Calls for incentives to speed development of commercial scale plants

As the UK inches towards a 2014 large-scale demonstration of carbon capture and storage (CCS), scientists and MPs are urging for more incentives to get the costly technology commercial by 2020.

By mid-2009, one bidder should have won the UK government’s CCS competition, which was formally announced in November 2007. They’ll receive as-yet undisclosed funding to demonstrate a 400MW coal-fired power plant that captures waste stream emissions after fuel has been burned - in total burying about 2 million tonnes of carbon dioxide a year. The shortlist of contenders has recently been whittled down from 9 to four consortiums, led by BP Alternative Energy, E.ON UK, Peel Power and Scottish Power. 

The UK is one of a handful of countries in the world to have committed to supporting a commercial scale demonstration project. Yet a 22 July report from the UK parliament’s Environmental Audit Committee (EAC) found politicians ’extremely disappointed by the lack of progress’, and worrying that the possibility of CCS may be used as a ’fig leaf to give unabated coal-fired power stations an appearance of environmental acceptability’.

Why so slow?

International policymakers agree with the UK that if carbon capture is to dent carbon dioxide emissions in the next decades, demonstrations at commercial scale - corresponding to electricity generation of hundreds of megawatts - are urgent. The G8 nations have agreed to support the launch of 20 CCS plants by 2010, while the European Commission wants to encourage up to a dozen plants by 2015. 

’Actually, very few countries are doing well on CCS, which allows the UK to say it’s doing better than most,’ points out Jeff Chapman, of the UK’s carbon capture and storage association (CCSA). 

The potential market for CCS technology, particularly as the price of emitting carbon rises, means businesses are interested in starting large scale projects. But all demonstrations proposed around the world - in the UK, USA, Australia, China, Canada, Norway and Denmark - face a financial problem. The technology costs a lot of money, it cuts power output, and it is not proven - all of which means firms are reluctant to invest without assurance of subsidies. The costs CCS would add to running the winning UK competition plant from 2014-24, for instance, are about ?1.4 billion, according to a report for UK think-tank Policy Exchange, co-authored by CCS expert Stuart Haszeldine of the University of Edinburgh. Comparably, on 8 July the government of Alberta announced a C$2 billion (?0.98 billion) fund to support CCS demonstrations in the Canadian province. 

What’s more, points out Nick Otter, director of technology and external affairs at French-based engineering firm Alstom, concentrating on isolated demonstrations is only half the story: a whole new infrastructure for capturing and storing carbon (including building connecting pipelines and storage sites) - must be invested in if CCS is to be commercially available by 2020, as the EU hopes. 

Carrot and stick

The EAC insists the UK needs to lay down tougher measures to ensure it takes advantage of business opportunities a lead in CCS technology might create. ’[Government] must tell industry that carbon capture and storage will be required, and that coal-fired power stations will not be permitted to operate unabated,’ says EAC chairman Tim Yeo. 

But the UK’s Department for business, enterprise and regulatory reform (BERR) says there are no plans to mandate CCS, because this would stifle industry’s choice to a technology which is still immature. Instead, it hopes that the European emissions trading scheme (ETS), by gradually making it more expensive to emit carbon dioxide, will push the market towards CCS. Yet the EAC thinks the ETS may not make carbon expensive enough to get CCS cost-effective in the next few years. Incentives currently being considered by the European Commission include freeing up a ’fighting fund’ from ETS money specifically to support CCS.

The UK competition also focuses on a single variety of capture (post-combustion) because it can be retro-fitted to older coal-fired plants. But the CCSA’s Chapman says the UK should ensure a tranche of CCS demonstration plants by 2015. ’The UK government may be looking at FutureGen [the US flagship clean-coal project recently dissolved and re-launched as several smaller initiatives] and thinking, does that apply to us?’ he speculates. 

Richard Van Noorden