Oil giants back green power station

Plans for a revolutionary new type of power station which produces enough electricity to power a quarter of a million homes but emit only a tenth of the carbon of conventional fossil-fuelled stations took an important step forward yesterday.

The oil companies BP, Shell and ConocoPhilips, together with the power company Scottish & Southern Energy, announced they are to commence the engineering design of the station which produces "decarbonised" fuel by converting natural gas into hydrogen and carbon dioxide gases.

The hydrogen gas will be used to fuel the station whilst the carbon dioxide will be pumped back into the North Sea, either to be stored or to enhance oil production from existing oilfields.

The companies said the 350 megawatt station, costing about £300m to build, could be in operation in 2009 provided the final go-ahead was given next year. This depended, they added, on the Government introducing "an appropriate policy and regulatory framework" which encouraged carbon capture and storage.

Lord Browne, the chief executive of BP, said if just 5 per cent of the world's electricity generating capacity was based on the new technology then by 2050 global carbon dioxide emissions could be reduced by one billion tonnes a year. The UK has set itself as target of reducing greenhouse gas emissions by 60 per cent by that date.

The station would be near Peterhead on the north-east coast of Scotland and would convert up to 70 million cubic feet of natural gas a day into carbon dioxide and hydrogen.