrial scale could see the UK industry exporting its expertise abroad.

DONG
Danish state-owned DONG Energy also has CCS experience already, through its CCS pilot plant at the 400MW Esbjerg power plant on Denmark’s North Sea coast. This is Europe’s largest facility to date to capture its carbon dioxide emissions, using solvents to remove the greenhouse gas from the plant’s flue gas since 2005.

Bent Christensen, DONG Energy’s senior vice president, said: “We are looking forward to working with RWE npower as part of this new partnership concerning CCS technology. Our combined expertise and commitment to this technology represent a strong and compelling proposition.”

Mr Christensen said his company was attracted to the UK by its “proactive attitude” towards CCS technology, adding: “Our engineers are developing carbon capture techniques, because we see this as the technology of the future.”

Peel
Peel Energy is part of Manchester-based property and infrastructure company Peel Holdings, and has a development portfolio of 3GW of generation capacity, including a 450MW wind portfolio and a 95MW energy-from-waste plant proposed for Ince in Cheshire. The company also has ambitions to develop a large tidal range project in the Mersey estuary.

The company’s chairman, Owen Michaelson, said DONG Energy and RWE npower were demonstrating confidence in Peel Energy’s bid for the UK CCS competition.

He said: “We are determined to be at the forefront of developing the know-how to capture and permanently store CO2 from coal-fired power stations. We have always seen this as an immense challenge requiring a very strong and wide ranging partnership. We believe we have now created the foundation of that partnership with Dong Energy and RWE npower and we thoroughly look forward to working with them and the government towards a cleaner way of generating energy for future generations.”