Energy Solution Faces Economic Obstacles
By STANLEY REED
Published: November 28, 2012
LONDON — Until last month, the Don Valley Power Project in northeast England looked like a winner. In July it topped a shortlist for a share of as much as €1.5 billion in E.U. funding for innovative low-carbon electricity schemes.

But then came a blow. When the British government published its own selection of potential recipients of a slice of £1 billion, or $1.6 billion, in funding in a national competition for carbon capture and storage projects Oct. 30, Don Valley was left off. That means it is not eligible for a share of the E.U. money — equivalent to $2 billion — either.
The government is not commenting on why Don Valley lost out, but a key reason appears to be its hefty £5 billion capital cost.
Don Valley looked well conceived. The plant would burn coal — normally a huge polluter — but 90 percent of the carbon dioxide would be removed and piped 250 miles, or 400 kilometers, to the North Sea. There the company would inject the gas into two oil fields to assist recovery of oil, helping to offset the expense. But the program cannot go ahead without the support of the British government, the project’s sponsor, 2CO Energy said.
Carbon capture and storage could be a boon for the gas and power industry because — if plants could be built economically — it offers a way to use fossil fuels like coal and gas to generate electricity for decades while also meeting greenhouse gas targets. But today, building a gas or coal-fired power station equipped with carbon capture apparatus roughly doubles the cost. That is a big problem now, especially in Europe, which is paring back its commitment to green energy.
“I think it is very difficult to see how currently governments can make a firm enough commitment financially to allow these things to go ahead,” said Howard V. Rogers,