Two announcements over the last seven days in the carbon capture and storage sector - also known as CCS - were aimed at making “clean coal” less of an oxymoron.

China Energy Conservation and Environmental Protection Group said it would build a USD 1.5bn project in Inner Mongolia in partnership with the UK-based Seamwell International. The 1GW plant will use underground coal gasification technology and will also capture carbon emitted in that process. This would lead to a 50% savings in overall emissions when compared to a traditional coal-powered plant and also allow the utilisation of stranded coal assets. The two companies will first take up a demonstration project that Seamwell will finance.

At the other end of the globe, Royal Dutch Shell is set to receive USD 876m from the governments of Alberta and Canada for its Quest CCS project. The funds will flow over a period of 15 years, as specified performance targets are met.

The developments are being seen as a significant positive in a sector where setbacks and delays are common. There are eight pilot CCS projects with a total capacity of about 115MW that are currently operational. Bloomberg New Energy Finance estimates 3.2GW of CCS capacity will be online globally by 2017. This is after factoring in the reduced funding under the Australian government’s CCS Flagship Programme.

In the solar sector, the US energy department awarded a conditional loan guarantee for 80% of the USD 1.4bn debt of independent power producer NRG for a uniquely structured distributed solar programme spread across 28 states. Dubbed Project Amp, it will install 733MW of rooftop PV on industrial buildings owned by Prologis, the world’s largest warehouse manager at an estimated cost of USD 2.6bn. The loan for what is being seen as a pioneering project has been provided by Bank of America.

From the manufacturing side, the highlight of the week was an announcement by India’s Birla Surya that it will set up a USD 1.2bn plant to make 60MW of multicrystalline PV cells and 125MW of multicrystalline silicon wafers. Production is expected to start by December. Hong Kong based Asia Pacific Capital will invest INR 680m (USD 11m) of private equity in the initiative.

The trend of reduction in solar feed-in-tariffs continued with Bulgaria announcing reductions of 13% to 31%, depending on project size. The new rates, reflecting the falling price of solar panels, will be effective from July.

Meanwhile Spanish engineering and construction groups Magtel, Ortiz and TSK raised USD 421m in project financing for a 50MW parabolic trough solar thermal plant near Cordoba which is slated to be commissioned before end-2012. It will include molten-salt storage, allowing for power supply after the sun goes down. Solar thermal projects are now seen as less risky in the country than PV, after the recent retroactive cuts in feed-in-tariffs for the latter technology.

In the wind sector, China’s Huadian said it would invest USD 3bn to build wind farms in the northwestern province of Gansu. After Inner Mongolia, Gansu has the second largest installed wind capacity, according to the Chinese Wind Energy Association.

China, the world’s biggest emitter of greenhouse gases, is also reportedly working on a unified national carbon trading platform, which would be ready by 2015. Carbon markets in Europe meanwhile were in a flux with EU carbon permits touching their lowest price in two years, in response to concerns about future demand for allowances. EUA prices were as low as EUR 11.71-a-tonne at one point on Monday, before rebounding sharply.