Isra-Mart srl:Nine UK applications filed for European CCS funding

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The Department of Energy and Climate Change (DECC) has confirmed that nine applications for EU funding have been submitted by UK carbon capture and storage (CCS) projects in time for this week's deadline.

Scottish and Southern Energy (SSE) and Peel Energy have already publicly announced their bid for a share of the NER300 funding – a €4.4bn pot earmarked to help support CCS and renewable energy projects.

Drax has also submitted a bid alongside French company Alstom for a 426MW demonstration project at its Selby site, and Powerfuel Plc, despite going into administration in December, confirmed it had applied for a further tranche of funds.

The project at Hatfield, Yorkshire, has already won €180m of European Commission funding, but according to its administrators KPMG, it requires a further £653m pounds to complete the project.

The remainder of bidders are as yet unknown, although a DECC spokesman said that a more detailed announcement would be made next week.

News agency Reuters reported yesterday that E.ON, RWE npower and EDF Energy are all likely to have tabled bids for a share of the EU funding.

E.ON shelved its UK CCS project blaming a lack of support from the government's £1bn CCS competition, the second round of which could provide an additional source of funding for up to three of the projects submitted this week.

Jeff Chapman, chief executive of the Carbon Capture and Storage Association (CCSA), said the applications were an important step forward for the UK's emerging CCS industry.

"The news that DECC has received nine proposals for NER300 funding is very positive and reflects the interest in investing in CCS technology in the UK," he said. "The NER300 funding is vital for the development of CCS and will be important to help the UK become established in this field."

The European Commission expects around eight projects to be funded through the sale of 300 million EU Allowance (EUAs) carbon credits from the EU Emissions Trading Scheme's (EU ETS) New Entrants' Reserve, hence NER300.

At current market prices, this is expected to raise €4.4bn, but the commission has said the fund could rise to €9bn with contributions from member states and the companies involved.