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.
The 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.