By cutting up to 90% of carbon emissions from fossil fuel power stations, carbon capture and storage (CCS) could provide the vital key to maintaining a mix of energy sources while also meeting CO2 reduction targets.

The coal-fired Longannet power station in Fife has been in the vanguard of development but would require more than £1billion in Government funding to become the world’s first carbon capture demonstrator project by 2014. Any hope of that happening was dashed yesterday when the Coalition Government confirmed The Herald’s exclusive story that it was abandoning the project due to specific problems with the length of pipeline required between the plant and reservoirs for storing carbon.

However, the Prime Minister’s statement that the £1bn set aside for carbon capture will still be available to other CCS projects raises the question of whether the stumbling block is financial rather than technical. It appears the partners, Scottish Power, the National Grid and Shell, believe public funding nearer £1.5bn is required for the project to be viable. The explanation from the Department for Energy and Climate Change (DECC) that the Longannet scheme did not offer value for money for the taxpayer requires further explanation. Was there any negotiation with the industry on extra funding? Or was this a case of the Treasury overruling the DECC? On what timescale was value to the taxpayer calculated?

Whoever wins the race to develop a viable CCS scheme will gain control of storage and delivery for the next 30 or 40 years. This is the real prize. With Scottish waters thought to contain roughly half the storage capacity for the whole continent, it is particularly valuable for Scotland. A report in March by a group of researchers from academia, industry and the Scottish Government found that rocks deep beneath the Moray Firth could store decades’ worth of CO2 output from Scotland’s power stations, creating 13,000 jobs in this country and 14,000 in the rest of the UK.

Although a complex scheme to develop CCS at SSE’s gas-fired power station at Peterhead was ruled out four years ago, a second, simpler proposal backed by Shell and Petrofac could be eligible for a second phase of EU funding. To catch up with projects already underway in Holland and eastern Europe, however, would require Government funding. If four years of work at Longannet, developing CCS from a laboratory concept into a definitive blueprint with potential for implementation, there seems a compelling case for the DECC to consider switching at least some of the £1bn to Peterhead.

There are alternatives, most obviously in Yorkshire. But if technical feasibility is the determining factor, the power station at Peterhead, which already exists and where experts see few technological barriers, would appear to be the prime contender. Without CCS to underpin carbon reduction, can Scotland hope to achieve its green energy dream?