This week the BEIS CCUS Cost Challenge Taskforce produced its report into the potential for carbon capture use and storage in the UK.

“By demonstrating that CCUS can deliver decarbonisation across industry, power, and provide solutions for heat and transport, the report focuses on building a long term, commercially sustainable and cost-effective decarbonisation service industry for the UK. This, in turn, can bring new industrial opportunities, secure long term jobs, deliver new economic development cross our industrial heartlands and secure international competitiveness through new decarbonised products and services.”

According to the report, since 2000 the number of CCS facilities in operation worldwide has grown from 4 to 20…in fact, the reference used only lists 17 existing large CCS plants in operation, of which 13 use the captured CO2 for enhanced oil recovery. Four of the five CCS plants under construction are also for enhanced oil recovery. Only four of the existing plants and one of the plants under construction inject the captured CO2 into a dedicated geological storage facility: two are offshore Norwegian gas processing facilities where the CO2 extracted from the natural gas is injected into nearby rock formations.

CCSThe removal of carbon dioxide from natural gas is necessary to convert the gas extracted at the well-head into a form of methane that meets accepted pipeline specifications, and, in the case of Norway, there are specific taxes that apply if the carbon dioxide levels are higher. When this methane is subsequently burned, further carbon dioxide is released, which is not captured.

The third project is in Canada, where the CO2 the is generated in the production of hydrogen is captured and re-injected into nearby wells. In theory, this sounds very promising in the context of discussion around the conversion of the GB gas grid to hydrogen, which would likely require some form of CCS in order to achieve de-carbonisation goals, however, the Quest scheme involves injecting the hydrogen into the bitumen produced in the oil sands field in order to make lighter grades of oil. In other words, this is another application where the economics of CCS rely on the support of oil production.

The final scheme currently in operation with dedicated storage is a trial project in Decatur, Illinois where the CO2 produced in the processing of corn into a fuel-grade ethanol is injected into a large saline reservoir. Of course, burning ethanol releases carbon dioxide, so this can also be compared with oil production.

This means that there are no commercial CCS projects anywhere in the world that are not related to the production of hydrocarbon fuels – fuels that release CO2 when used for their designed purpose. This suggests that CCS is not economic unless used to support hydrocarbon production – those same hydrocarbons that need to be phased out in order to achieve de-carbonisation targets.

Only one of the facilities is a power plant, and this is a coal plant – there are currently no working CCS facilities attached to gas-fired power stations anywhere in the world, and, as I have previously described, this is a technically more difficult problem than CCS for coal.

 

“The Taskforce’s view is that with viable business models in place and clear Government and industry commitments to the policy framework, CCUS projects can be financed through private investment.”

If CCS projects are so attractive, why are there so few in existence, and why are they only viable in the context of hydrocarbon production. While the report acknowledges that subsidies would be needed to stimulate private investment in CCUS, the entire document appears to be an exercise in wishful thinking and presents an unrealistic picture of the prospects for CCS/CCUS to deliver the UK’s de-carbonisation goals.

Failing to address the lack of any CCS project worldwide that isn’t somehow connected with hydrocarbon fuel production, or the lack of any CCGT+CCS projects is a serious omission. The Government definitely should not be pouring subsidies into a technology that is so far from commercialisation.

 

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6 thoughts on “Smoke & mirrors: a new report into the viability of CCS

  1. Never mind the Smoke & mirrors, when do we get to see lying politicians put in a box & cut in half (no need to re-assemble), I’d pay money to see that !!

    1. It’s exactly the same issue as for natural gas storage – in 2014 the Castor underground gas storage facility was cancelled during commissioning due to seismic events and the developers paid €1.35 billion in compensation, with the Spanish government saying it would not consider any future underground gas storage projects.

      I think the only real way to make this work is to find commercial uses for the carbon dioxide rather than just storing it in whatever form, otherwise the economics don’t add up.

  2. “The Taskforce’s view is that with viable business models in place and clear Government and industry commitments to the policy framework, CCUS projects can be financed through private investment.”

    So only private investment then? I can only find reference to the effectiveness of our money being put into offshore wind:-
    “In our report, we have focused on areas where the public and private sectors can work in partnership. …..
    ……..
    Our emphasis on shared infrastructure, economies of scale, and reducing the commercial risks, as well as continued investment in innovation, takes its inspiration from what has happened with offshore wind in the UK, where we have seen dramatic reductions in subsidies over the last five years.”

    How does that work then?

    Nick.

    1. My reading was the private finance would need to be incentivised through a subsidy framework. It’s pretty clear that there is zero appetite for the private sector to finance CCS otherwise, as evidenced by the absence of any commercial CCS plants that aren’t linked to hydrocarbon fuel production (and even then there are hardly any of them).

      It would be shocking if the Government considered direct investment along the lines proposed for Wylfa given this is still a huge technology punt.

    2. A CFD with the Low Carbon Contracts Company and stick it on your bill along with the subsidies for other CFD generators.

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