What lies beneath
Trapping CO2 underground is now a reality, and it seems a sensible proposition in the face of climate change. But putting the gas down below can allow companies to get access to even more fossil fuels. Mike Scott reports
Carbon Capture and Storage (CCS) is either the key to decarbonising the global energy system or a smokescreen to allow utilities to continue to build polluting coal-fired power stations – depending on your point of view.
The aim of CCS is to reduce the carbon emissions from fossil fuel power plants and other heavily emitting installations such as steelworks and cement factories and it involves three elements – capturing the carbon, transporting it and storing it.
Although there are no full-size CCS plants in operation, all of the technology necessary already exists – it has just not been put together to create CCS.
Capture is the most complex and expensive stage, accounting for about 80% of the cost of CCS. There are three options:
- Pre-combustion capture converts the fossil fuel (the technology can be used for coal, oil or gas, and indeed for biofuels) into a mixture of hydrogen and CO2 and then separates the CO2, leaving the hydrogen to be used as a clean CO2-free fuel
- Oxyfuel capture burns the fossil fuel in pure oxygen rather than air. This raises the combustion temperature and produces CO2 and steam. The CO2 can be trapped by condensing the steam
- Post-combustion capture removes CO2 from the exhaust gases using solvents
Pre-combustion is already used to make hydrogen, mainly for ammonia and fertiliser production and for use in petroleum refineries, while post-combustion is used to purify contaminated sources of natural gas. Oxyfuel for CCS remains at the research stage but has the potential to remove almost all the CO2 in the coal, according to Swedish power group Vattenfall. The process has long been used in industries such as cement, aluminium smelting and glass-making.
For all the technologies a number of challenges remain before CCS becomes viable. Most seriously, CCS reduces the energy output of the installations it is applied to and therefore increases the cost of energy. Olivier Appert, vice-chairman of the European Technology Platform for Zero Emission Fossil Fuel Power Plants, told a recent conference on CCS in Brussels that currently, CCS added up to £10.70 per MWh to electricity prices for an oxyfuel coal-fired power plant and up to £55 per MWh for a gas-fired plant. Costs would be expected to come down over time.
Transport of the CO2 is relatively straightforward, but will involve significant investment in dedicated CO2 pipelines or ships to deliver the gas to the storage sites. There are a range of storage options, the most inviting being to inject the gas into ageing oil fields. This increases the pressure in the field and forces more oil out of the well, in a well established process known as enhanced oil recovery (EOR). The obvious advantage of this is that it provides a market for the CO2.
Another less-developed money-making use of CO2 is a similar process but involving coal. The gas is injected into coal seams that are unviable because there is too much methane in them, forcing the methane to the surface where it can be captured and burnt to produce power. The CO2 remains trapped in the coal bed.
The gas can also be stored in depleted oil or gas fields and other geological formations, or in saline aquifers. But at the moment there is no financial gain from doing so. Norwegian oil company Statoil has been storing about 1M tonnes of CO2 a year in a saline aquifer under the North Sea for the last decade, and has just reported that there are no signs of leakage.
Most CCS activity is taking place in developed countries. According to New Energy Finance, there are eight CCS projects worldwide, spread between Europe, North America, Japan and Australia. However, the main justification for CCS is the use of coal in emerging markets. The International Energy Agency forecasts that by 2015, China and India alone will need 800,000MW of generating power more than they had in 2006 to run their expanding economies – and 90% of it is likely to be coal-fired.
Graeme Sweeney, in charge of future fuels and CO2 at Shell, told the Brussels conference: “We can have coal with CCS or coal without CCS, but we will have coal and that is not our choice.” As a result, added EU energy commissioner Andris Piebalgs: “CCS is necessary if we are serious about fighting climate change, it’s as simple as that.”
The UK is currently assessing entrants to its CCS competition – the government will fund 100% of the CCS element in the UK’s first commercial-scale power plant equipped with CCS. But it limited entrants to post-combustion technologies because these will be suitable for retrofitting to existing coal-fired plants around the world. The winner is due to be announced soon – entrants included RWE, Eon and Hydrogen Energy, a joint venture between BP and the mining group Rio Tinto.
However, the race is on, with ExxonMobil looking to build a plant in Wyoming and a trial plant up and running in Australia. The European Commission has said it wants 12 demonstration plants to be running around Europe by 2015, but it remains unclear how these will be paid for. BP pulled out of a project in Peterhead, Scotland, because the UK government would not fund it. And the industry – which can be loosely defined as the oil and gas companies, electricity utilities and power plant equipment makers – is reluctant to commit to projects. This is because CCS is unproven and many issues remain unresolved.
In the long term, the commission believes the EU Emissions Trading Scheme will provide the incentive for CCS. But at the moment, it concedes, the carbon price of about £20 is not high enough. Mark Lewis of Deutsche Bank says that a price of about £32 per tonne would be needed to make CCS viable. It is widely agreed that the first movers in CCS will need some help. “CCS is in its infancy and so it is very weak,” said Appert.
But where this money will come from remains uncertain. The industry will pay a proportion of costs, according to Gardiner Hill, chairman of the CO2 Capture Project. But it will need incentives from policy makers. Piebalgs is reluctant to commit the Commission to paying, but there are doubts that enough member states will put up the funds. The Commissioner is also reluctant to make CCS mandatory until the technology has been proven.
While many see CCS as a vital technology, not everyone is so enthusiastic. Plans such as Eon’s proposal to build a new carbon-capture-ready coal-fired power station at Kingsnorth in Kent are “a dangerous distraction” according to WWF, RSPB, Greenpeace and Friends of the Earth. While WWF concedes that CCS “could play a significant role as a bridge to a truly low-carbon, sustainable energy system”, there is no guarantee that capture-ready power stations would ever be fitted with the technology. Kingsnorth would produce 8M tonnes of CO2 a year and up to six more coal-fired plants are planned for the UK, which would produce more CO2 than all of the energy efficiency measures in the 2007 Energy White Paper, says WWF.
Gavin Edwards, head of climate and energy at Greenpeace, says the EU’s targets on cutting emissions can be reached without CCS. He adds: “CCS reduces efficiency by so much that for every four power stations you fit with CCS, you will have to build another one to make up for the reduction in efficiency.” There are still questions to be answered over storage, he continued, while CCS is years away from making any impact on emissions and in the meanwhile is diverting resources away from solutions that can make a difference now such as renewables and energy efficiency.
Environmental groups have called on governments to: focus on renewables and energy efficiency; introduce greenhouse gas emission standards for new power plants, which should be tightened significantly if CCS technology proves to be viable; introduce emission standards for existing plant from 2020; and introduce strong legislation on CO2 storage and transport.
This last demand is being met at EU level where there is a proposed directive on geological storage of CO2 and plans to incorporate CCS into the ETS by allowing emitters using CCS an exemption from their cap. Chris Davies MEP, rapporteur for the Directive in the European Parliament, wants a ban, by 2015, on any new fossil fuel power plant that cannot capture and store 90% of its CO2 emissions. All existing plants should be retrofitted with CCS technology by 2025, he adds. Davies also wants installations capturing carbon to get tradable credits for every tonne of CO2 they store.
There is a stark contrast between the calls for immediate action to encourage the technology, and the striking lack of action from policy makers and the industry. “There are still disagreements on quite fundamental points,” said Henry Edwardes-Evans, managing editor of Platts Power in Europe, “even though the message coming from industry and the commission is that we need to move as soon as possible.” If CCS proves to be viable, it could lead to more coal-fired power plants being built in the UK and could have a huge effect on emissions from power stations around the world. But it is a long way off yet.
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