Ambitious targets

Chris Davies, a leading Member of the European Parliament, called at the beginning of May for Europe to mandate carbon capture and storage for all new power stations from 2020. In doing so, he excited some controversy – is this really sensible, some argue, given that the technology is not yet proven? Even if the technology works, doesn’t carbon capture and storage just store up problems for the future through perpetuating reliance on fossil fuel for power generation?

The European Parliament is currently working its way through a wide ranging package of measures on energy and climate change – what President Jose Manuel Barroso has characterised as “20/20/20” – to deliver a 20 percent reduction in greenhouse gas (GHG) emissions, and 20 percent of final energy consumption from renewable sources, by 2020.  Moreover, if there is agreement globally on tackling emissions at the Copenhagen 2009 Conference, the European Union (EU) will up its GHG reduction target to 30 percent by 2020. 

What are the prospects for this EU package?  Will it be enacted, and will it work? The indications are that many EU countries, including some of the biggest, are determined to deliver this ambitious package by early 2009 – ahead of the appointment of a new European Commission, EU Parliamentary elections, and the Copenhagen Conference later that year.

As well as the proposals on renewable energy, the package will strengthen and prolong the Emissions Trading Scheme, and regulate the transport and storage of CO2 captured from power stations: described by Nicholas Stern in his landmark 2006 report on the economics of climate change as a “crucial” technology.

According to the International Energy Agency, two fifths of carbon emissions are generated from electricity production, and this is set to double by 2030, with much of the growth in emerging markets burning cheap, accessible hydrocarbons, mainly coal. If the EU is to lead the fight against global emissions, decarbonising power generation should be its central technology objective. Here, carbon capture and storage (CCS) will be essential, though of course it is not the only action we can take.

Efficiency, in how we use energy and also how we produce it, is an obvious priority. Well∞targeted efficiency measures contribute to energy security and are very cost effective – many can save money.  Increasing efficiency in power plants from the world average, around 30 percent, to the 50 percent plus achievable now with advanced steam plant, would reduce CO2 emissions by over 40 percentage points.
 
Another priority is renewable generation. The ambition in the EU plan, in the way in which effort is shared among member countries, is impressive, with individual country targets ranging from 10 percent to 40 percent. Delivering on it will require tenacity and courage. Even with this growth in the share of renewables, and looking forward to the nuclear renaissance which has begun in some countries, the EU will continue to depend largely on fossil fuels for power generation, as will the rest of the world. And when you realise that 60 percent of the power stations which will be operating in 2030 have already been built, you can see we have to find a way of neutralising their carbon dioxide emissions into the atmosphere.

Nature, actually, has done the hard work for us.  Just as our use of hydrocarbons bred in geological formations has contributed to the current scale of CO2 emissions, so our use of such reservoirs can help solve the problem in future.  Imagine the disappointment of the oil engineers who drill for oil or gas and find instead CO2 – having lain there undisturbed for millennia. The North Sea is the scene of the world’s first pilot project to store CO2 in undersea reservoirs. Since 1996, one million tons a year of CO2 have been successfully stored by Statoil, the Norwegian oil company, at a natural gas rig in the Sleipner field in the North Sea.  Some estimates put the potential for CO2 storage in the North Sea alone at hundreds of years worth of Europe-wide emissions. 

So much for storage. How though do you separate the carbon dioxide at the power station? Three major technologies are under development to capture the carbon dioxide before storage: pre∞combustion, oxy-firing and post-combustion. Alstom is developing oxy-firing and post-combustion technologies which (unlike pre-combustion) can be retro-fitted onto existing plants. Oxy-firing burns coal in oxygen, instead of air, producing a waste stream composed of carbon dioxide and water from which the carbon dioxide is easily separated for storage.  Post-combustion techniques use chemical solvents, sometimes with a physical membrane, to strip the carbon dioxide from the flue gases.

Worldwide, several projects are under construction, and some are already operating, to demonstrate these capture technologies, with post∞combustion the most advanced. Alstom believe we will be in a position to offer a commercial post-combustion product into the market by about 2015 – assuming there is a demand for it, which will depend on the regulatory framework and the price of carbon, and assuming that government support is made available for demonstration projects.

The challenge is being able to demonstrate at commercial scale projects which integrate the three elements of capture, transport and storage of the gas.
 
Such a project, taking the carbon dioxide from say a 300MW power station, will cost several hundred million euros in addition to the normal cost of a power station. That certainly seems to be the assumption underlying the competition launched by the UK government, with public funds for the additional cost, to come on stream in 2013.  Clearly, companies are not going to be able to take on such a huge risk on their own, particularly when the future market can only be created by government action, whether through mandation, carbon pricing or a mixture of both.  The EU has recognised that several such projects are needed to showcase different technologies, operating under differing local circumstances.

Experience of new technology deployment suggests this demonstration phase will bring costs down substantially (through “learning by doing”). Beyond that, you need widespread deployment to realise economies of scale.

Will the current EU package of measures be enacted?  Probably yes, though with (inevitably) compromises to meet individual countries’ concerns. Will it provide for mandation of CCS, as Chris Davies originally proposed? Reaching a consensus on mandation seems highly unlikely on this round.

But if this fledgling industry is to be brought to maturity – factories built to manufacture the equipment, supply chains established, skilled people in place – mandation will almost certainly resurface as an issue at some stage. All the evidence suggests, moreover, that by the 2020’s, CO2 could be captured from new power stations fitted with the technology at probably a lower cost than the CO2 saved by switching to wind power. Retrofitting existing stations would cost more but would still probably be comparable with all but the best wind power.

That perhaps leads to the real question ∞ not can we afford to use CCS, but rather can we afford not to, as scientific evidence increasingly reveals the risks of serious and possibly irreversible effects of climate change?