The green light has been given for the £4bn Net Zero Teesside Power (NZT Power) carbon capture and storage project to move into the next phase of development.

NZT Power has announced financial close and entry into the execution phase of what aims to be the world’s first gas-fired power station with carbon capture and storage.

Construction is due to start from mid-2025, with start-up expected in 2028.

NZT Power will progress in parallel with the Northern Endurance Partnership (NEP), which also announced financial close and entry into the execution phase of the CO2 transportation and storage infrastructure to serve three initial carbon capture projects on Teesside as part of the East Coast Cluster.

Building work on the two projects will be completed by nine engineering, procurement, and construction contractors across eight contract packages with a combined value of around £4bn. 

NZT Power could create and support more than 3,000 construction jobs and then generate 1,000 jobs during operations. 

Once operational, the combined cycle gas turbine electricity generating station could produce up to 742 megawatts of flexible, low-carbon power – equivalent to the average annual electricity requirements of more than a million UK homes.  

Up to two million tonnes of CO2 per year will be captured at the plant, and then transported to secure subsea storage sites beneath the North Sea via infrastructure provided by NEP.

The news follows the government’s decision in October to commit £21.7bn of funding to launch the UK’s first carbon capture sites – on Teesside and Merseyside.

Prime minister, Keir Starmer, said the news meant “thousands of jobs secured in the North-east and across the UK for years to come”.

Ian Hunter, managing director at Net Zero Teesside Power, said: “Today’s announcement is the culmination of years of work to make Net Zero Teesside Power a reality.

“As the project progresses into the execution phase, we look forward to delivering on our ambition to create and support thousands of jobs whilst generating flexible, dispatchable low-carbon power for the UK.”

Energy Secretary, Ed Miliband, added: “This investment launches a new era for clean energy in Britain – boosting energy security, backing industries, and supporting thousands of highly skilled jobs in Teesside and the North-east.

“This is the Government’s mission to make the UK a clean energy superpower in action- replacing Britain’s energy insecurity with homegrown clean power that rebuilds the strength of our industrial heartlands.”

NZT Power is a joint venture between BP and Equinor.

Louise Kingham, SVP Europe and head of country UK for BP, said: “These projects represent another step forward for BP’s overall investment plans in the UK.

“They harness the skills, talent and determination of an established industrial region and apply them to the UK’s own energy transition.

“We’re proud of the potential of these projects to help stimulate economic growth by supporting thousands of jobs and helping UK companies prosper through the vast supply chains involved, while creating the infrastructure to help major industrial companies with their decarbonisation plans.”

Alex Grant, SVP and head of country UK for Equinor, said the news was “a major step” for both Equinor and the UK, helping to decarbonise the country’s industrial heartlands and achieve its net zero ambitions whilst providing jobs and supply chain opportunities.