The ScottishPower-led Carbon Capture and Storage Consortium has been selected as one of the final bids in the UK government’s carbon capture and storage competition.

The announcement, made by Ed Miliband, energy and climate change secretary, marks the start of a detailed 12-month design and development study of the ScottishPower-led CCS project.

ScottishPower’s chief executive, Nick Horler, said: ‘The real work of finally making CCS a commercial reality begins today as this funding will now enable ScottishPower to take the technology from the concept to design stage.

‘It will tell us exactly what we need to know so that we can quickly build this new and essential technology. It also puts the UK back at the head of the pack when it comes to delivering full-scale commercial CCS on a global stage.

‘We will deliver our plans to DECC a year from now, putting both us and the UK government in a position to understand exactly what it will take to make CCS a reality by 2014.’

The design and development contract, awarded by DECC will enable engineers from the consortium, which comprises ScottishPower, National Grid and Shell, along with their contracting partners, Aker Clean Carbon and Accenture, to plan what could be the world’s first commercial-scale CCS scheme to be fitted to a coal-fired power plant.

The companies will now be able to fully develop their design and engineering plans as well as cost every aspect of the project.

These studies will be completed in time to submit detailed bids in 12 months. This will enable them to know precisely what it takes to capture and store CO2 from ScottishPower’s power station at Longannet in Fife, Scotland, and transport it hundreds of miles along existing pipelines, so that it can be stored in porous rock formations thousands of metres below the North Sea.

ScottishPower’s bid is based upon a retrofit project at Longannet power station. Last year the company began operating a prototype carbon-capture test unit at the power plant, which will help prove the chemistry of carbon capture and uses the same technology that can be retrofitted by 2014 as part of the government’s CCS competition.

Nick Winser, National Grid’s executive director for Transmission, said: ‘Longannet offers an ideal site for a demonstration project - close not just to the North Sea but to existing National Grid natural gas pipelines that could be reused for CO2 transportation as North Sea supplies decline. This CO2 pipeline could then be available for use by other future CCS projects, making Longannet the founding member of a Scottish CCS cluster.’

Once operational, the capture technology will reduce CO2 emissions by 90 per cent from one 300MW unit at ScottishPower’s coal-fired plant, which would be equivalent to taking one million cars off the road.