A scheme to build gas-fired power station with carbon capture and storage on Teesside is set to start next year after financial terms were signed today.

A joint venture called Net Zero Teesside Power, a tie-up between energy firms BP and Equinor, has signed financial close with the government on the deal which involves building two carbon capture and storage (CCS) projects on the north-east coast.

Firms that will work on the £4bn scheme include Balfour Beatty and Costain with NZT Power saying its plans could create more than 3,000 construction jobs and generate 1,000 jobs during operations.

The scheme will be built on the Teesside coast

The NEP infrastructure will initially serve the Teesside-based East Coast Cluster carbon capture projects – NZT Power, H2Teesside and Teesside Hydrogen CO2 Capture – that were selected for first connection to NEP by the Department for Energy Security and Net Zero last March.

Once up and running, NZT Power said the projects could generate up to 742 megawatts of low-carbon power – equivalent to the average annual electricity requirements of more than 1 million UK homes.

Energy secretary Ed Miliband said: “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.”

NEP said construction will start from the middle of 2025 with start-up expected in 2028.

The infrastructure includes a CO2 gathering network and onshore compression facilities as well as a 145km offshore pipeline. The infrastructure will transport and permanently store up to an initial 4 million tonnes of CO2 per year.