The deal paves the way for carbon captured from Powerfuel's proposed 900-megawatt (MW) coal-fired integrated gas combined cycle (IGCC) plant in Hatfield, South Yorkshire, to be stored deep under the seabed. The negotiations between the two companies was facilitated by regional development agency Yorkshire Forward, which is also supporting Viking gas field as the preferred storage site for CO2 captured in the Humber cluster of power companies. Yorkshire and Humber are home to some of the UK's largest power plants, including the 3,900-MW Drax coal-fired plant, which provides about 7% of the nation's electricity.
A few months ago, the UK and Norway announced plans to study how the North Sea can also be used for storing captured CO2.
Powerfuel hoped that the proposed 900-MW Hatfield plant would be shortlisted for a share of the UK government's £1 billion ($1.66 billion) funding for proposed carbon capture and storage (CCS) solutions, but the project was passed over in favour of four other CCS projects.
These include E.ON AG's Kingsnorth coal-fired power plant in Kent and another by Scottish Power at the working coal-fired Longannet power plant in Fife. The government excluded IGCC plants from the CCS programme, which caused an outcry from Yorkshire Forward and others. However, the Hatfield project has been shortlisted for European Union funding.
The plant will require around 2.5 million tonnes of coal per year and will be capable of capturing more than 5 million tonnes of CO2 annually. The CO2 will be sent by pipeline to an offshore site. The Hatfield plan is part of a greater scheme for the region envisioned by Yorkshire Forward and a number of key energy players, including Corus, Scottish and Southern Energy plc, Corus Group plc, ConocoPhillips, E.ON UK, and Drax Group plc.
The area has put forward a scheme to link 18 power stations and industrial sites in the region of Yorkshire and Humber via a network, capture the CO2 emissions, liquefy them and then pump them to depleted gas fields under the North Sea. Yorkshire Forward put the cost of developing the network at around £2 billion ($3.31 billion) and said that 60 million of the 90 million tonnes of carbon emissions created in the region each year could be captured and sequestered in this way.
E.ON has already suggested the depleted Hewett gas field as a potential carbon site for carbon emissions captured at the Kingsnorth facility and has held negotiations with Italian owner, gas giant ENI SpA. Suggestions have been made to construct a pipeline network in the Thames and Medway Estuaries that would capture, transport and store up to 85% of carbon emissions the region, which is home to nine major power plants, including Kingsnorth and Tilbury B, which currently emit a total of 30 million tonnes of carbon dioxide per year.