In our last blog CCS Autumn Update | Brodies LLP, we discussed the Government's plan to invest £21.7 billion in carbon capture and storage (CCS) projects in England over the next 25 years. The Government confirmed that the funding would be rolled out as subsidies for the development of new CCS clusters in Teesside and Merseyside to help the UK achieve its climate goals.
On the 10th of December 2024, in a monumental development for the CCS sector, two projects in the East Coast Cluster have been given the go ahead by Regulators, with the North Sea Transition Authority (NSTA) awarding the UK's first ever carbon storage permit. The announcement is a pivotal milestone in accelerating CCS deployment and has been hailed as a 'historic moment' on the UK's journey to achieving net zero.
The East Coast CCS Cluster:
The East Coast Cluster, also known as Endurance, was named as one of the two locations in the Government's Track-1 CCS Cluster back in 2021 and is now the first UK location to be awarded a carbon storage permit. This allows the project partners to progress to the 'Execution Phase' on two of the UK's first carbon capture, transport and storage projects in Teesside; the Northern Endurance Partnership (NEP) and Net Zero Teeside Power (NZT Power).
The Northern Endurance Partnership:
NEP, a joint venture between BP, Equinor and TotalEnergies, will transport and store up to 4 million tonnes of carbon dioxide emissions from the Teesside projects initially, with increasing storage capacity as the East Coast Cluster expands. The project is thought to be critical in helping to reach the UK's target of achieving 20-30 Mtpa of CCS by 2030 and 50 Mtpa by 2035.
Net Zero Teesside Power:
A second project within the same cluster, NZT Power, has also been given the go ahead by the NSTA. The project, a joint venture between BP and Equinor, is a gas-fired power station with CCS facilities and is hoped to produce up to 742 megawatts of decarbonised power. Up to 2 million tonnes of carbon dioxide would be captured at the plant per year before being transported and stored securely by NEP in subsea storage beneath the North Sea to prevent it being released into the atmosphere.
The route to the Execution Phase:
Prior to being granted the permit and entering the Execution Phase of the projects, the project partners had to satisfy the NSTA that the site was eligible for permit. This included demonstrating that:
- the site and storage complex are suitable for carbon storage purposes; and
- the site poses no significant risk of leakage and there is no significant risk of harm to human health or the environment; and
- the partners have evidenced that they satisfy the required standards and guidelines for technical competence and professional standards and have evidenced financial security.
The permit was awarded alongside an economic licence granted by the Department for Energy Security and Net Zero (DESNZ) to Net Zero North Sea Storage Limited, NEP's incorporated joint venture vehicle. The granting of the permit and economic licence allows the project partners to progress to the Execution Phase of the project, which includes carrying out any necessary activities such as the development and construction of infrastructure to allow for first injection to be achieved. It is anticipated that construction for the NEP project will begin in mid-2025 with a proposed start-up date from 2028.
In addition to helping the UK deliver on its environmental targets, the projects are a key component to securing further growth in the UK's CCS sector by unlocking around £4bn worth of contracts and around 2,000 jobs to the north-east of England.
Future of CCS:
As we discussed in our CCS Autumn Update, there has been no further announcements made in respect of the Track-2 CCS Cluster projects; Acorn and Viking, and importantly, whether these projects will receive similar Governmental support.
However, it is anticipated that the granting of the East Coast CCS Cluster permit will get the ball rolling and encourage further permits with the NSTA indicating that it "hoped that dozens of storage sites could be permitted every year." With such pivotal milestones being achieved in relation to the Track-1 cluster, it is hoped we will see similar progress in respect of the Track-2 cluster on the horizon in 2025.
