Peel Energy subsidiary Ayrshire Power forms consortium to develop plans for carbon capture and storage elements of proposed 1852-MWe coal- and biomass- fueled power station at Hunterston, Scotland

Audrey Dixon

MANCHESTER, England , December 15, 2011 (press release) – Ayrshire Power Ltd (APL) has today announced the formation of a consortium to develop its plans for the Carbon Capture and Storage (CCS) elements of its proposed new multi-fuel power station at Hunterston, North Ayrshire, Scotland.

The consortium brings APL together with leading carbon capture and power solutions provider Doosan Power Systems, engineering and construction company, Fluor Limited and Petrofac, a leading international provider of facilities solutions to the oil, gas and energy industries.

The proposed power station facility would burn both coal and biomass and use highly efficient modern technology with strict emissions control.

Doosan Power Systems is a leading provider of carbon capture solutions for coal and gas power plants. The company has major R&D and carbon capture test facilities at its site in Renfrew, Scotland and will design, build and commission the carbon capture plant.

Fluor Limited, the UK operating arm of Fluor Corporation, provides solutions for a wide range of challenging energy projects worldwide including onshore and subsea pipeline projects and will deliver engineering services relating to the CO2 pipeline which will be used to transport CO2 to the East Irish Sea where it will be stored in depleted natural gas reservoirs.

Petrofac, through its subsidiary CCS co-investment business, CO2DeepStore, is developing concepts for the storage of CO2 in the East Irish Sea, in conjunction with Peel Energy CCS. Depleted gas fields in the East Irish Sea could be used to store CO2 from Hunterston and other emissions sources, in a future North West England regional CCS cluster development.

Muir Miller, project director at Ayrshire Power, commented:

“We have now been able to put in place a consortium of companies with unrivalled expertise and a track record of delivering projects of this scale and complexity.

“The wealth of experience and technical ability which our new partners will bring to the development, in particular in the provision of the key components of CCS technology, will be of huge importance in helping us to deliver what is an enormously challenging project and one which will see Scotland leading the way in developing a truly sustainable approach to meeting the UK’s energy needs.

“Following the formation of the new consortium we are currently developing our bid for funding support for the CCS elements of the Hunterston project through both the European Union (EU) and the Department of Energy and Climate Change (DECC) under the NER300 and UK CCS Demonstration funding competitions.

“In early November the EU opened a competition for CCS and renewable energy project sponsors across Member States to bid for funding support from an anticipated €4.5 billion fund. This fund will be used to support up to eight CCS and 34 renewable energy projects across the EU. These CCS projects will demonstrate how CO2 can be safely captured and stored underground as part of the fight against global warming. We anticipate submitting a bid for this funding early in February 2011 and we await further news of DECC’s plans for the next three UK CCS Demonstration projects which the UK Government has confirmed it will support.”

Ayrshire Power’s proposals for a new 1852MWe power station with CCS were submitted to the Scottish Government’s Energy Consents and Deployment Unit in June 2010. The company is currently working closely with all of the key stakeholders including North Ayrshire Council, Scottish Natural Heritage and the Scottish Environment Protection Agency to address the issues raised by the application for consent.

The power station has been designed based on the implementation of CCS technology in line with the latest UK and Scottish Government guidance. Using the latest supercritical power station technology will significantly increase efficiency and thereby reduce coal consumption. Even after allowing for the energy penalty of carbon dioxide capture and compression, the station is expected to be more efficient than any other coal fired power plant in the UK and ultimately will capture 90% of the CO2 produced by the plant.

It is estimated that the new plant could meet the electricity needs of up to 3 million homes. It would create a significant number of jobs in Scotland, including more than 100 professional engineering jobs in Renfrew, around 1,600 construction jobs in North Ayrshire at the peak of the construction phase and approximately 160 on an on-going basis once the plant is up and running. The new plant will require around £100M of CCS equipment, much of which could be procured in Scotland, representing a major opportunity for local suppliers.

Owen Michaelson, Chairman of Peel Energy, said, “Peel Energy’s vision of building a world leading supercritical power station with carbon capture and storage has taken a massive step forward with this announcement, reflecting the hard work and continued determination of our team.

“The Hunterston project represents a fantastic opportunity for Scotland and the UK to lead the way in pioneering the use of CCS, placing it at the forefront of the global drive towards low-carbon generation.

“Sustainability lies at the heart of this project and, by complementing the development of our renewable energy capability, the Ayrshire Power project will play a vital role in meeting the country’s energy needs using technology that can benefit the whole world.

“The world-class nature of the team we have been able to assemble in order to take this development forward is, in itself, a massive vote of confidence in our plans and will be instrumental in helping us achieve our objectives.”

Jean-Michel Aubertin, CEO of Doosan Power Systems, said, “We are delighted by our selection in the consortium. Building on our already significant investment and research in CCS pilot projects, the Hunterston project has the potential to become a new flagship carbon capture project. It is an additional reference that will help us grow our CCS business, hence building the foundation for continuing economic benefit in Scotland.”

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