This was the biannual meeting of a consortium of research organisations and universities involved in CCS activities within the UK. Hugh McCann, University of Edinburgh, opened the meeting reminding us of last year’s withdrawal of funding for CCS within the UK. Despite this, he noted, it was clear from the delegates in the room (well over 150), and the number of activities and projects continuing in the UK, that CCS in the UK “is not going away”.
Jon Gibbins, UK CCSRC (Carbon Capture and Storage Research Centre), gave a quick reminder of how volatile the UK government’s approach to CCS has been over the past few years, introducing the keynote speaker, Rupert Wilmouth, Government Office for Science, as one of those who worked to almost get £11 million of funding for CCS before changes in policy wiped the funding out.
Wilmouth opened by explaining the different factors which affect government policy, including the energy trilemma. The original UK Low Carbon Transition Plan still stands to some extent – the proposal included nuclear, renewables and CCS. However, since then the government has responded to the review committee for this plan, claiming CCS to be “currently too expensive and costs must come down”. But is CCS really that expensive? Wilmouth quoted current costs for energy in the UK at £101/MWh for onshore wind and £120/MWh (down to £85/MWh by 2026, based on 2012 figures) for offshore wind. There will be no more subsidies for onshore wind in the UK. Drax biomass-fired power amounts to £105/MWh and the controversial Hinkley Point C comes in at £92.50/MWh. But CCS was estimated at around £85/MWh – and therefore it was actually the cheapest option for a low carbon UK.
There still remains the option for industrial CCS in the UK, with cement plants and iron and steel offering the greatest potential for significant CO2 reductions in the most cost effective manner.
Even if Hinkley Point C had not received the go ahead the day after Wilmouth’s presentation, he had said that it was virtually guaranteed that the UK would have “significant” nuclear capacity by the late 2020s. But, whilst the future for CCS may be less defined, there was still every opportunity for CCS to have an important role in the UK.
Chunshan Song, University Coalition for Fossil Energy Research (UCFER), USA, gave an introduction to a new venture. The UCFER is funded by the US Dept of Energy’s NETL (National Energy Technology Laboratory) through Penn State University and was launched in April 2016. There are nine member universities (including Penn State, MIT, and Princeton) and the coalition has been awarded $20 million with a mission to “advance basic and applied research and promote collaborative research”.
Simon Bittlestone (National Audit Office) summarised the key findings from the audit on the Government’s 2012 report which concluded that the UK’s CCS competition project would not have been affordable within the assigned budget (£1 billion) and that the government needed to work more closely with industry and to needed to attain appropriate commercial skills to understand the key risks for future investments. The main conclusion was that HM Treasury did NOT make the most of the opportunity to encourage departments to work across the government on environmental issues. The cost for meeting the UK’s 2050 CO2 target without CCS would be an additional £30 billion. DECC admitted that, without the CCS competition there would be delays but did not quantify these delays in terms of cost, arguing that, currently it is not cost-efficient to invest in CCS, and that there were “better uses for the £1billion”. However, this means that, in the long term, the pressure is on to create the CCS infrastructure in time to meet 2050 targets.
A brief panel discussion focussed on the necessity for CCS – it was agreed that CCS is an integral part of the UK’s low carbon future but this really requires the government to act. Private industry cannot provide the levels and timescales of CCS availability without significant financial and political support. The value of £85/MWh quoted for CCS, many wondered whether this value is achievable without investment in a large scale demonstration project. Costs for CCS vary between CCS associated with electricity generation rather than CCS associated with industry. Further, the costs are estimated based on electricity production and levelised costs, which will not necessarily apply consistently over the time frame of CCS development and deployment. There has to be a balance between the immediately profitability of a project and the long term necessity of a project.
Much of the open discussion of the first day of the meeting focussed on the newly released Oxburgh report on the importance of CCS in the UK. http://www.ccsassociation.org/news-and-events/reports-and-publications/parliamentary-advisory-group-on-ccs-report/ . In the words of the report’s author, “I have been surprised myself at the absolutely central role which CCS has to play across the UK economy if we are to deliver the emissions reductions to which we are committed at the lowest possible cost to the UK consumer and taxpayer”. The Committee on Climate Change recently reported the additional costs of inaction on CCS for UK consumers to be £1-2bn per year in the 2020s, rising to £4-5bn per year in the 2040s. The report calls for urgent action, recommending, amongst other things, that a CCS Delivery Company (“CCSDC”) should be established that will initially be government owned but could subsequently be privatised. The report is easy to read and seemed to be generally supported by the majority of the delegates at the meeting.
The day ended with break out workshops on how best to pitch CCS to the public, investors and government. The tag line of the meeting was “Making the case for CCS” and so it was clear that the organisers wish the delegates to strive to be part of the movement which leads to the government actually investing in CCS. There is indeed a large gap between some of the presentations at this meeting and the kind of information that needs to be shared widely but which can also be understood by those working in the levels of government who can actually move things forward.
Brian Allison, Dept Business, Energy and Industrial Strategy (BEIS) stated that his department is working on a response to the Oxburgh report and so there can be no official statement at this stage. However, Allison seemed positive about the number of UK projects receiving EU funding for CCS. Chris Young of EU Energy Focus then explained the free (UK government funded) help available for accessing EU funding for R&D: http://www.euenergyfocus.co.uk/
Andy Chadwick, Uni of Edinburgh, then led us back into more technical presentations, starting with the UKCCSRC study of the development of onshore injection sites in the UK. Ironically, testing injection costs are high due to the price of CO2 required for experimentation. Ongoing injection projects are mostly taking place in the USA and these cost, on average, $10-20 million each.
There was then a session of short, 5 minute, pitches on UKCCRS call projects, ranging from mixed matrix membranes for post-combustion capture to performance of flow meters. The delegates then split into two parallel sessions; one on capture and the other on storage. The capture session opened with Patrick Dixon giving an update on gas CCS in the UK but asked that Chatham House rules be applied since some of the data had not yet been approved for public release. Tim Golden, Air Products, spoke about a US Dept of Energy large scale demonstration project at Port Arthur where enhanced oil recovery has achieved 4 Mt of CO2 capture so far – 95% CO2 recovery at 97% purity (see https://sequestration.mit.edu/tools/projects/port_arthur.html). The current path of the project is to reduce costs for the technology involved.
Stuart Scott, Cambridge Uni, then spoke on looping cycles, suggesting that the cost of a chemical looping plant was around 119% the cost of an unabated reference plant whilst oxyfuel sits at 137%. Although, theoretically, costs could come down in the long term, Scott stressed the importance of the fact that these projected costs are based on some pretty strong assumptions on the upscale-ability of these systems and assumes a level of reliability which has yet to be demonstrated in practice. Demonstrations have only really been successful for several hours at up to single MW scale. Despite this, the lifetime requirements of the materials required, which represent an important factor in the cost analysis, appear to be long enough to keep the process potentially economically viable. And so the technology is far from proven but does appear to be worth further investigation and development.
A panel discussion then involved a few technical clarifications on some of the presentations but also a short debate on the scalability of costs from demonstration projects to full-scale plants and the reliability of the £/MWh cost data being quoted in several publications.
Patrick Dixon then returned to the podium to give an overview on lessons learned from the UK CCS programmes. He stressed that both the cancelled Peterhead and White Rose projects would have delivered “outcome” in their area – that is, capacity, pipeline work, infrastructure would all have been achieved and 24 Mt CO2/y control would have been delivered. Initial costs would indeed have been high but would have led to costs being reduced by 60-80% for follow-on projects. Currently there remain several barriers to the economics of CCS – cross-chair risks are high and no-one wishes to accept the full costs. Storage sites are available but still expensive. Investors are also hesitant to move forward with projects until the new government policy on CCS is determined. Dixon believes that the £85/MWh for CCS in the UK suggested in the Oxburgh report is achievable but requires government investment.
Stuart Hazeldine, of the Uni of Edinburgh, SCCS, closed the meeting with a summary of the results of the Oxburgh report. He agreed that the initial CCS projects were expensive but this was because the costs were not based on the prices quoted by the competition projects for long term costs. The government did not seem to understand that these initial projects included infrastructure creation and that the costs were for start-up and not for continued and repeated projects. Much of the issue was with additive risk premiums, which potentially skewed the results – a small risk premium (+15%) added to each stage results in an increase in estimated total cost by 80%. There was no way the competition could achieve a low cost outcome using this approach. All of the companies which had been willing to invest in CCS in the UK have lost their initial investment and now have “less than zero” trust in the UK Government. According to Hazeldine, CCS exists in various forms worldwide and nothing extra is needed to start a UK plant tomorrow. Negative emissions will be need to comply with the COP21 targets and so CCS is “unavoidable”. Acting now is necessary as there is a long and steep trajectory to get to where we need to be by 2050. CCS should not be developed as a special case under immense grants but as a “normal” part of the new energy infrastructure. Careful procurement and management can make the £85/MWh price achievable, especially if a new commercial company is created for this specific purpose. The Oxburgh report has 6 major recommendations:
– Establish CCS delivery company
– Establish regulated return economic system for CCS
– Provide Industrial Capture Contracts
– Widen application – establish a heat transformation group (hydrogen)
– Create a storage market – establish a CCS Certification of Storage
(only applicable to storage >1,000 years and preferably >100,000 y – ie, not trees or biomass, but rather injection or concrete blocks
– Establish a CCS Obligation System
Overall, not least considering that this meeting is free, this conference was an excellent mix of both new academic data and important political and economic debate on the future of CCS in the UK. It is clear that the interest is high and the skill-base in the UK could well be the strongest in the world. As emphasised in the Oxburgh report – doing nothing is actually costing the UK more than doing something. The talent and skills are poised and ready, the government simply needs to mobilise this expertise through strong financial investment as soon as possible.