That is a commercial question. In terms of the way that the two competitions are conceived at the moment, the UK Government wants an integrated flow from the generation of electricity through to the separation of the CO2, the pipeline transportation and the injection for permanent storage.
In the Peterhead to Goldeneye storage site proposition, the power plant is owned and operated by SSE but Shell UK, the oil company, has basically taken over the design and operation of separation, pipeline compression and injection. That will flow as one integrated project with only two partners in it.
By contrast, the other proposition at the Drax power plant involves a much larger array of actors, from the power plant owner and operator to the supplier of the oxygen used to combust the fuel in a high-oxygen atmosphere, the supplier of the generation and combustion equipment, the pipeline operator, which is National Grid, and eventually the operator of the storage. That is a much more complicated chain of interconnections between companies.
Those propositions are fit for purpose to get those two projects up and running because the partners can make explicit A-B-C contracts along that individual chain of connection. However, if the UK and, in particular, Scotland want to envisage the development of that type of new generation and a new market for carbon storage, we will need to open things out. We need to disconnect the power plant operation and the CO2 separating operation from offshore transport and storage, where there is a different array of actors. Those may include oil companies that transfer into a new, greener business or new companies. In effect, they will operate a storage site as a facility for an array of different power plants feeding into that storage site. At the University of Edinburgh, we have done quite a lot of research to establish whether that is technically feasible, and it is the least-cost route of opening things out.
While we are on the subject, I want to mention something that is particularly important to Scotland right now. The ownership of the storage site is a complex area. Underground oil and gas in the North Sea is owned by the Crown but operated by DECC. The ownership of pore space has been claimed by the Crown—pore space is, in effect, operated by the Crown Estate. With the Smith commission’s devolution of further powers to Scotland, there is an enormous opportunity for Scotland to gain control from the Crown Estate of the pore space in what I loosely call the Scottish area of the North Sea, which we could decide is basically the oil and gas area of the North Sea.
I am extremely concerned that that is a very fuzzy negotiation at the moment. If the uncertainty is not resolved, and if Scotland does not take ownership or directorship of the Crown Estate asset of the pore space, the development of the Peterhead proposition could be stopped. That would also mean throwing away a huge economic opportunity for the future. The conversation about the Crown Estate is largely about the visible onshore assets of royal estates in the Highlands, coastline anchorages, fish farms and so on, but the real money to be made out of it is in the possibility of storing huge amounts—millions and billions of tonnes—of carbon dioxide into the future. That storage would be not just for Scotland and not just for the UK, but for the whole of Europe, because the UK holds about 35 per cent of Europe’s easily accessible offshore carbon dioxide storage. There is the prospect of a £5 billion-a-year storage operation, if carbon capture and storage takes off. It would be negligent of Scotland to hand that back to Westminster now.