“Show us the money” says Alstom after Scottish Power’s Longannet CCS project collapses

French power OEM Alstom wants part of a £1 billion UK Government pot to fund carbon capture and storage (CCS) projects for its proposed 426 MW oxyfuel project at Drax power station after Scottish Power’s Longannet project collapsed.

On 19 October the UK’s Department of Energy and Climate Change (DECC) announced Scottish Power’s £1 billion scheme to build a 300 MW demonstration unit at the 2400 MW Longannet coal fired power plant had collapsed after the utility demanded an additional £500 million to secure 100 per cent project financing. Energy secretary Chris Huhne said: “A decision has been made not to proceed with Longannet but to pursue other projects. One billion pounds will be available for a new process and we are expecting a number of promising bids from both Scotland and England.”

Philippe Paelinck, Alstom’s director of CO2 business development, told Millicent Media that DECC should consider investing in its planned stand-alone 426 MW oxy-fired CCS plant at Drax’s 4 GW coal plant site at Selby, North Yorkshire.  As part of the project National Grid and an offshore partner would develop a transmission system out to the southern North Sea where the CO2 would be stored permanently.

“The UK government should give us the money from the Longannet plant so we can build the Drax project,” he said. “We are ready to go. Longannet was looking for 100 per cent financing and Scottish Power is worried about its coal assets,” he said.

Paelinck said the collapse of the Longannet project was symptomatic of the parlous state of European utilities’ balance sheets. “It is a sign of the current weakness of European utilities. It is increasingly difficult for European utilities to make such bold investment decisions. Their business model has been chewed up by all kinds of measures like nuclear phase-outs, increased penetration of renewables, carbon taxes and so forth. It is not a good climate to make big investment decisions [for CCS].”

The Alstom executive remains optimistic about the prospects for CCS despite the latest setback. “I am not worried about CCS being pushed out in favour of cheaper alternatives, ” he said.

“From our discussions with DECC we see a strong will to decarbonize the power sector and I do not see their stamina sapping. We are having some confidential discussions with utility customers about retrofitting a full-size power plant with CCS and we may see some new projects popping up in the coming months.”