First Minister Nicola Sturgeon calls for carbon capture reversal

Peterhead power station was in the running for the grant

First Minister Nicola Sturgeon has called on the UK government to reverse its decision to cancel a £1bn competition to develop carbon capture and storage technology.

Peterhead power station and the White Rose scheme in North Yorkshire were the bidders in the competition.

Mr Sturgeon said at FMQs on Thursday that Wednesday's decision was "utter folly" and "downright wrong".

Shell and SSE are behind the Aberdeenshire plans.

The project could have created hundreds of jobs at Peterhead power station.

'Engage closely'

The decision was announced after Chancellor George Osborne's Autumn Statement.

In a stock exchange announcement, the government said: "Following the Chancellor's Autumn Statement, HM Government confirms that the £1bn ring-fenced capital budget for the Carbon Capture and Storage Competition is no longer available.

"This decision means that the CCS Competition cannot proceed on its current basis.

"We will engage closely with the bidders on the implications of this decision for them."

Shell, SSE and local politicians all expressed disappointment in the wake of the news.