Utility Week

Utility Week 13th December 2013

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/226329

Contents of this Issue


Page 22 of 33

Finance & Investment This week 'Tens of millions' will pay for feasibility study into £2 billion project to sequester Drax emissions White Rose CCS gets funds from Decc T he White Rose carbon capture and storage (CCS) project has been allocated funds under a £1 billion commercialisation programme, the government said on Monday. The £2 billion project, which will take emissions from a new CCS: a 'greener future' for UK coal plants? 426MW coal plant at Drax, North Yorkshire, and pipe them to be stored under the North Sea, is the first to be approved for a UK government grant. The Department of Energy and Climate Change would not reveal the size of the initial grant because negotiations are continuing on another project, the Peterhead scheme in Aberdeenshire. A spokesperson said the sum, which will pay for a full feasibility study, was "in the tens of millions". The announcement came as energy secretary Ed Davey officially opened the biomass conversion at Drax, another plank of the "greener future" for UK coal plants. Power generation with CCS is also expected to be eligible for support under Electricity Market Reform. Luke Warren, chief executive of the CCS Association, said: "This is a major step forward for the White Rose project and we also anticipate a positive announcement on the Peterhead CCS project in the near future. "These commercial-scale CCS projects will show that fossil-fuel power stations can continue to contribute to a secure and affordable electricity system without compromising our climate change goals." MD Stock watch Centrica shares closed at 329.4 pence last Friday, the lowest for a year and down from a high of 402.2 in September. There were some positives in the Autumn Statement. Centrica's 25 per cent stake in Cuadrilla's Bowland shale gas licences will get tax breaks and British Gas was granted a slackening of its Energy Company Obligation targets. However, the chancellor did nothing to alleviate the uncertain investment climate and Race Bank offshore windfarm hangs in the balance. Renewables Five offshore wind projects turned down for subsidy Nearly half the offshore wind projects seeking pre-approval for subsidies were knocked back last week. Of the 12 offshore developments applying for the government's Final Investment Decision Enabling programme, seven have been approved for the next stage. SSE's Beatrice windfarm was the only majority UK-owned scheme to get through. The other successful projects were backed by Danish, Norwegian, Spanish and Irish companies. Centrica's £2 billion Race Bank array failed to make the grade. That setback followed news that the "strike price" for offshore wind would drop less steeply than planned, to £140/MWh in 2018/19, instead of £135/MWh. The offshore boost is funded by a £5/MWh cut across the board for onshore wind and solar. Onshore wind will get £95/MWh in 2014/15, falling to £90/MWh in 2018/19; while large scale photovoltaics receives £120/MWh, falling to £100/MWh. Green groups hailed the onshore cuts as evidence that renewables can compete on cost with fossil fuels and nuclear. Centrica share price, 4 - 10 December The Solar Trade Association said its members would have accepted even deeper cuts in the medium term. Chief executive Paul Barwell suggested that the government was trying to "spare nuclear's blushes" by giving solar a higher strike price. Nuclear Wylfa Newydd in the running for state support The government is paving the way to support a second new nuclear power station, it announced on Wednesday. In line with plans to underwrite finance for EDF Energy's Hinkley Point C, the government is set to offer a guarantee to the proposed Wylfa plant in north Wales. At the launch of its National Infrastructure Plan, the Treasury said it has entered a "co- peration agreement" with o Hitachi and Horizon to support the financing of "Wylfa Newydd". However, the project is still in early stages and the government is not aiming to agree an in-principle guarantee until the end of 2016. According to the National Infrastructure Plan, there are 275 energy infrastructure projects worth £219 billion in the pipeline. Centrica share price, 10 September - 6 December 336 400 334 390 332 380 370 330 360 350 328 340 326 4 Dec 330 5 Dec 6 Dec 9 Dec 10 Dec 16 Sep 7 Oct 28 Oct 18 Nov 6 Dec UTILITY WEEK | 13th -19th December 2013 | 21

Articles in this issue

Archives of this issue

view archives of Utility Week - Utility Week 13th December 2013