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A “multi-million pound” contract has been awarded by the government to the Peterhead project for it to become the first commercial scale gas carbon capture and storage (CCS) plant.
The CCS project, a joint venture between Shell and SSE in Aberdeenshire, becomes the second power station after the White Rose coal CCS project in Yorkshire, to be awarded government funding for a front end engineering and design (Feed) study.
The Feed study will see detailed engineering and planning processes completed before a final decision is made on whether either of the CCS projects will move forward to the construction phase.
Energy secretary Ed Davey said: “This project envisions a cleaner, greener future for the North Sea and will support thousands of green jobs.”
Davey was accompanied by prime minister David Cameron and the deputy prime minister Nick Clegg at the signing of the contract.
Clegg said: “Today’s multi-million pound deal with Shell will help to safeguard thousands of jobs and power half a million homes with clean electricity.
“It shows we can build a stronger economy and do it fairly by protecting our environment for future generations.”
Labour welcomed the announcement, and shadow energy minister Tom Greatrex said “after months of delay” the signing of the Feed study contract is “a welcome step in the right direction”.
He added it is “vital” that the contracts for difference investment mechanism “works for CCS” and that “the government must demonstrate their commitment to CCS with real leadership and engagement or risk losing the UK’s lead in this technology”.
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