The cutting-edge scheme to capture and store carbon emissions from fossil fuel power plants, starting in 2014, is meant to place Britain at the forefront of tackling greenhouse gases.
Sources close to Chris Huhne, the Energy Secretary, failed to dispel fears of imminent collapse, telling The Herald: “Talks are ongoing. We’re not going to give a running commentary.”
ScottishPower, one of the partners in the carbon capture and storage (CCS) scheme and owner of Longannet Power Station, was equally non-committal, saying: “The negotiations are still ongoing. They have definitely not been concluded, so that’s all we can say at the moment.”
The Scottish Government, much of whose carbon-reduction plans rest on the Longannet project, insisted Scotland could still be “Europe’s carbon storage hub”.
It added: “Longannet remains a contender in the CCS competition and ScottishPower is continuing to discuss its role with the UK Government.”
Yet well-placed industry insiders and political sources cast doubt on any hope of a positive development, with one stating: “It’s pretty much over”.
The Department for Energy and Climate Change in London has promised £1bn toward the project but, it is thought, the CCS partners, who include Shell and the National Grid, have strong concerns it is simply not viable without at least £1.5bn being committed from the taxpayer.
It was pointed out how, in his speech to the Conservative Party conference this week, Chancellor George Osborne, concerned at rising costs at a time of economic crisis, said if he had his way Britain would cut “carbon emissions no slower but also no faster than our fellow countries in Europe”.
Last night, environmental bodies expressed fears about the reports of the Longannet project’s imminent collapse.
Richard Dixon, the Director of WWF Scotland, said: “This news is deeply worrying. If the UK truly wants to lead the development of this technology, as many politicians have said, then we do hope that all those involved can find a way to make this project happen.
“It would be a major blow to international efforts to develop carbon capture and storage if this scheme were not to happen at Longannet,” he added.
A report by WWF found Longannet Power Station to be the best option for UK Government trials to capture carbon emissions. The environmental group said the other sites under consideration would result in vastly higher carbon emissions, equivalent to Scotland’s total annual emissions in 2050.
Stan Blackley, Chief Executive of Friends of the Earth Scotland, said: “If this flagship CCS trial at Longannet really is close to collapse, ScottishPower must re-double its efforts to develop and deliver energy efficiency and renewable energy projects instead, and the Scottish and UK governments must immediately put in place the funding and framework required to incentivise renewables while discouraging new fossil fuel power stations, such as the ones proposed for Hunterston and Cockenzie.
“Otherwise,” he added, “we risk failing to meet the carbon-reduction targets in the Scottish Climate Change Act.”
Jeff Chapman, of the Carbon Capture & Storage Association, said the collapse of the Longannet project would be “really disappointing”, but stressed: “There are lots of other projects that are ready to take its place.”
Longannet is the third largest coal-fired power station in Europe and has been branded Scotland’s biggest single polluter.
Last May, a Scottish Enterprise report suggested more than 5000 Scottish jobs could be created if three proposed CCS schemes – including Longannet – went ahead. It also suggested CCS developments could boost Scotland’s economy by more than £1bn.