Carbon capture and storage is the key to developing a low-cost, low-carbon economy, says report
July 27th 2015
The Carbon Capture and Storage Association (CCSA) has published a report on the economic and strategic advantages of developing the UK’s carbon capture and storage capacity. The report states: “For over a decade, the UK has recognised the importance of commercialising carbon capture and storage in order to promote UK growth, deliver secure energy, and drive ambitious action on climate change.”
The previous government launched a competition for carbon capture and storage (CCS) projects in 2011, which resulted in two preferred bidders given the go-ahead for their projects. The Peterhead CCS Project is being developed by Shell and the Scottish energy company SSE, who say this will be the world’s first full-scale gas carbon capture and storage project: “Up to ten million tonnes of carbon dioxide emissions could be captured from the Peterhead Power Station and transported by pipeline offshore for long-term storage deep under the North Sea.” BBC News reports that a planning application for the onshore elements of a CCS plant at Peterhead was approved by Aberdeenshire Council last month, and Shell and SSE are looking for government funding to develop a commercial scheme. [1]
The White Rose CCS Project is being developed by a consortium comprising Alstom, Drax and BOC. The partners say the aim is to develop a state of the art coal-fired power plant equipped with full carbon capture and storage technology which will also have the potential to co-fire biomass. The standalone power plant is located at the site of the existing Drax Power Station near Selby, North Yorkshire. The project is intended to prove CCS technology at a commercial scale and to demonstrate CCS both as a competitive form of low-carbon power generation and also as an important technology in tackling climate change. The plant will generate electricity for export to the electricity transmission network as well as capturing approximately two million tonnes of carbon dioxide per year, some 90% of all carbon dioxide emissions produced by the plant. The gas will be transported through the National Grid’s proposed Humber pipeline for permanent undersea storage in the North Sea.
In its report, the Carbon Capture and Storage Association (CCSA) says that the two projects are making good progress on their engineering studies and permitting activities, and that the competition remains on track to enable final investment decisions to be made by early 2016. The CCSA also says: “It is hard to overstate how important the successful conclusion of the current competition is to the future of CCS in the UK. Failure to deliver two competition projects will seriously hinder the development of CCS in the UK, setting the industry back by a decade or more. The projects provide the foundations upon which the future CCS industry will be built, establishing essential infrastructure that can be utilised by Phase 2 projects.”
The previous government allocated £1 billion of capital funding for CCS in the 2010 spending review, and the CCSA says that to date around £100 million of this allocation has been spent on engineering studies and permitting of the two projects in the competition. It is calling on the present government to ensure that the remaining funds are retained for the CCS competition and allocated appropriately, so that construction work on the two projects can go ahead.
The economic and strategic case for developing the UK’s CCS capacity
The UK’s future low-carbon electricity is expected to be supplied by a diverse mix of technologies including offshore wind, solar, nuclear and fossil fuel power plants with CCS, and the CCSA report says that, compared with the other low-carbon technologies, CCS has not yet received the commensurate investment to enable costs to come down. However, the report presents evidence from the Energy Technologies Institute (ETI) to show that CCS has the most dramatic impact on the costs of achieving a low-carbon economy, with the potential to rapidly become cost-competitive with the other low-carbon technologies. The ETI analysis “has provided new insights on the contribution that CCS can make to two of the UK’s energy policy priorities: the delivery of cost-competitive, low-carbon technologies and achievement of the UK’s legally binding carbon dioxide reduction objectives.”
In addition to the economic benefits, the report says that the development of CCS can help to maintain the future competitiveness of UK industry, such as steel, cement and chemicals, as it is the only technology available to de-carbonise these essential sectors.
The CCSA argues that, to deliver these economic benefits, there should be a progressive roll-out of CCS so that by 2030 the UK has in the region of 10GW of power stations fitted with CCS technology: “Delivering this scale of CCS deployment by 2030 will benefit the UK’s broader strategic objectives of reducing carbon dioxide emissions at least cost, ensuring a secure energy system and stimulating investment in new jobs and businesses… Deploying CCS, alongside renewables and nuclear, could deliver electricity prices around 15% lower in 2030 than de-carbonising without CCS.”
“Critical stage”
In making the case for developing CCS, the report states that the UK has a tremendous advantage of well understood geology for carbon dioxide storage close to large concentrations of carbon dioxide emissions. Also, the UK has one of the most advanced policy and regulatory frameworks in the world to support CCS. However, the report points out that we are now at a critical stage in the development of CCS as decisions made by the present government “will determine whether the UK is able to secure its goal of delivering a cost-competitive CCS industry in the 2020s and will be key to enabling the UK to deploy CCS on a large scale.”
The report identifies three key steps that will retain the momentum of the first projects and are essential if the potential benefits of CCS are to be realised. The first, as mentioned above, is to ensure that the two existing projects are delivered in order to create the foundation that the UK’s CCS industry needs. It asks the Government to enable final investment decisions by early 2016.
Secondly, the report says the previous government recognised that a second phase of CCS projects is required to deliver cost-competitive CCS in the 2020s. It is calling on the present government to bring forward a second phase of CCS projects in the power and industrial sectors, to be undertaken in parallel with the development of the two existing projects.
Thirdly, the report says the roll-out of CCS deployment in the UK is dependent upon the timely development of adequately defined storage sites that can accept the large volumes of carbon dioxide generated from the power or industrial facilities fitting CCS. The two existing projects will establish storage sites in two regions of the North Sea, which have additional storage potential and could possibly provide the capacity required for Phase 2 projects. The report calls on the Government to establish grant funding of up to £100 million to bring forward adequate appraisals of the UK’s carbon dioxide storage assets.
The report, titled Delivering CCS: Essential infrastructure for a competitive, low-carbon economy, is available as a PDF download from the Carbon Capture and Storage Association website.
Note: CCS Update
[1] On November 25th 2015, the Government announced the withdrawal of funding for the CSS Commercialisation Competition. Following the announcement, Shell issued a press release which said that the Peterhead CSS project would not now proceed. See Shell’s “Peterhead CCS Project announcement”.
ENA UK 