Drax's White Rose project will be built next to its existing power station in Selby

Drax wins €300m EU grant for carbon capture plant

British utility Drax has won a €300m EU grant to develop technology to bury carbon emissions from a new coal-fired power plant.

The money will go towards Drax's White Rose project to build a 450MW coal-fired plant next to its existing power station in Selby, North Yorkshire, which will have the 1.8 million tonnes of CO2 it produces annually captured and pumped into a depleted gas field in the North Sea.

The utility will receive the cash under an EU scheme to fund renewable energy and other initiatives to help cut greenhouse gas emissions, potentially making it Europe's first commercial-scale carbon capture and storage (CCS) facility.

"White Rose will create thousands of green, local jobs and make a real difference to cutting carbon emissions," British Energy and Climate Change Secretary Edward Davey said in a statement.

"And as a world leader in the technology, as carbon capture and storage is commercialised Britain will be in first place to export this knowledge to a de-carbonising global economy."

EU Climate Action Commissioner Connie Hedegaard said the 28-nation bloc would award a total of €1bn to 19 projects in 12 member states, including a geothermal power plant in Croatia and a concentrated solar power project in Cyprus.

"With these first-of-a-kind projects, we will help protect the climate and make Europe less energy dependent," Hedegaard told reporters in Brussels, adding that the €1bn would leverage additional investment from the private sector of €900m. "This is a contribution to reducing Europe's energy bill of more than €1bn per day that we pay for our imported fossil fuels."

Funds for the so-called NER300 programme were raised through the sale of 300 million carbon allowances under the EU's Emissions Trading System between 2011 and 2014 – a reserve of permits that had been set aside for new entrants in the scheme.

The Commission, the EU's executive arm, raised more than €2bn, with around €1bn of that going to 20 renewable energy projects since late 2012.

No CCS plants received cash during the first round of NER300 funding because they all withdrew from the competition due to a lack of government support, but Drax won cash in the second round after Britain last December announced £1bn in support for CCS projects.

"(Tuesday's) decision sends a strong and positive signal, reaffirming the importance of CCS deployment and that we must keep pushing European projects with the continued support both at EU and member state level," said Graeme Sweeney, chairman of Zero Emissions Platform (ZEP).

Brussels-based ZEP is a coalition of European utilities, oil companies, scientists, academics and environmental campaigners working together to advance CCS technology.

While some have called CCS a "silver bullet" in the fight against climate change, others say it is costly, has significant risks, and has not yet been proven on a large scale.

The Commission said Drax's CCS project, which is expected to capture 90 per cent of the new plant's emissions, will reduce greenhouse gases by an amount equivalent to taking more than a million cars off the road.

It added that the 19 projects selected in the latest round of NER300 funding could raise EU renewable energy production by around 8,000 gigawatt-hours, equal to the combined annual electricity consumption of Cyprus and Malta.

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