The most advanced carbon capture and storage (CCS) project in the UK could be cancelled or postponed, according to reports suggesting the government and ScottishPower are struggling to reach agreement on how to fund the proposed demonstration project at Longannet power station in Scotland.

The Guardian newspaper reported this afternoon that ScottishPower was considering cancelling the scheme following the completion of a detailed study of the proposed project, which concluded there was a high risk the facility would not be commercially viable without greater public backing.

The government has long promised to provide £1bn of funding to the UK's first large-scale CCS demonstration project, but the competition to award the funding has been plagued by difficulties. A number of rival bids withdrew their applications for funding, leaving Longannet as the only project in the running. However, the failure of the Department of Energy and Climate Change (DECC) to confirm the award to Scottish Power has fuelled speculation that the negotiations had run into trouble.

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