Utility Week

UTILITY Week 2nd May 2014

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UTILITY WEEK | 2nd - 8Th MaY 2014 | 19 Finance & Investment This week White Rose CCS in line for €300m grant north Yorkshire project is sole recipient of European carbon capture and storage funds The White Rose carbon capture and storage (CCS) scheme is set to receive €300 million (£250 million) of European funding by mid-2014. The North Yorkshire project was officially entered for funding last week. It is considered a cer- tainty for the cash because it is the only eligible submission for the European Commission's NER300 competition. Brus- sels originally set out to support up to 12 CCS schemes but failed to identify suitable projects. The grant from Brussels will supplement £1 billion from the UK government to be split between the White Rose and Peterhead schemes. Both schemes are under- going front end engineering and design studies before final investment decisions late next year. White Rose is backed by a consortium of Drax Power, Alstom and BOC. The project consists of a new 426MW coal-fired power station on the Drax site fitted with equipment to capture about 90 per cent of the emissions and pipe them to storage reservoirs under the North Sea. Meanwhile, Peterhead in Aberdeenshire could be the world's first gas-fired CCS plant, if it goes ahead. Peter- head is a joint venture between SSE and Shell. CCS is seen as crucial to cutting carbon emissions because it will allow the continued use of fossil fuels for generation. The Intergovernmental Panel on Climate Change estimates decarbonising without CCS will cost 138 per cent more over the period 2030-50. However, development of the technology has been held up by high costs and a collapsed carbon price. MD EnErgY Green bank's first plant powers up The UK Green Investment Bank's first project, the £13 million TEG Biogas anaerobic digestion plant in Dagenham, London, is generating electricity. The plant – which was opened by business secretary Vince Cable – was completed on time and on budget, and is London's first commercial-scale anaerobic digestion and com- posting facility. It will produce 1.4MW of electricity a year. Residual heat produced by the plant, about 1.15MW, will be used by a neighbouring plastic bottle recycling facility. In 2012, the UK Waste Resources and Energy Invest- ments fund, in which UK GIB is a cornerstone investor, invested £2 million in the project. The Foresight Environmental Fund led the project with a £9 million investment, and the remain- ing £2 million was provided by private sector investors. Shaun Kingsbury, UK GIB chief executive, said: "The project is an important first for London and provides a positive demonstration of a fully integrated renewable energy and waste management project. Waste, which could have been sent to landfill, is now being used to create renewable energy and heat as well as compost and digestate for agriculture." Vince Cable added: "This plant provides a cutting edge, environmentally friendly way to manage London's waste and generate power." gas Mild winter hits GDF Suez Q1 profits First-quarter profits at GDF Suez were hit by reduced demand for gas during a mild winter across Europe, its results statement showed on Monday. The French energy group took revenues of €22.8 billion (£18.8 billion) in the three months to 31 March 2014, down 5.9 per cent on the same period last year. Earnings before interest, tax, depreciation and amortisation fell 14.8 per cent to €4.2 billion (£3.5 billion), broadly in line with analysts' expectations. The group's Energy UK- Europe business, the largest independent power generator in the UK by capacity, took €840 million in revenues, down 19.4 per cent on the previous year. It attributed the drop to a "portfolio optimisation pro- gramme" in continental Europe and reduced sales in the UK. As part of a strategy to become a "leader in the energy transition in Europe", the com- pany bought UK wind energy developer West Coast Energy in March. The two companies had been working to develop wind projects since 2008. White Rose: almost certain to get EU funding drax shares dropped 13.5 per cent on 23 april after a setback to its biomass conversion plans (see analysis, p15). More than £400 million was wiped off its value. The coal generator was expecting to win an early Cfd to convert two burners to biomass, but the government approved only one. The other is eligible for support under the old rO regime, but that is expected to bring in about £10/MWh less. drax is mounting a legal challenge to the decision. Stock watch Drax Group share price, 31 March - 28 april Drax Group share price, april 23-29 780 760 740 720 660 640 680 700 31 Mar 7 Apr 14 Apr 21 Apr 28 Apr 700 690 680 670 660 650 23 Apr 24 Apr 25 Apr 28 Apr 29 Apr

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