Four schemes have been shortlisted for a £1bn competition to develop technology to capture and permanently store emissions from fossil fuel power plants.
Plans for new coal-powered stations with carbon capture and storage at Grangemouth, Scotland, and Drax, North Yorkshire, a coal-powered project on Teesside and a bid to fit the technology onto an existing gas plant at Peterhead, Scotland, are on the shortlist, the Department of Energy and Climate Change said.
The £1bn government competition had to be relaunched earlier this year after previous plans for the technology at ScottishPower's coal plant at Longannet, Fife, were abandoned.
Ministers are depending on getting the technology working at scale as a major part of decarbonising electricity generation by 2030 in order to meet targets to tackle climate change.
It is hoped carbon capture and storage will be able to capture up to 90 per cent of carbon emissions from fossil fuel power stations and store them underground in places such as old oil fields so they do not pollute the atmosphere.
Energy and Climate Change Secretary Ed Davey said: "The projects we have chosen to take forward have all shown that they have the potential to kick-start the creation of a new CCS industry in the UK, but further discussions are needed to ensure we deliver value-for-money for taxpayers.
"Today's announcement is an important step towards an exciting new industry, one that could help us reduce our carbon emissions and create thousands of jobs."
Three of the shortlisted bids have also applied for European Commission funding to develop carbon capture and storage, with the Commission making a final decision on whether to support a UK project by the end of the year.
The four projects are:
- The Captain Clean Energy project, a proposal for a 570 megawatt power plant converting coal into gas in Grangemouth, Scotland, with storage in an offshore depleted gas field, led by Summit Power and involving Petrofac, National Grid and Siemens.
- Teesside Low Carbon project, another coal gasification project, with carbon emissions stored in a depleted oil field and a saltwater aquifer, led by Progressive Energy and involving GDF Suez, Premier Oil and BOC.
- Retro-fitting a 340 megawatt carbon capture scheme to part of an existing 1,180 megawatt gas power station at Peterhead, Scotland, led by Shell and SSE.
- White Rose project at a proposed new 304 megawatt coal-fired power station at the Drax site in North Yorkshire, led by Alstom and involving Drax, BOC and National Grid.
The bids were chosen from eight submitted. The four shortlisted schemes will be in negotiation with the government before a decision on which projects to support further is taken in the new year, Decc said.