Scotland plans to fit all its existing coal-fired power plants with carbon capture and storage (CCS) technology by 2025 and require new coal stations to be fully equipped with CCS from the turn of the decade, the Scottish government said on Monday.

A 'rolling review' of the technical and economic viability of CCS will take place by 2018, looking specifically at retro-fitting CCS to existing coal plants, with the likelihood of having existing plants retro-fitted by no later than 2025, the government said in a report about the future of Scotland's electricity generation.

CCS is seen as a vital technology to help reduce carbon emissions from thermal power plants in order to achieve legally binding climate change targets, but the technology remains commercially unproven and costly to develop.

Currently, all coal-fired power plants built in Scotland have to be equipped with CCS technology on at least 300 megawatts (MW) of installed capacity, while gas and oil-fired plants have to be ready to fit CCS equipment in future.

The successful demonstration of CCS in Scotland over the next decade could create up to 5,000 jobs and be worth 3.5 billion pounds ($5.6 billion) to the Scottish economy, the report said.

UK government plans to financially support a CCS project at Longannet in Scotland fell through in October when the developer and the state could not agree on the funding required.

The UK energy ministry is expected to launch a new CCS tender for up to 1 billion pounds of funding shortly, while the European Commission is running a parallel EU-wide funding programme for CCS and renewable energy projects.

100 PERCENT RENEWABLE

The report also showed that Scotland's ambition to produce enough power from renewable energy sources to cover 100 percent of gross consumption by 2020 was possible, with 14-16 gigawatts (GW) of green energy capacity needed.

We know our target is technically achievable. Scotland already leads the world in renewable energy, and we have the natural resources and the expertise to achieve so much more, said Scottish Energy Minister Fergus Ewing.

But the government recognised the need for stable baseload power generation from thermal and nuclear power plants to complement intermittent renewable energy.

Even though Scotland is opposed to the construction of new nuclear power plants, it said it would not block the lifetime extension of EDF Energy's two existing nuclear plants in Scotland.

The utility's Hunterston and Torness nuclear plants are due to close in 2016 and 2023, respectively, but EDF Energy plans to extend the reactors' operating lifetimes by at least five years if the nuclear regulator sees an extension as safe.

The report did not address potential energy issues that could arise from Scotland's quest for independence.

Two weeks ago, Scottish utility SSE said plans for a Scottish secession had increased investment risks and called into question nearly 1 billion pounds of its potential energy investments.

(Reporting by Karolin Schaps, editing by Jane Baird)