AN American-led consortium has revealed plans to build a coal-fired power station at Grangemouth, re-igniting hopes that Scotland could become a world leader in carbon capture and storage technology.

Seattle-based Summit Power Group announced yesterday it had entered an agreement with National Grid and oil and gas services provider Petrofac to bid for the £1 billion available from the UK Government to develop the technology.

The move was welcomed by Energy Minister Fergus Ewing who said the venture showed Scotland was "extremely well placed to take this exciting new low carbon technology forward" but environmentalists claimed it would be vigorously opposed.

Summit's Caledonia Clean Energy Project will be submitted to the UK Government for funding under the Carbon Capture and Storage (CCS) Delivery Competition.

The company claimed the plant would capture 90% of emissions to produce low-carbon electric power and hydrogen gas for commercial use.

Summit said the location close to the North Sea was ideal for CO2 storage and oil recovery opportunities. It is currently developing a similar project in Texas and said it intends to replicate many aspects of that development at Grangemouth.

The project comes just months after the UK Government axed a £1bn CCS scheme at Longannet in Fife after commercial com-panies said the funding was not enough, claiming it would take £1.5bn to make it viable.

Proposals for a coal-fired power station at Hunterston in North Ayrshire were rejected by the local council last year and the coal-fired Cockenzie Power Station in East Lothian is to be closed by March next year because it does not meet environ- mental legislation.

A public inquiry is to be held before ministers make the final decision on whether to approve the proposed scheme at Hunterston with the company, Ayrshire Power, vowing to fight on.

It was also announced last year that Scottish & Southern Energy (SSE) and Shell were to work together in a bid to develop CCS at SSE's gas-fired power station in Peterhead, which has also been involved in an earlier CCS scheme, subject to Government funding.

Mr Ewing said: "It is essential Westminster clearly demonstrates its commitment to supporting the commercial development of CCS, not least when the continued commitment from industry is so clear.

"While no application for planning permission has yet been received, this project is another exciting proposal for Scotland."

Labour's energy spokesman Tom Greatrex said: "We now need the UK Government to provide some clarity on exactly how much and when funding will be available for the development of CCS."

However, Green MSP Patrick Harvie said: "I'm sure this new proposal will generate a wave of opposition.

"This consortium is keen to promote its relationship to the Texas Clean Energy Project, citing similar technology, but the fact is that this hasn't been built yet and isn't expected to be fully up and running till 2014."

WWF Scotland spokesman Dr Sam Gardner added: "We have a choice, we could test CCS technology on gas at Peterhead and coal at Grangemouth and both could reduce our climate emissions. Or we could choose to ignore our climate targets, trash an important coastal environment and back the high-risk Hunterston proposal."