Facts:

Main developer: 2Co Energy

2Co Energy is progressing well with plans to build and operate a state-of-the-art 900MW integrated gasification combined cycle (IGCC) plant with CCS near Hatfield Colliery in Yorkshire, where about 100 million tonnes of recoverable coal would supply the project.

In January 2012, the company appointed Linklaters and Nabarro as legal advisers for the future development of the project, and BNP Paribas as financial advisers. Soon after, Foster Wheeler was taken on as lead project manager. Then, in March, 2CoEnergy announced that Samsung of South Korea was taking a 15% stake in the project. The deal also saw Samsung  take on the EPC contract.

While the project awaits decisions on EU and UK funding - the latter source still to be launched - a start-up date is uncertain. However, once construction begins, it is expected to take three to four years over two phases - the first phase allowing the plant to operate on natural gas until the second-phase coal gasification island with carbon capture is complete. At this stage, the plant will capture about 5 million tonnes of CO2 per year. The lifespan of the project will require storage of 190 million tonnes of CO2.

2Co Energy acquired Powerfuel plc in May 2011 along with its Hatfield project, which it has since renamed. The takeover company has provided a financial guarantee that enables the project to claim the EEPR grant. The acquisition has also given the project a more solid footing in its submission for funding through the EU's NER 300 scheme.

2Co Energy is now evaluating storage options and EOR in the Central North Sea and National Grid will focus on storage sites in the Southern North Sea.

Other project partners as well as National Grid - which is responsible for transportation and storage elements - are supermajor Shell and Russia's Kuzbassrazrezugol.

Yorkshire Forward/North East CCS transport network

The former Hatfield project was part of the Yorkshire Forward initiative that aims to develop a CCS infrastructure for the Yorkshire and Humber region, tied into CO2 storage within saline aquifers or depleted reservoirs beneath the North Sea. It is in an area designated by the UK government - in 2010 - as the first Low Carbon Economic Area.

CO2Sense, a company set up and owned by Yorkshire Forward, is tasked with developing these plans for an open, shared CO2 transport and storage network for the region. This would provide the transport and storage solution for projects such as Don Valley. See project page for more details.

In November 2011, National Grid unveiled its preferred route for the pipeline that will carry CO2 from the Don Valley Power Project in West Yorkshire to suitable potential storage sites in the North Sea. View the route here.

Financing

In January 2012, 2Co Energy announced it had selected BNP Paribas as financial advisers to guide the development and construction of the project, and help secure further project funding. It estimated project costs at £3 billion for onshore elements and £1 billion offshore. The company also reported its intention to enter the UK government's revamped CCS Competition which, as of early 2012, was yet to be relaunched.

In May 2011, the renamed venture was one of 13 CCS projects submitted to the European Union's NER300 scheme – a €4.5 billion fund to support CCS and renewable projects across the European Union. A final award decision is expected in the second half of 2012. Read ZERO news article.

In December 2009, the project was awarded funding of up to €180 million from the European Commission’s European Energy Programme for Recovery (EEPR). Capital costs to reopen the colliery are estimated at £110 million. Total construction cost of the IGCC plant could be £800 million.

At the end of 2010, original owner Powerfuel plc went into receivership and the project was taken over by 2CoEnergy.

Timing

Foster Wheeler has been selected to lead the project, and will continue as managing consultant until the plant is operational in 2016. The firm will first assist 2CoEnergy in preparing the EPC contract for the project build. Construction is on track to begin in 2013.

Planning consent was granted in 2009, followed by the completion of FEED work and site utilities preparation. Commercial licences and engineering agreements are already in place for key technologies. National Grid completed its assessement of potential storage sites in summer 2010.

The project must still provide necessary reports such as an Environmental Impact Assessment, R&D into the safe operation of the transportation infrastructure, and a comprehensive study of potential CO2 storage sites.

Other Sources and Press Release

Samsung joins project, 2COEnergy PR, March 2012, via press link

Foster Wheeler appointed project manager, February 2012 (go to press releases)

UK CCS contest, news article, 17 January 2012

2Co Energy appoints legal and financial advisers, 16 January 2012

Pipeline route revealed

Department of Energy press release, May 2011

2Co Energy press releases on acquisition and NER 300

Carbon Capture Journal article on NER 300, 8 March 2011

EU's first interim report, February 2011
Hatfield to share 250 million euroes from EU ( March 2009)
EU unveils energy plan (February 2009)
Powerfuel and Shell sign agreement for coal gasification (April 2007)
Coal's Bright Future: Report by Time Magazine (July 2006)

Companies involved

News about Don Valley Power Project