Oil giant BP last night pulled out of a £500m world-leading project which would have brought 1000 construction jobs to the north-east of Scotland, on the day the government set out its energy plans.
The company, which has already invested more than £30m in the Peterhead carbon capture and storage (CCS) project, said it simply could not wait for a government-sponsored competition to decide who to back to build such a plant.
In yesterday's energy white paper Alistair Darling, the Trade and Industry Secretary, said the competition for the project would be launched in November.
Alex Salmond, the First Minister, last night expressed "deep anger and disappointment" claiming the delay set out in the energy white paper had "effectively sabotaged the project at Peterhead".
BP's decision came as the government said new nuclear power stations would be given the go-ahead later this year if a consultation exercise finds it is in the public interest to allow energy companies to invest in new nuclear build.
Alistair Darling launched the consultation paper on the future of nuclear power yesterday alongside the publication of a white paper in the House of Commons but only an hour before Tony Blair told MPs that nuclear power must be on the agenda if Britain was to secure energy supplies and reduce carbon emissions.
Clarifying the government's position, Mr Darling said the government had reached a "preliminary view" to allow the energy companies to invest in new reactors but he said a final decision would not be taken until the consultation process ended in October. Presenting the long-waited paper, Mr Darling, who is expected to be the chancellor in Gordon Brown's government, underlined the government's determination to encourage energy savings and cut energy use.
He set out plans to work with industry and others to improve the efficiency of domestic appliances, to phase out inefficient goods, and limit the amount of stand-by energy wasted.
But Alan Duncan, the shadow energy spokesman, condemned the government's policy for not going far enough, fast enough, and mocked the government hopes of having a national energy policy in the face of SNP refusal to contemplate new nuclear build.
He asked: "How can you deliver a UK-wide energy policy if Scotland rejects nuclear power? If the SNP have rejected both nuclear in principle and wind in practice, is the SNP's policy anything other than lunacy?," he asked. In the Commons, Mike Weir, the SNP's energy spokesman, said: "There was much that the SNP could support in the paper, especially on renewables and energy efficiency, indeed we would argue that energy efficiency should be given the highest priority.
"There is, however, a massive white elephant in the room in the shape of nuclear power. The Scottish people are against new nuclear power stations and the government of Scotland will not allow the construction of new nuclear power stations in our country," he added.
Dismayed at the government's decision to launch the competition in November, BP abandoned its plans to build a CCS plant in Scotland but did not rule out working with another company, most likely in Yorkshire, Lincolnshire of the Thames Estuary.
David Nichols, a BP spokesman, said government delays in deciding on the project had pushed the costs up too far. "Of course we're disappointed, it was a good opportunity but just one we couldn't bring to pass."
Mr Salmond said: "Delay and incompetence on the part of the Department of Trade and Industry has cost us a foothold into the hydrogen economy and a two-year lead over the rest of the world. That is what's been buried today as a result of DTI inaction."
He said there would be other carbon capture projects in future, citing the Longannet/ Cockenzie clean coal project.
A DTI spokesman said: "We are disappointed that BP has taken this decision. We are confident that when we launch there will be a number of companies who wish to bring forward proposals for CCS demonstration."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article