As noted in Blowout Week 142 a UK Parliamentary Advisory Group (PAG) recently published a report in which it claimed that carbon capture and storage was “critical” if the UK is to meet its CO2 emissions targets. The PAG is correct in so far as something needs to be done, but whether CCS is it is open to question. Accordingly, this post addresses the subject of whether CCS offers potential for emissions reductions on the necessary scale in the UK and concludes, as others have concluded before, that it doesn’t.
We begin with a summary of the status of CCS. We’ll get to the Parliamentary Advisory Group report later.
The CCS process:
There are a number of different CCS technologies in use, but the one that applies to electric power generation is the amine process, a chemical absorption process that separates CO2 from the flue gases emitted by natural gas and coal-fired plants. There’s a description of the process in the MIT Encyclopedia of Energy , and here are some excerpts from it:
Chemical absorption refers to a process where a gas, in our case CO2, is absorbed in a liquid solvent by formation of a chemically bonded compound. When used in a power plant to capture CO2, the flue gas is bubbled through the solvent in a packed absorber column, where the solvent preferentially removes the CO2 from the flue gas. Afterward, the solvent passes through a regenerator unit where the absorbed CO2 is stripped from the solvent by counterflowing steam at 100-120°C. Water vapor is condensed, leaving a highly concentrated (over 99%) CO2 stream, which may be compressed for commercial utilization or storage. The lean solvent is cooled to 40-65°C, and recycled into the absorption column. The most commonly used absorbent for CO2 absorption is monoethanolamine (MEA). The fundamental reaction for this process is:
C2H4OHNH2 + H2O + CO2 ↔ C2H4OHNH3 + HCO3-
During the absorption process, the reaction proceeds from left to right; during regeneration, the reaction proceeds from right to left. The cooling and heating of the solvent, pumping and compression require power input from the power plant thermal cycle, derating the thermal efficiency (heat rate) of the power plant. A schematic of a chemical absorption process for power plant flue gas is depicted in Figure 2.
Adding a CCS circuit to a new plant or retrofitting an existing plant involves substantial costs for construction of the circuit, pipelines and injection facilities, and because a significant fraction of the plant’s electricity is consumed by the CCS plant it also involves energy losses. MIT estimates a loss of 16% for a natural gas (CCGT) plant and 28% for a coal plant, which has the impact of reducing the effective capacity of a 1,000MW CCGT plant to 840MW and a 1,000MW coal plant to 720MW.
CCS plants in operation:
According to the Global CCS Institute there were fourteen “large-scale” CCS plants operating in the world at the end of 2015. This number is, however, misleading because only one of them – Boundary Dam, Saskatchewan – generates electric power. The other thirteen either process natural gas (in one case lignite) from which excess CO2 has to be removed to produce a saleable LNG product, or manufacture fertilizers or hydrogen from a natural gas input stream from which which CO2 can be segregated and sold. Twelve of the fourteen plants sell CO2 for enhanced oil recovery (EOR) or use it in-house for the same purpose. Only two (Sleipner and Snøhvit in Norway) have “dedicated” underground storage. Most of the plants have also received generous government support. The Air Products Steam Methane Reformer EOR Project in Texas received US$284 million of its US$431 million total project cost from the US Industrial Carbon Capture and Sequestration program, the Quest project in Alberta received CAN$865 million of its CAN$1.35 billion total project cost in funding from the Alberta and Canadian governments and the CAN$1.47 billion Boundary Dam project, which is government-owned, was 100% financed by the Saskatchewan and Canadian governments.
The Boundary Dam project:
The Boundary Dam 139MW CCS plant. As can be seen, it’s rather large
Boundary Dam is CCS’s flagship project, and indeed the only one that generates electric power. It uses the amine process to extract CO2 from the flue gases emitted by a 139MW coal-fired plant and sells it for EOR. The plant has been in operation since October 2014, and there are conflicting reports as to how well it has performed. According to a February 2016 report from the government-owned operator Sask Power :
The plant now has over 130 days of commercial operating experience logged, and has exceeded the expectations of those responsible for bringing the project to life. “The project is generating vast amounts of data never before available to scientists and engineers around the world, and the numbers are very impressive,” said Mike Monea, SaskPower President of Carbon Capture and Storage Initiatives. “People used to say there’s no proof that CCS works, a claim that is no longer valid,” Monea added. “Unit #3 is now producing affordable coal power for more than 100,000 homes and businesses for at least the next three decades, and it’s doing so 10 times more cleanly than other coal units and four times cleaner than a comparable natural gas unit,” said Monea. Approximately 135,000 tonnes of carbon dioxide (CO 2 ) have been captured since the plant officially launched on Oct. 2, 2014. The plant has the capacity to capture up to one million tonnes of CO 2 in 2015 and is on target to meet that goal.
But according to a November 2015 analysis from Saskatchewan Community Wind :
The power station makes money and hence need not be considered further. However the Carbon Capture unit is a whole different ballgame. The reality is that it is a $900-million (+ change) project which, every year for the next 30 years, generates an ‘operating’ loss of $4-million. Include the cost of borrowing and the final loss could be north of $2-billion. This is all summarised in the following table:
The analysis goes on to note “design & construction deficiencies”, that the plant is “operating well below capacity” and that the public has been misled:
… on the day the project was commissioned, and in numerous instances thereafter, SaskPower, Premier Wall and the Saskatchewan Government have implied that the project is fully operational and even performing better than expected. Subsequent facts have revealed these claims to be inaccurate and the parties concerned would have known this at the time.
More detail on Saskwind’s analysis is available here .
As to who is right, the truth is probably somewhere between the two. But if it cost CAN$917 million to retrofit a 139MW coal unit with CCS we are looking at CAN$6,600 ($US5,000) per installed kilowatt, which is uneconomic by any standard – unless of course the project can service the debt by selling the CO2 for EOR. But using the extracted CO2 to recover more oil, which then gets burned to produce more CO2, somewhat defeats the purpose of the exercise.
The Century project:
There is one plant that makes it without subsidies – Occidental Petroleum’s Century plant in Texas, which with a capacity of up to 8.4 million tonnes of CO2/year is presently the largest operating CCS plant in the world. Under a contractual agreement with Sandridge Energy, Occidental takes Sandridge natural gas feedstock containing 40% methane and 60% CO2 and segregates the two, whereupon Sandridge sells the methane and Occidental uses the CO2 for EOR, which according to MIT allows it to develop approximately 500 million barrels of reserves from currently owned assets at an attractive cost. 500 million barrels of oil is worth about $20 billion at current prices and the plant reportedly cost $1.1 billion, suggesting that the EOR cost is indeed attractive. However, this kind of symbiotic contractual arrangement is possible only in and around producing oil/gas fields. And of course Sandridge’s methane still produces CO2 when it gets burned.
CCS projects that never went ahead:
Offsetting the fourteen operating CCS plants are the CCS plants that have been cancelled, shelved or postponed. Ekopolitan – a sustainable energy website – provides a list of 25 proposed CCS plants that had been cancelled, shelved or postponed through June 2012 (there are more now but I don’t have an exact count) along with the reasons for their demise, which include:
- Lack of funding/inadequate subsidies
- Poor project economics
- Regulatory uncertainty
- Liability issues (who pays if the CO2 leaks)
- Resource problems (not enough CO2 feedstock, storage reservoir too small.)
- Public opposition
While all of these obstacles are potential show-stoppers, arguably the biggest is public opposition to onshore CO2 storage, which has already resulted in a number of CCS plant cancellations. An example is the Barendrecht project in the Netherlands, which was cancelled in 2011. Here’s an excerpt from a Nature article on Barendrecht:
The idea of injecting 400,000 tonnes of carbon dioxide under a shopping mall was always going to be a tough sell. And so it proved when the Dutch minister of economic affairs, Maria van der Hoeven, came to the small town of Barendrecht in December to explain why the government supported the proposal, made by the petroleum company Shell. At a public meeting in a packed theatre, attendees hurled jeers and threats at van der Hoeven and her colleagues, who were trying to convince the residents that the injection project was safe and environmentally beneficial. The conflict has escalated since then. Last month, the Dutch parliament voted to continue with the project, prompting Barendrecht’s deputy mayor, Simon Zuurbier, to threaten legal action against Shell. “It is foolish to experiment in a residential area,” he says. John Brosens, who chairs the citizens’ ‘No to CO2’ society, says: “We are against any underground storage of CO2 — wherever.”
It seems that public opposition to CCS has a lot in common with public opposition to fracking. And convincing the public that CCS is safe is arguably more difficult because all storage reservoirs are different and no one can say for sure that this particular one will never leak. (CO2 injection was in fact suspended in June 2011 at the In Salah project in Algeria because of “concerns about possible vertical leakage into the caprock”. An ongoing monitoring problem is still investigating the question of what to do about it.)
And then there’s the UK government’s November 2015 decision to cancel its £1 billion “CCS competition”. According to the House of Commons Energy and Climate Change Committee the government’s reason for cancelling the competition was based on a spending review that:
… (identified) the areas of spending that will achieve the best economic returns while delivering on the commitments to invest £100 billion in infrastructure by the end of the Parliament. This necessarily involved difficult decisions, including to no longer make available £1 billion capital funding to support the CCS Competition.
In short, the government didn’t think CCS was economically viable. (It has never been all that keen on CCS anyway. In 2007 BP abandoned plans to install CCS at Peterhead, citing delays in government support. In 2011 a proposed CCS plant at Longannet was scrapped because the government was unable to make a deal with the power companies. In September 2015 Drax abandoned its stake in a CCS project next to its Yorkshire coal plant because of the government’s decision to reduce subsidies.)
Future prospects for CCS:
CCS looks very much like a dead issue. It’s still not commercially proven in power plant applications, and even if it were there would still be problems with the economics. Operating experience and technological advances will probably lead to cost reductions, but these will have to be large indeed before CCS becomes economic.
Another problem is scale. The CO2 “saved” by the fourteen operating CCS plants working at full capacity (which they aren’t) amounts to 28.4 million tonnes/year, representing less than 0.1% of annual global CO2 emissions. According to the Global CCS Institute another 25 “large scale” projects in the construction or planning stage are scheduled for completion between 2016 and 2025, but even if they all get built they will still have a combined capacity of only 71 million tonnes of CO2/year, which would reduce annual global CO2 emissions by only 0.2% with all the plants working at full capacity. The position regarding electricity generation, which is CCS’s prime target, is even worse. Thirteen of the 25 new CCS installations will be attached to power plants, and adding these to Boundary Dam gives a total capacity of 22.2 million tonnes CO2/year, again representing less than 0.1% of global CO2 emissions.
Clearly orders-of-magnitude increases in CCS capacity will be necessary if CCS is to have any meaningful impact on global CO2 emissions. Equally clearly, such increases are not on the cards at this time.
The Parliamentary Advisory Group (PAG) report:
The PAG report is another example of what we have come to expect from UK government committees – heavy on prose and light on engineering. The report in fact contains only one significant number – an estimated CCS strike price of £85/MWh. It does, however, contain a numbered list of no fewer than 359 comments and recommendations.
Overall the report mirrors the green complexion of its authors (Chairman Lord Ron Oxburgh, Stuart Haszeldine, Bryony Worthington and others) and it concludes that what is needed to get CCS back on its feet is more government intervention. To this end it recommends setting up two new state-owned companies – “PowerCo” to arrange for delivery of the power stations and “T&SCo” to arrange for delivery of the transport and storage infrastructure – plus a “Heat Transformation Group” to assess “the least cost route to the decarbonisation of heat”. It adds some carrot-and-stick incentives to stimulate growth, such as industrial capture contracts (carrot) and a CCS obligation system that puts ”an obligation on fossil fuel suppliers … to sequester a growing percentage of the CO2”(stick). The intriguing question, however, is why the report was written at all, because all it did was rehash existing data. The answer is to be found in the first paragraph of Oxburgh’s introductory letter:
This report addresses the policy disconnect that arises between the previous Government’s cancellation of the carbon capture and storage (CCS) competition on grounds of cost and the advice it received from a number of independent policy bodies that CCS was an essential technology for least cost decarbonisation of the UK economy to meet international agreements (most recently Paris 2015).
Clearly the purpose of the PAG report was to get the new Government to recognize the errors of the previous Government and put CCS back on its list of competitive technologies. The results of the PAG study were therefore predetermined, although Oxburgh does his best to claim they weren’t:
I began this study, as I know a number of my colleagues did, quite prepared to advise you to write-off CCS as a part of UK energy policy. As you will see, our report recommends the opposite of this. I have been surprised myself at the absolutely central role which CCS has to play across the UK economy if we are to deliver the emissions reductions to which we are committed at the lowest possible cost to the UK consumer and taxpayer.
And while the PAG study was going on a parallel study was being conducted by the Committee on Climate Change (CCC), the results of which were communicated in a Letter to Amber Rudd dated 6 July 2016, about a month before the PAG report was issued. Oxburgh was pleased “to observe that there is a high degree of agreement with the recommendations of our report” (as if there had been no communication between the groups). The CCC report, however , does contain more than one number, so we will take a quick look at what it has to say.
And we find that it’s largely based on a report from the Energy Technologies Institute, which was “published mid-2015 with expectation that DECC commercialisation project(s) would proceed”. The conclusions of this report were summarized in a letter to the Chair of the CCC , and here they are:
Taking these bullet points one by one:
Successfully deploying CCS would save billions of pounds: ETI estimates 1-2 billion/year to 2020 increasing to 4-5 billion/year in 2040. The details of the what-if scenarios these estimates are based on are not given.
To deliver these savings requires around 10GW of capacity by 2030 – needs capital investment around £21-31 billion: The source of these estimates is again not given, but the numbers translate into £2,100 – 3,100 per installed kilowatt. It’s also unclear whether these estimates are for an entire new plant or just for the CCS installation, but either way they are significantly lower than the $US 5,000/kW cost of the Boundary Dam CCS system.
Strike prices below £100/MWh are achievable in the 2020s. Once again based on what-if scenarios with the source unspecified. The cost estimates are based on this ETI graphic showing decreasing levelized costs with time from gas-fired CCS plants:
10GW (captures and stores) around 50 million tonnes of CO2 per annum by 2030: This represents only about 10% of current UK emissions. The same savings could be realized by replacing ~12GW of coal with ~8GW of nuclear. It seems that CCS is not as critical to meeting the UK’s emissions goals as its proponents make it out to be.
Delay increases reliance on nuclear and offshore wind – increasing system risks and cost: It’s hard to see where ETI gets this from, particularly when CCS has no track record in power plant applications. (At present there is 386GW of installed nuclear capacity in the world, 12GW of offshore wind capacity but only 0.14GW of power plant CCS.)
Two other conclusions from the PAG report are worth noting.
The report sees hydrogen, an option that we considered and dismissed as uneconomic in this post, as a potentially major player:
Another option is to repurpose the recently renovated natural gas distribution network and use it to supply hydrogen to domestic heating and cooking appliances and industrial users. Decarbonised hydrogen can be produced by electrolysis of water and could open the way to a future fossil fuel free economy but for the immediate future would be produced from hydrocarbons with CCS.
Why does the report emphasize hydrogen? Because it recognizes that there is no technology that allows electricity to be stored economically for re-use over long periods:
In the comparison between national pervasive electrification … and the replacement of natural gas by hydrogen, there is one very important difference. Given the size of the UK winter peak, electrification means a significant increase in generating capacity will be needed but fully used for at a maximum a third of the time because there is no means of inter-seasonal electricity storage. (my emphasis)
We make progress.
The PAG report is a political document designed to induce the UK government to reverse its position on CCS – probably a forlorn hope – and written by a committee that was unlikely to conclude that CCS was dead in the water (all of its ten members have good green credentials and six of them are or have been involved with efforts to develop CCS, most notably Stuart Haszeldine, the world’s first Professor of Carbon Capture and Storage). It tells us nothing about CCS that wasn’t already known, and what was already known is not encouraging.