Interest in power plant but funding concerns arise

A NUMBER of interested parties are in talks with administrators to takeover a major project to develop the UK’s only carbon capture and storage (CCS) power station in Yorkshire, it is understood.

However, the scheme’s long-term future has been dealt a further blow after the Government said it would not prioritise the scheme for further European Union funding.

The scheme has already received £150m in EU funding but new guidance released by the Department for Energy and Climate Change states that CCS schemes less than half the size of the one proposed at Hatfield, near Doncaster, will receive priority for future EU funding.

This could put in jeopardy plans by groups looking to takeover the project and buy out Powerfuel.

TheBusinessDesk.com reported last week that Powerfuel, the Doncaster-based parent company of Powerfuel Mining and Powerfuel Power, had been placed in administration.

Powerfuel Mining owns Hatfield Colliery, while power generation company Powerfuel Power won the bid last year to build a coal-fired power station which will use carbon capture and storage technology (CCS), a process of burying climate-warming gases.

Richard Fleming and Brian Green of KPMG have been appointed joint administrators of Powerfuel.

Neither Powerfuel Mining or Powerfuel Power are in administration and none of the 380 staff employed at the mine have been made redundant.

However, the administrators warned that significant funding shortfalls exist on both projects although they hope to find buyers.

The CCS project is £635m short of the investment needed to take it forward.