CCS: Just do it
Carbon capture and storage is making progress, but governments will need to accelerate its deployment significantly
IF YOUR brakes fail, it is all about damage limitation. In a car, the airbag might save you. In a world struggling to put the brakes on CO2 pollution, it could be carbon capture and storage (CCS).
The International Energy Agency (IEA) certainly thinks so. The agency says CCS could account for 19% of the reductions required to halve carbon emissions by 2050, a target it thinks would limit the long-term rise in atmospheric temperature to an acceptable 2-3°C – the single-biggest chunk after energy-efficiency improvements.
The technology will be most significant in power stations and factories. More than 40% of the world's energy-related CO2 emissions come from electricity sourced from fossil fuels and 25% come from large-scale industrial processes, such as iron and steel production. And, says the IEA, the world will need to add an average of 35 coal-fired plants 20 gas-fired plants – all with CCS capability – every year until 2050 to meet its carbon targets. It has set out plans for 100 projects globally by 2020 and over 3,000 projects by 2050, and it suggests that without CCS, overall costs to reduce emissions to 2005 levels by 2050 will increase by 70%.
But despite the urgency caused by the world's supposedly perilous environmental situation and the compelling long-term economic arguments in favour of investing quickly in CCS and other carbon-mitigation technologies, progress has been slower than proponents had hoped.
There are still just four large-scale CCS projects in operation – Algeria's In Salah project, Sleipner and Snøhvit in Norway, and Canada's Weyburn-Midale venture. As none of them involve industrial-scale capture of CO2 from a power plant, CCS remains untested on a full commercial scale.
In addition, CCS technology will eventually have to be adopted by biomass- and gas-fired power plants; in the fuel-transformation and gas-processing sectors; and in emissions-intensive industrial sectors such as cement, iron and steel, chemicals, and pulp and paper.
Yet progress is being made, especially in the EU. Last year's CCS Directive established a regulatory framework for long-term storage of CO2 in geological formations. It has also introduced two funding mechanisms, setting aside 300m EU Emissions Trading System allowances for up to 12 CCS demonstration projects (some of the money will also be spent on renewable-energy demonstration projects) – worth about €4.5bn ($6.24bn) at press time, when carbon was trading at €15 a tonne. Separately, the European Economic Recovery Programme has allocated €1bn to six CCS demonstration projects. The European Commission had hoped to have 10-12 demonstration projects in operation by 2015; a more realistic figure is probably six to eight, but that would still represent important progress.
Within Europe, the UK has made the biggest advances. The previous (Labour) government made CCS a compulsory element of new power plants, requiring new thermal generating units with a capacity greater than 300 megawatts (MW) to demonstrate carbon-capture readiness and coal plants to have capture technology installed on at least 300 MW of capacity.
It also set up a stable funding stream for CCS through a special levy on electricity suppliers. Introduced by the 2010 Energy Act, the CCS levy had been expected to generate £11bn ($17bn) over 15 years. The Labour government also launched a competition for £1bn of government funding to build a post-combustion-capture demonstration project at a coal-fired power station. And it laid out plans for another three CCS demonstration projects.
The present government (a coalition of the Conservative and Liberal Democrat parties) says it supports CCS and the idea of four demonstration projects, but its October spending review has made the outlook for CCS uncertain. The review commits £1bn to the first demonstration CCS plant, but delays the introduction of the CCS levy until at least November 2011, while a reform of the climate-change levy is undertaken. Suspending the levy removes certainty over how CCS will be funded and will discourage investment. Jeff Chapman, head of the UK's Carbon Capture and Storage Association (CCSA), says "a commitment without funding is an empty promise" and describes the review as "a blow to business confidence".
Indeed, on the day of the spending review, Germany's E.On, one of two bidders left in the competition for the first demonstration plant, said it would not proceed to the next stage of the competition, because the market is "still not conducive" to building the 1.6 gigawatt supercritical power station it had proposed for a site at Kingsnorth, in Kent, southeast England. The other project, a Scottish Power-led venture at Longannet in Scotland, is likely to be declared the default winner of the competition (indeed, at press-time, the government appeared to have stopped referring to the process as a "competition").
Progress with projects and funding is being made elsewhere, too, including Australia, Canada, Abu Dhabi and China. The US also continues to provide support – primarily by supplying financing for CCS – but is in danger of falling behind the EU because of the lack of federal climate legislation. This year, President Barack Obama established an Interagency Task Force on CCS to develop a federal strategy to speed its commercial deployment and work towards the government's target of bringing five to 10 commercial demonstration projects into operation by 2016. In August, the task force surprised no-one when it identified the main barrier to progress as the lack of comprehensive climate-change legislation.
Advances continue to be made in a piecemeal fashion, nonetheless: the government has resuscitated the FutureGen CCS technology project with $1bn in funding (see below). In addition, there are several enhanced-oil-recovery projects using CO2 around the country, individual projects such as a BP-led hydrogen-energy plant in California, as well as 12 regional CO2-sequestration partnerships – government and industry ventures that aim to identify suitable technologies, regulations and infrastructure for CCS.
Worldwide, meanwhile, the outlook is encouraging, even if the IEA's 2050 goals appear daunting. There are numerous projects in the planning and execution phases. In April 2010, when the Global CCS Institute (set up last year to accelerate "the worldwide commercial deployment of at-scale CCS") published its last CCS project-status report, it counted 80 large-scale integrated projects (LSIPs) at various stages of the asset lifecycle, an increase of 13 projects from 2009. These included nine operating large-scale projects, all with links to the oil and gas sector (although five of them do not monitor, measure and verify CO2 storage).
There are a further two projects under construction, also linked to hydrocarbons. Another 69 projects are in various stages of development planning, of which 44 are planned for the power sector (evenly split between the use of pre-combustion capture and post-combustion capture). There are also a few projects for other industries – one for iron and steel, one for cement and one for pulp and paper.
Most of the LSIPs are in developed countries (particularly in North America and Europe), with only a few projects starting to surface in emerging markets, such as China. Yet it is the developing world where CCS will mainly be needed, given that that is where most of the growth in fossil-fuel energy consumption will occur.
The integration of CCS into the UN' Clean Development Mechanism (CDM), an arrangement that enables industrialised countries to invest in emissions reductions in developing countries, would catalyse CCS deployment outside the OECD. Inclusion in the CDM "would give a very strong signal to China and developing economies to move in that direction", the IEA's executive director, Nobuo Tanaka, told Petroleum Economist earlier this year.
Gardiner Hill, special adviser to BP on CCS, agrees: not only would this allow some low-cost projects to go ahead, but it would also be a confidence boost for the CCS industry in general. However, it remains an uncertain prospect: UN negotiations have failed to reach a resolution on CCS being integrated into the CDM and opposition from some countries persists.
Despite that uncertainty, however, there are some encouraging signs. China, long identified as a big climate risk because of its high coal use, is building high-efficiency coal plants and has four small-scale CCS-related projects running. But the onus will fall on the developed world to lead the way, first by building demonstration projects and then by continuing to encourage research and development and establishing financing mechanisms – such as feed-in tariffs or the UK's CCS levy – to incentivise the large investments that will be needed.
The CCSA is optimistic projects will be developed. "This is a key technology for ensuring climate-change targets are met while maintaining security and diversity of energy supply," says Judith Shapiro, policy officer at CCSA. "We can't do without our reliance on fossil fuels and the steel, cement and chemical sectors will need to be decarbonised. We're absolutely optimistic because there is no choice. Just get on with it."
US pumps $1bn into FutureGen
The US Department of Energy (DOE) has revived the FutureGen clean-coal project with $1bn in federal stimulus funding. The venture – called FutureGen 2.0 – will be relaunched as an oxy-firing capture project, as opposed to an integrated-gasification combined-cycle plant, as previously envisaged.
Under the scheme, Ameren Energy Resources, Babcock & Wilcox, and Air Liquide Process & Construction will retrofit Ameren's 200 megawatt Unit 4 in Meredosia, Illinois, with oxy-combustion technology. The plant's new boiler, air-separation unit, CO2 purification and compression unit will deliver 90% CO2 capture and eliminate most sulphur and nitrogen oxides, mercury and particulate emissions.
Meanwhile, the DOE will form a partnership with the FutureGen Industrial Alliance to select, early next year, an Illinois site for carbon storage, where stored CO2 will be measured and monitored; the venture will also set up a geological-sequestration research complex at the site, which could eventually be used for regional CO2 storage. The Alliance will also build a CO2 pipeline network from Meredosia to the sequestration site, storing more than 1m tonnes of CO2 a year.