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12 March 2010

E.ON, Scottish Power Win U.K. Funding for Carbon Capture Plant

Source: Bloomberg

March 12 (Bloomberg) -- E.ON AG and Iberdrola SA’s Scottish Power unit won an undisclosed amount of U.K. government funding to study technology that captures carbon dioxide from power plants and pumps it underground.

The utilities will receive the money from a 90 million- pound ($136 million) pot that the government set aside in April 2009, the Department of Energy and Climate Change said today in statement on its Web site. “The precise amounts awarded to E.ON and Scottish Power are commercially confidential,” the department said.

E.ON, Germany’s biggest utility, and Scottish Power are the only remaining contenders in a government competition to develop a demonstration project for carbon-capture and storage, or CCS. RWE AG withdrew on Nov. 9, saying the timetable for the competition didn’t fit in with its coal-development plans.

“This is excellent news for the development of clean coal in the U.K.,” E.ON U.K. Chief Executive Officer Paul Golby said today in an e-mailed statement. “It’s absolutely vital that we get CCS right and it’s especially heartening to see that we’re now getting some real movement here in the U.K.”

E.ON said in October it would delay plans by two or three years for a new coal-fueled electricity plant in Britain near where it proposed to build its carbon-capture pilot project. The utility remains in the competition for funding, it said.

The government wants the winning project to operate for 15 years beginning in 2014. Coal-fired power stations and other fossil-fuel plants emit carbon dioxide, a gas blamed for global warming.

“The real work of finally making CCS a commercial reality begins today as this funding will now enable Scottish Power to take the technology from the concept to design the stage,” Scottish Power Chief Executive Officer Nick Horler said today in a statement. “It will tell us exactly what we need to know so that we can quickly build this new and essential technology.”

To contact the reporter on this story: Alex Morales in London at [email protected]: To contact the reporter on this story: Kari Lundgren in London at [email protected].