Hosted by the British Institute of Energy Economics
Chair: Sir Ed Davey, former Secretary of State for Energy and Climate Change
Professor Geoff Maitland, Director of the Qatar Carbonates and Carbon Storage Research Centre
Dr Graeme Sweeney, Chairman of Zero Emissions Platform coalition
Mike Thompson, Head of Carbon Budgets for the Committee on Climate Change
Jim Ward, Business Development Director at the Energy Technologies Institute
On the evening of 28 January 2016, the BIEE (British Institute of Energy Economics) hosted a heavily oversubscribed roundtable discussion on carbon capture and storage (CCS) in the UK. It was a timely event as the National Audit Office has just announced an investigation into the decision announced by Chancellor Osborne in November 2015 to withdraw funding for the CCS competition.
It was a refreshing surprise to see Sir Ed Davey championing CCS and supporting a panel that highlighted both cost and engineering-based arguments against abandoning CCS. Even the representative from the Committee on Climate Change expressed support for a revival of the CCS funding on cost grounds alone.
Each Panel member quoted research findings stating that an energy economy without CCS would cost billions, if not trillions of euros; more than any energy scenario that excludes CCS. Saturation of renewables will escalate system costs, large amounts of solar and wind would compound intermittency problems and marginal gains will lessen dramatically such that the returns would be unsustainable (presumably even if the unit building cost of variable renewables was claimed to be falling).
The Panel agreed that mobilising a CCS project via a competition has given rise to some major flaws in developing large scale low-carbon technology. Specific talk of abandoning the funding for the competition suggested another is (possibly) out of the question, not from the part of the government, but from the side of industry. The competition rules forbade various industry participants from collaborating. Thus, rather than promoting cooperation, the competition appeared to foster divisiveness. Confidence in such a scheme has been shattered.
The EU Emissions Trading Scheme (and the prevailing market price of CO2) is a mechanism that has not encouraged CCS, even when modelled at a price of 20 €/tCO2. The Panel agreed that pure market mechanisms will not work to kick-start funding for the first group of capture projects needed (in the EU); it must be led by central government. The EU ETS certainly didn’t drive the introduction of large scale renewables until favourable feed in tariff structures were introduced.
The CCS performance target was discussed. Panel members asked why a coal-fired plant had to achieve 90% capture efficiency, why the initial performance target could not be made softer, with a view to strengthening capture targets in future projects. Setting achievable goals at this stage is more constructive towards the end goal of a near zero emissions plant.
While funding for R&D is regarded as important for CCS, it was not central to the debate; rather, the Panel demanded that funds be made available to operate a utility-scale system, preferably to enable a working cluster to be established. The cluster would enable the capture readiness of essential heavy industry, (chiefly cement and steel). Without the deployment of CCS in the UK heavy industry sector, its long term prospects are virtually non-existent. Energy intensive industries will be in jeopardy if a 100% renewables target path is followed and CCS disregarded.
The forthcoming switch to (fracked?) gas-fired power in the UK places too much faith in a single fuel, and also CCGT plant locations would be so spread out and disparate that CCS clusters would be impossible to develop. It seems CCGT without CCS readiness is the current programme for UK energy development.
Aside from the UK competition debate, an immensely important and worrying statement was raised: why did CCS side meetings at COP21 (UN 21st Conference of the Parties) attract so few attendees? Has the UN turned its back on CCS, and is this chemical and engineering solution too technical to gain wider public and political appeal?
A Panel member made various recommendations to facilitate the progress of CCS in Europe, including:
• Developing a collaborative model, rather than a competition;
• Asking the UK government to co-fund with other member states and the EU, to develop an EU project.
• Industry must lead the project definition.
• Fix the EU ETS and secure a series of seed funding and consent roll out projects, offering offtake terms similar to that of the nuclear CfD (Contract for Difference).
• Define ‘capture ready’ in terms of location and design
• Award permits and consents, especially when multi-departmental offices are involved.
On a positive note, and there are many positives, lessons have been learned in Canada, the Netherlands, and Norway. Just because a CCS project might appear costly, or even unnecessary at first, a commitment to combatting climate change by governments and industry can make projects happen and revive and provide ongoing support for this critical technology. CCS issues are not insurmountable and not out of reach for 21st century engineering.
The time scale to build a number of CCS projects (in the EU alone) will be short, and cost overruns could occur, but the climate doesn’t have decades before the 2 degree scenario trajectory is irreversible.