Cameron sees North Sea as green energy hub

LONDON Thu Apr 26, 2012 2:11pm BST

Britain's Prime Minister David Cameron speaks during the launch of the Conservative Party's 2012 Local Election Campaign at Riddings Park Community Centre in Alfreton, central England April 16, 2012. REUTERS/ Christopher Furlong/pool

Britain's Prime Minister David Cameron speaks during the launch of the Conservative Party's 2012 Local Election Campaign at Riddings Park Community Centre in Alfreton, central England April 16, 2012.

Credit: Reuters/ Christopher Furlong/pool

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LONDON (Reuters) - Britain's North Sea has the potential to lead the world in offshore wind and carbon capture and storage technology, British Prime Minister David Cameron said as over 20 companies signed a deal to turn the region into a major renewable energy hub.

Major utilities such as Britain's Scottish Power and Norway's Statoil, manufacturers ranging from Siemens to Gamesa and supply chain companies are supporting a plan to develop the offshore wind potential of the North Sea, provisionally named Norstec.

Further details about the operations of the network will be revealed at an offshore wind conference in London in June.

"This (will) make the North Sea again a source of investment ... (It) has the potential to lead the world in offshore wind and carbon capture and storage," Cameron told ministers from 23 countries attending a two-day clean energy summit in London on Thursday.

The Crown Estate, which manages Queen Elizabeth's property holdings, also said it would explore whether offshore wind test sites can be set up in even deeper water, which could open up the energy potential of more of the North Sea.

Britain has an ambitious target of installing 18 gigawatts (GW) of offshore wind power capacity by 2020, compared with around 2 GW in operation in British waters at the moment.

Carbon capture and storage technology (CCS) - another area for green investment - traps emissions from power plants and stores the carbon underground, a technology which the UK government has singled out to help it meet legally-binding emissions reduction targets and which it wants to support with 1 billion pounds ($1.6 billion) of public money.

CARBON STORAGE

The government also said this week it would establish a 60 million pound fund to support CCS demonstration projects in developing nations.

Storing carbon under the sea has not been commercially proven in the UK, even though other countries, such as Norway and Canada, have successfully stored the gas in offshore fields.

Last week, academics said owners of depleted oil and gas fields off the UK coast could sell carbon storage space to neighbouring countries as pumping carbon captured from power plants out to sea would be better accepted by the public than burying it on land.

Cameron, who also said Britain had signed clean energy agreements with Germany, South Korea and the United States as part of the summit, said 4.7 billion pounds had been invested in UK renewable projects between last April and February this year.

"Our commitment and investment in renewable energy has helped to make renewable energy possible. Now we have a different challenge. We need to make it financially sustainable," he said.

In other deals on Thursday, German utility E.ON awarded a 736 million pound cable installation contract to UK construction firm Balfour Beatty to connect its Humber Gateway offshore wind farm to the electricity grid.

The 230-megawatt (MW) wind farm will be located 8 kilometres off the coast of East Yorkshire and its 73 turbines will produce the equivalent of electricity used in 150,000 homes.

Two UK biomass power plants also reached major milestones, with Helius Energy close to securing funds for its 300 million pound Avonmouth plant and a start made to construction of the ECO2 38-MW biomass plant in Sleaford, eastern England.

($1 = 0.6206 British pounds)

(Editing by William Hardy and David Holmes)

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