They are the Peterhead Project in Aberdeenshire, Scotland involving Shell and SSE, and the White Rose Project in Yorkshire, involving Alstom, Drax Power, BOC, and National Grid.
These projects will now enter discussions with the government to agree terms by the summer over Front End Engineering Design studies (FFED), which will last about 18 months.
A final investment decision will be made by the government in early 2015 on the construction of up to two projects.
Energy secretary Ed Davey said: “We will now be working swiftly to progress our preferred two, while making sure we continue to provide the best possible value to taxpayers.”
The Peterhead Project will capture 85 per cent of the carbon dioxide produced from part of the existing gas-fired plant at Peterhead, before transporting it and storing it in a depleted gas field beneath the North Sea.
The White Rose project will capture 90 per cent of CO2 from a new ‘super-efficient’ coal-fired plant at Drax before transporting it and storing it in a saline aquifer under the North Sea.
Jim Ward, National Grid’s head of CCS, said they were “delighted to be through top the next stage of the competition, adding: “Successful development of this innovative technology will help ensure security of supply and help maintain an essential energy mix.”
The two projects that were not named as the preferred bidders – the Captain Clean Energy Project in Grangemouth, Scotland, and the Teeside Low Carbon Project – will be kept on a reserve list in case one or both of the other projects fail to agree a FEED contract by the summer.