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CCS sounding positive in Cambridge

BIGSTOCK: Cambridge University hosts UK CCS Research Council Spring Biannual

The futuristic pagodas of the Cambridge University’s Department of Applied Maths and Theoretical Physics played host to the UK CCS Research Council’s Spring Biannual last week. Was there a covert message that CCS has been confined to the realms of theory? A climate modeller’s tool for making their scenarios add up, but not something we ever expect to see? A Higgs Boson?

On the contrary, the atmosphere among the gathered CCS luminaries was the most upbeat it has been in a while – clearly buoyed by the UK government’s new-found enthusiasm for talking more about CCS. The tone was set by a rallying cry of an opening address from ex-MEP Chris Davies, who spoke passionately of his conversion to the CCS cause upon hearing the hiss of CO2 being pumped beneath the Algerian desert. However, his view from the Continent does not instil the same hope. CCS was described as ‘persona non-grata’ in most of Europe, where it is still shackled by the old myths of being untested or too expensive. Mr Davies pointed out the irony that all our action on climate change has been based on the ‘holy writ’ of the IPCC, while the advice of this same organisation on the critical need for CCS is ignored. There is some cause for hope, as the Commission have recently being tasked with preparing an emissions reduction strategy to 2050 – a time-scale at which CCS should become essential. Believing political advocacy to be the essential missing piece for CCS, Mr Davies is currently forming a Europe-wide group with which to put pressure on recalcitrant politicians.

Nevertheless, the view in the UK is not so bleak (perhaps thanks to the existence of our own advocacy group, the CCS Association). Rechristened CCUS (a trend which I have so far stubbornly resisted), the technology is rising unexpectedly from the ashes of the cancelled ‘CCS Commercialisation Competition’, in the form a number of new government initiatives set up this year. As outlined by government CCS-stalwart Will Lochhead, these include a CCUS Cost Reduction Task Force, a CCUS Deployment Pathway, a CCUS Council, more innovation funding, and an international conference to be held later this year. The name of the game for CCS in the UK is no longer coal power plant, but the much more PR-friendly ‘industrial hubs’ and methane-to-hydrogen for heating. This shift was emphasised by a presentation on the ‘Powering Past Coal Alliance’ initiative launched with much fanfare by the UK and Canada at the last COP meeting, which calls for an end to unabated coal by 2030 in the OECD, and by 2050 elsewhere. Unfortunately, the ‘unabated’ is usually ignored in any reference to this cause, and the movement seems far from a champion of CCS.

On the other hand, gas power with CCS is still in the clear, not just by avoiding association with the black stuff, but for the more practical reason of being lower cost; the higher capital cost of a new coal plant outweighs the fuel saving in countries with high build costs, like the UK. Aside from the small matter of providing the country with much-needed clean, dispatchable energy, power plants have been deemed essential for the economics of industrial CCS hubs by providing a dependable, relatively constant flow of CO2, which other emitters could feed into as necessary. Gas-to-hydrogen plants are a possible alternative for this role of ‘anchor project’. Two prospective gas power projects were presented: the one-time-coal-plant Caledonia Clean Energy Project near Grangemouth, and the Clean Gas Project led by the Oil and Gas Climate Initiative – an oil and gas industry group. The Caledonia team have done important work on establishing a viable business case for their project by laying out possible terms for a better commercial structure with government, which has largely been blamed for the unnecessarily high costs of the failed Peterhead and White Rose projects. Suggested improvements included more appropriate terms for the Contracts for Difference, regulated charging for transport and storage services, and rewards for the valuable capacity and balancing services provided by the plant.

These ‘system benefits’ provided by CCS power plant were a major focus of the panel session I attended on the following day. Presentations from both Imperial College and Andy Boston (of Red Vector) quantified the familiar message that renewables can only take us so far on the path to zero carbon electricity – deploying dispatchable CCS plant becomes the least-cost option as issues with intermittent renewable capacity mount up. The Wood Group have recently completed a comprehensive cost analysis of CCS technologies for the UK government, and confirmed that, at £70/MWh compared to £93/MWh, gas beats coal on cost of electricity, due to the high cost of capital in this country. More interestingly, this capital premium puts even highly efficient new technologies such as the Allam Cycle or molten carbonate fuel cells at an overall cost disadvantage. The Imperial College work backed up this key fact – optimising CO2 capture efficiency is not particularly significant, so governments should stop worrying about new technologies and use what we have now.

Among the international speakers in the closing session, Howard Herzog of MIT gave a timely summary of the new US policy making waves in the global CCS community: the reform of the 45Q tax credit, which compensates CCS projects for every ton of CO2 they store. This credit will now increase linearly until it is around $23/t in 2026 (double its current value), and a cap on the total amount to pay out has been removed. Hotly awaited by CCS supporters, the reaction to this policy has been more muted than I expected, with few expecting it to make power projects or geological storage worthwhile. On the other hand, we may start to see more industrial projects and enhanced oil recovery taking off, but such projects are also being suppressed by low oil prices. The Netherlands also recently surprised everyone with a highly positive CCS policy, having announced an aim of storing 20 Mt of CO2 per year by 2030. The catch is that none of it can be from fossil power (coal or gas), with only 2 Mt allocated to waste-to-power. The UK’s argument for needing a single large source of CO2 seems to be missed here, and the several brand-new coal plants in the Netherlands would surely be great candidates for this role. In this case the plant capital is already spent, so the cost argument against coal seems absent, and the money invested in these plants is in danger of being wasted for the sake of principle alone.

So, like the elusive boson, CCS may yet be transformed into tangible reality in the UK. The general feeling in the CCS community seems to be relief that the government has far from given up on CCS, tempered with some frustration that we appear to be going through some familiar preliminary steps. We have learnt a lot from the failure of the earlier CCS demonstration projects, and government and industry should seize this opportunity to correct past mistakes.

 

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