In front of the Public Liaison Committee in Parliament last week
the Prime Minister laid out the importance of carbon capture and
storage to the setting of a 2030 carbon target and in helping
resolve the current debate on how much gas in the UK it is safe to
burn. Just a month earlier an expert report concluded that
carbon capture and storage (CCS) could cut the annual costs of
meeting our carbon targets by up to 1% of GDP, or around £42
billion per year, by 2050. A pretty important finding, given the
background of rising electricity costs to the UK consumer.
Yet despite the words and reports the technology has made
disappointing progress over the last ten years. Despite high
profile initiatives in the UK and elsewhere, not one integrated,
large scale electricity plus CCS project has yet been implemented
anywhere in the world.
It is a technology with few friends and apparently no natural
owners. It's easy to see why. It's big and capital
intensive and it keeps unloved fossil fuels going. It has
none of the instinctive attraction of solar panels, wind turbines,
wave and tidal power devices.
You can't blame electricity generators for not liking it.
After all, it's a substantial additional capital cost on their
sites and reduces the flexibility of their plants. . In addition,
generators are not offered revenue support for the additional costs
in the way they are for wind farms and other renewables. So with a
weak carbon market, the bottom line commercial incentive for
electricity generators to build CCS is pretty well
non-existent.
While Shell for example, with government financial support, is
building a billion-dollar CCS project linked to oil sands
production in Alberta most coal and gas producers are wary about
whether electricity markets will deliver a decent commercial return
on their CCS investment. That might explain why their advocacy for
CCS is currently muted
But carbon capture and storage matters because, like it or not,
relatively cheap coal and gas will be the major fuels for the next
few decades in generating electricity. Unless CCS is used to
stop the resultant carbon dioxide getting into the atmosphere,
man-made climate change cannot be contained.
We also need "negative carbon" technology if the worst of
climate change is to be avoided. That means actually removing
carbon dioxide from the atmosphere. CCS together with sustainably
derived biomass for electricity generation, is by far the best game
in town.
Of course it's not that nothing is being done. The UK's Energy Bill has
provisions to support the technology. R&D costing £125 million
is underway and a £1 billion government competition is being run
for a demonstration project. This has linked up with European
effort to run demonstration projects. Unfortunately the
number of candidate projects has been diminishing and the years
have been slipping by. The goal of getting some tens of
demonstration projects running worldwide by 2020 now looks highly
improbable.
So what must be done? We all must get real and get behind
the technology. Government and industry must work together
urgently to build the essential demonstration projects over the
next few years. The carbon market, post-2020, must be underpinned
now with very strong signals for a carbon price that will stimulate
all kinds of low carbon investment, including CCS. And the
Government must continue with RD&D to reduce costs and
risks.
The UK has much to gain. We have two of the world's top oil
companies skilled in the injection and storage of carbon dioxide.
The UK is home to a highly capable process engineering industry.
And we have a very strong university research base i to help
optimise the current technology and reduce costs . The
economic up sides are there for the taking. Research
co-ordinated by the Carbon Trust has found that
CCS industrial development could contribute £3-16bn to UK GDP
cumulatively to 2050.
But needless to say we are not alone. The United States are
world leaders where capture technology has been running in
large-scale plants for decades and the CO2, based on a
well-established 6,000km pipeline network, is used both in fizzy
drinks and enhanced oil recovery. The US government is sponsoring
major research into improving CCS technologies. Governments and
companies in Asia also recognise the commercial opportunities. But
we do have the capacity to compete provided we get on with it
now.
So to help save the planet, keep down the costs of low carbon
energy and to create a new and exciting commercial opportunity for
British industry, let's learn to love CCS - before it's too
late.