A new gas plant with carbon capture and storage (CCS) could generate electricity at a lower price than Hinkley Point C, developers have claimed in a new feasibility study.

Summit Power said its Caledonia Clean Energy Project could be built as soon as the early 2020s with a strike price of just £80 to £90/MWh (2012) over a 20-year contract.

By comparison, Hinkley Point C was awarded a 35-year Contract for Difference with a strike price of £92.50MWh.

The developer plans to build a 1.3MW gas plant at Grangemouth near the Firth of Forth, from which 90 per cent of carbon emissions would be captured. The power station would be able to provide a wide range of essential services to the power grid including voltage control, frequency response and black start capability.

Crucially, the plant would also be able to ramp its power output up and down whilst continuing to capture carbon emissions efficiently, providing flexible low-carbon generation to back up intermittent renewables. The firm described this as a “real breakthrough”, as capturing carbon emissions from gas power stations was previously understood to require steady operation.

Project director Stephen Kerr, said: “It’s clear there can’t be any more unabated gas in the UK if we hope to meet climate targets. It’s also clear that we need the flexibility and resilience that the Caledonia plant offers, and which can be delivered at a much lower cost than previously thought possible.”

Kerr told Utility Week the strike price of £80 to £90/MWh incorporates transportation and storage costs of £10 to £20 per tonne of carbon dioxide.

However, achieving these figures would require the socialised development of transportation and storage infrastructure as well as a regulated charging model for its use. The feasibility study says the strike price for the project would otherwise need to be £35/MWh higher.

It also says 95 per cent of the necessary pipeline infrastructure already exists and that installing the remaining 5 per cent would cost around £440 million.

“The existing pipeline system that can transport CO2 to the North Sea gives Scotland a tremendous cost advantage,” added Kerr. “It’s important that we seize this opportunity whilst the pipelines still exist.”

With nearly 80 per cent of Scotland’s industrial sources of carbon emissions located within 40 kilometres of the main transportation pipeline, the study highlights the potential to develop a CCS cluster around Grangemouth, using the Caledonia plant as “anchor” tenant.

Other industrial emitters could connect to the pipeline network as it evolves, and it could eventually enable the production of low-carbon hydrogen for use in the heat and transport sectors.

Summit Power said the study also examined the “exciting” potential to add a “promising” new type of CCS-enabled gas power station based on the Allam cycle, which is being developed by Net Power.

The study was funded by Summit Power as well as the Scottish government and the Department for Business, Energy and Industrial Strategy.

Last month Drax unveiled plans to trial carbon capture and storage on one of three biomass units at its power station in Yorkshire.

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