PLANS for a pioneering carbon capture and storage (CCS) development in Scotland may be set to advance after the UK Government provided backing which it is thought could help unlock £3 billion investment.
The £30m Government funding will support work on a project that will involve pumping carbon dioxide from Peterhead for storage in depleted North Sea reservoirs.
Champions of the Acorn project believe it could play a significant role in helping the UK to meet its net zero commitments.
READ MORE: Scotland has a lot riding on a small company's work amid climate emergency
The facilities that are in planning could form part of a wider network that would be used to handle emissions from industries across Scotland, and in the production of hydrogen fuel.
Work on Acorn is being led by Banchory-based Pale Blue Dot Energy, which has played a pioneering role in the sector.
The potential importance of Acorn was recognised last year when a range of overseas investors, including Australian investment bank Macquarie and Singapore’s Sovereign Wealth fund GIC acquired interests in Pale Blue Dot, through a new venture called Storrega Geotechnologies.
Storrega chief executive Nick Cooper said the £30m funding provided for the Scottish Net Zero Infrastructure programme was a further endorsement of the broader Acorn Project.
He said: “This funding will support a range of projects to progress Scotland’s low carbon infrastructure including the detailed engineering required to move Acorn CCS and Hydrogen through to final investment decisions. This is an important investment to ensure that this CCS infrastructure is operational by the mid-2020s.”
Other organisations will get some of the £30m funding, including energy giant SSE, the University of Strathclyde and oil services firm Petrofac.
SSE plans to develop a new power station at Peterhead with CCS technology to handle emissions.
The Government awarded £171m in total for work on nine projects, including schemes on Teesside and Humberside.
Work in areas such as carbon capture and renewables could provide a boost for the hard-pressed North Sea supply chain. Oil and gas firms have slashed spending in the area amid the pandemic.
READ MORE: Why are North Sea oil and gas assets suddenly in demand among overseas investors?
Derek Leith, Global Oil & Gas Tax Leader at accountancy giant EY said conditions may improve this year.
“With capital expenditure expected to grow modestly in 2021, the oil price recovering with demand growing, vaccine roll-out programmes and global economies emerging from lockdowns, the stage is being set for a broader industry recovery,” he said.
However, EY said the North Sea oilfield services sector’s future will be shaped by diversification and decarbonisation.
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