Government ‘putting its money where its mouth is' with £200m for Acorn scheme
The UK Government is 'putting its money where its mouth is', Energy Secretary Ed Miliband said as it was revealed £200 million is being made available for a carbon capture project in Scotland.
Ministers confirmed they are meeting in full the request for development funding for the Acorn project in Aberdeenshire – the first time a government has provided funding of this scale for such a project to proceed.
The scheme, which proposes storing emissions from across Scotland under the North Sea, had previously been overlooked for support despite repeated calls from the Scottish Government and others for it to be backed.
With the UK Government also pledging to support the Viking carbon capture and storage (CCS) project in the Humber, Mr Miliband insisted the two schemes will 'support industrial renewal' with 'thousands of highly skilled jobs'.
According to the sector, Acorn could support about 15,000 jobs at its peak, with up to 20,000 jobs at the Viking project.
As it develops, it is planned the Acorn site will link up with the former oil refinery at Grangemouth via more than 200 miles of pipelines.
An existing 175 miles of gas pipes will be repurposed for this, with 35 miles of new pipeline also being built, allowing CO2 from the Grangemouth site to be transported to Acorn's storage facilities under the North Sea. The move is seen by many as being key in securing a future for the facility, where some 400 workers were recently made redundant.
Speaking as he visited the site near Peterhead, Aberdeenshire, Mr Miliband said: 'This Government is putting its money where its mouth is and backing the trailblazing Acorn and Viking CCS projects.
'This will support industrial renewal in Scotland and the Humber with thousands of highly-skilled jobs at good wages to build Britain's clean energy future.
'Carbon capture will make working people in Britain's hard-working communities better off, breathing new life into their towns and cities and reindustrialising the country through our Plan for Change.'
Mr Miliband visited the site the day after Rachel Reeves promised funding for Acorn in her spending review – although the Chancellor did not put a figure on how much support would be given in her statement to MPs.
Scottish Secretary Ian Murray said afterwards: 'The £200 million funding confirmed for the Acorn carbon capture project will help to support the design and preparation as it continues to progress.
'This is about revitalising our industrial communities and creating long-term economic opportunities for Scottish workers.'
Tim Stedman, chief executive of Storegga, the lead developer of Acorn, said: 'We warmly welcome the UK Government's support for the Acorn project and the commitment to development funding that will enable the critical work needed to reach final investment decision.'
He added the 'milestone' is 'key not only for Acorn but for establishing Scotland's essential CCS infrastructure needed to grow and scale the UK's wider carbon capture and storage industry'.
Mr Stedman continued: 'We look forward to working with Government in the months ahead to understand the details of today's commitment, and to ensure the policy, regulatory and funding frameworks are in place to build and grow a world-leading UK CCS sector.'
Graeme Davies, executive vice-president at Harbour Energy, which is leading the Viking project, said the commitment in the spending review 'sends a strong signal' that the project is 'an infrastructure-led economic growth priority' for the Parliament.
He added: 'We will work with Government on the critical steps needed to progress Viking CCS towards a final investment decision.'
However climate campaigners at Friends of the Earth said the money should instead be invested in public transport, energy efficiency and measures to support oil workers to transition to jobs in the renewables sector.
Caroline Rance, head of campaigns at Friends of the Earth Scotland, said: 'This is an enormous handout of supposedly scarce public money that will only directly benefit greedy oil and gas companies.
'Politicians are paying hundreds of millions to keep us locked into an unaffordable energy system which is reliant on fossil fuels and is destroying the climate.
'Carbon capture technology has 50 years of failure behind it, so businesses, workers and the public are being sold a lie about its role in their future.
'Building new fossil fuel infrastructure will undermine the energy transition and embolden oil firms to keep on drilling in the North Sea.
'Both the UK and Scottish governments should instead be backing climate solutions that can improve people's lives such as upgrading public transport, ensuring people live in warm homes and creating green jobs for the long-term.'
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