Don Valley Power Project

Brief description:

Red Marker Don Valley Power Project

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Capture Method:
Pre-combustion
Capture Technology:
Capital cost:
Financial support:
finsup
--> Volume:
5 million tonnes
53.8330807127 0.85693359375



Facts:


Main developer: 2Co Energy

Country: United Kingdom

Project type: Capture Storage

Scale: Large

Status: Feed study

Year of operation 2015-16
Industry: Coal Power Plant


Capture method: Pre-combustion

New or retrofit: New
Transport of CO2 by: none

Storage site:

North Sea offshore field

Type of storage: Not decided

Volume: 5 million tonnes/CO2


 

Proposed power plant

2Co Energy had making steady progress 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. However, the project's future development was in doubt in late 2012, when the project was rejected from the UK Government's CCS Commercialisation Programme shortlist and failed to win support for its NER300 bid for European funding (see 2CO Energy's statement below).

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. An undisclosed South Korean backer came forward in October, potentially offering a further $1.6 billion in return for a stake in the project.

In June 2012, it was announced that specialist gases supplier, BOC, had also acquired a 15% stake in the project and would work with the other partners on the FEED study. BOC's parent company, Linde, will supply air separation units and the technology to capture carbon. In August 2012 a subsidiary of Foster Wheeler was awarded the contract to participate in updating the project's original FEED study.

A start-up date is now 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 late 2012, is nearing a decision. An FID is anticipated in 2013.

In May 2011, the renamed venture was one of 13 CCS projects submitted to the European Union's NER300 scheme – a revised €1.5 billion fund to support CCS and renewable projects across the European Union. The project had been the leading CCS project on the scheme's shortlist but its rejection by the UK government meant it was no longer in the running for NER300 funds.

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

EC decision on NER300 funding, 18 December 2012

Minister defends decision to reject Don Valley from CCS competition, 24 November 2012

Don Valley fails to win UK government backing, 30 October 2012

South Korean utility's stake in Don Valley, 24 October 2012

Foster Wheeler role in FEED update, 28 August 2012

NER300 full interim report, 12 July 2012

BOC takes 15% stake in Don Valley project, 13 June 2012

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)

Contact info


Main developer: 2Co Energy

Companies involved


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