The Case for EU Demonstration of Carbon Capture and Storage Technology

In recent months, particularly in the EU, the prospect of a major demonstration of CCS across various sectors and employing a variety of technologies has slipped badly. Perhaps the bottom was reached when in the EU not a single CCS project was awarded funding under the first round of the NER300, even though this mechanism was originally proposed for CCS (insertion into Article 10a of the ETS Directive, see below). Given that the second round has been announced and EU allowance prices are now even lower, the chance of a successful project under the NER300 must be close to negligible.

Up to 300 million allowances in the new entrants’ reserve shall be available until 31 December 2015 to help stimulate the construction and operation of up to 12 commercial demonstration projects that aim at the environmentally safe capture and geological storage (CCS) of CO2 as wellas demonstration projects of innovative renewable energytechnologies, in the territory of the Union.

Yet this is a technology that can make a real difference to the problem of rising levels of CO2 in the atmosphere. I went further than this is my recent posts arguing that it is the only technology that can satisfactorily resolve the issue. The recently released Shell New Lens Scenarios show the impact of delay, even in a world with rapid deployment of renewable energy and its eventual domination of the energy system (Oceans scenario). The Mountains scenario sees CCS getting going in earnest in 2030, with an important start-up phase which sees some 20 million tonnes per annum of CO2 stored in 2020, rising to 400 million tpa by 2029. This means that by  2025 some 25 GW of power generation fitted with CCS is needed â€" there is effectively none today.

At the Gleneagles Summit in 2005, G8 leaders committed to “work to accelerate the deployment and commercialisation of Carbon Capture and Storage technology”, with a further recommendation at the 2008 G8 Summit in Japan that “20 large-scale CCS demonstration projects should be launched by 2010”. Similarly, the EU Heads of Government declared the need for 12 projects in the EU by 2015. So far, four big projects are operating and two further projects are under construction, although all are linked with process emissions of industrial facilities (various natural gas projects, a synfuels plant in the USA and the Quest oil sands project) rather than the power sector. A number of much smaller R&D projects are also in various stages of development. The G8 call was arguably linked with the political desire to limit global emissions to meet a 2°C goal (or a trillion tonnes of cumulative carbon emissions), which in itself requires CCS deployed on a major scale. As such, it is hardly surprising to see the IEA now telling us that 2°C is pretty much off the table. In the Mountains Scenario, which sees CCS finally getting going some 15 years later than the G8 call, 2°C isn’t met either, although the overshoot, while a concern, isn’t dramatic.

The lead time for any new energy technology, from pilot to the beginnings of commercial deployment and then to materiality in the energy system (>1%) typically takes some 25-30 years. I wrote about this some time ago on the back of a Nature article submitted by a colleague in our scenarios team. The various stages within this process are important, including the need for commercial demonstration. This step begins to de-risk the technology for future business investment, bringing some level of certainty to expected capital expenditure and ongoing operating costs in particular. For CCS there are other benefits as well;

• A demonstration programme which comprises several projects begins to establish some infrastructure, which in turn lowers the cost for additional projects. Perhaps the best current example of this is in Rotterdam, where there are proposals for a CO2 pipeline loop in the industrial area of the city, connected to offshore storage in the North Sea. Given the large number of installations in the area, in combination with those further up the Rhine, real synergy is possible.
• In some regions (and Europe is one, Germany in particular) there are growing issues with public acceptance of CO2 storage, even though there is little ongoing storage underway. A demonstration programme offers the opportunity to allay the fears related to storage.
• Demonstration improves best practice in the operation of a CCS facility and related storage, particularly in a major grid dispatch situation.

Recently, policy makers in Brussels have started to voice the opinion that the EU could follow rather than lead on CCS. While they recognize the important role of the technology over the long term, they are questioning the need for the EU to invest and demonstrate in the short term. But waiting for others risks further delaying the deployment of this technology, which in turn is directly linked to the eventual accumulation of CO2 over this century and therefore temperature rise. Further, there are real EU projects on the drawing board today waiting for some stimulus, so doing nothing would be a real lost opportunity. The Commission is expected to publish a CCS paper later this month.

My good friend, Robert Swan, a polar explorer and environmentalist, often finishes his presentations with the quote;

“The Greatest Threat to Our Planet Is the Belief That Someone Else Will Save It.

It’s a good quote, even though it is a bit on the melodramatic side for me. But an appropriate CCS version might be:

“The real threat to the deployment of CCS is the assumption that someone else will demonstrate it.”