The UK Government’s plans to develop carbon capture and storage (CCS) technologies to reduce carbon emissions have received a cautious welcome. A new report concludes that most of the uncertainties facing these technologies can – in principle – be resolved

‘Carbon capture and storage: realising the potential?’ is the culmination of a two-year project funded by the UK Energy Research Centre (UKERC). The report assesses the technical, economic, financial and social uncertainties facing CCS technologies, and analyses the role they could play in achieving UK energy policy goals. Its publication follows an earlier announcement of a new long-term strategy for CCS by the Department of Energy and Climate Change, including the re-launch of the UK’s £1 billion competition to develop commercial scale CCS projects.

The report’s lead author, Professor Jim Watson, director of the Sussex Energy Group at the University of Sussex says: “We still don’t know when CCS technologies will be technically proven at full scale, and whether their costs will be competitive with other low-carbon options. So it is vital that the Government’s commitment to these technologies leads to several full scale CCS projects as soon as possible. Only through such learning by doing will we know whether CCS is a serious option for the future, and how the technical, economic and legal uncertainties currently facing investors can be overcome.”

The report draws lessons from history, and concludes that previous technologies have faced similar challenges to those affecting CCS technologies today. In the past, such uncertainties have been resolved sufficiently for these technologies to succeed. While care is needed when learning from history, the findings offer some optimism that, given the right actions by government and industry, the uncertainties surrounding CCS can also be dealt with.

But even if rapid progress is made with the UK’s re-launched demonstration programme, which aims to have CCS plants operational later this decade, difficult choices will remain for government and other decision makers, say the authors. The report identifies four key areas where such choices need to be made:

* Deciding whether to keep options open, or close them down. The French government focused on one technological variety early on for its nuclear programme. Doing this for CCS may help speed up development, but there is a risk of picking inferior technology. The authors caution that it is too early for government and industry to close down on a particular variant of CCS technology. They welcome the plans for several substantial demonstration projects which will help to identify which variants of CCS technology can be scaled up successfully.

* Designing financial support for effective CCS demonstration and deployment. A regulatory approach that makes CCS compulsory for all fossil plants will only work if the technology is more advanced, and the additional costs can be passed onto consumers. CCS technologies are not yet at this stage. In the mean time, the government should ensure that industry maximises efficiency and minimises costs of new CCS plants. History shows that not all demonstrations will perform as expected, and government should ensure that lessons are learned from successes and failures.

* CCS deployment is a marathon, not a sprint. Developing new energy technologies can take a long time, and the process is often far from smooth. The report shows that costs do not necessarily fall in the way supporters hope – and can rise for several years before they come down, as technologies are scaled up. This requires patience. Government also needs to ensure it has an independent capability to assess costs to inform future decisions about whether to continue with public funding for CCS or to divert resources to other low carbon options.

* Dealing with storage liabilities. The report shows highlights lessons from UK nuclear waste management policy to show how complex liability arrangements for CO2 storage could be. For CCS, a balance needs to be struck between limiting liabilities for investors and protecting the interests of future taxpayers. Agreements will be needed on where this balance should lie, and what arrangements are needed to fund and insure against potential liabilities.

Professor Watson comments: “It will be vital to keep options open in the government’s CCS commercialisation programme. Whilst it is welcome that the government has learned from the mistakes of the past, and now plans to support a number of CCS technologies, there is a long way to go before CCS is a reality at full scale. Complex negotiations with industry lie ahead.”

A collaborative project bringing together three of Europe’s leading utilities and wave energy technologies provided by Aquamarine Power and Pelamis has been selected by the UK Government for a major European funding bid.

The Pentland Orkney Wave Energy Resource (POWER) project is the only wave energy bid being put forward by the UK Government to the European Investment Bank (EIB) for consideration in the first round of the EU’s New Entrant Reserve (NER300) scheme – a fund worth around Eur4.5 billion to support carbon capture and storage (CCS) and innovative renewable projects across the European Union.

The POWER project aims to deliver the world’s first large-scale grid-connected demonstration of a wave energy farm with a total generation capacity of 28 MW.

If successful, the project will comprise ten near shore Aquamarine Power Oyster 3 devices and 24 offshore Pelamis machines within the Pentland Firth and Orkney Waters leasing area, operating in multi-device array configurations. Both of these technologies are leaders in their field, having been successfully demonstrated at small scale. The project will have a single point of connection to the onshore grid.

The POWER project and bid, which was structured and coordinated by the Scottish European Green Energy Centre (SEGEC), is a collaboration by ScottishPower Renewables, E.ON Climate & Renewables and Brough Head Wave Farm – a joint venture between SSE Renewables and Aquamarine Power.

Data and learning captured during the development and operation of the project will be used directly to accelerate the commercialisation of wave energy technology and the development of the industry in Europe.

By providing a final pre-commercial large-scale demonstration of Aquamarine Power near shore Oyster 3 devices and offshore Pelamis machines within the Pentland Firth and Orkney Waters development area, the POWER project would be a significant milestone in the development of the wave energy sector in Europe and worldwide.

Scotland can realise the employment, economic and environmental benefits of carbon storage. A consortium of Scottish Government, industry and researchers has shown that rocks deep beneath the Moray Firth are capable of storing decades of CO2 output from Scotland’s power stations. This emerging Carbon Capture and Storage {CCS} industry could create at least 13,000 new Scottish jobs by 2020.

These are key findings of the report, ‘Progressing Scotland’s CO2 storage opportunities’, which was recently published.

Detailed research calculates that rock, known as the Captain Sandstone, buried more than half a mile beneath the Moray Firth could store at least 15 years’, and potentially a century’s worth of CO2 output from Scotland’s power industry. Professor Eric Mackay from Scottish Carbon Capture and Storage (SCCS), says “This is an exciting and landmark moment in the development of carbon capture and storage. The Captain Sandstone is just one of many rock formations filled with salt water in the central and northern North Sea. We have shown that this is a feasible site that could store massive amounts of CO2, helping the UK meet its targets for carbon emissions reduction. The future potential for this and other areas of the North Sea is immense.”

The SCCS research, funded by Scottish Government and a group of businesses within the energy sector, also showed that carbon capture and storage could create 13,000 jobs in Scotland by 2020, and another 14,000 elsewhere in the UK, spread across a wide range of skills. This would increase in subsequent years. Properly developed, the UK’s share of worldwide carbon capture and storage business could be worth more than £10 billion a year by around 2025.

Professor Mackay continues: “Our research indicates CO2 output captured from a fossil fuel-fired power station, like the existing plant at Longannet or Peterhead or any future capture projects such as at Hunterston, could be stored beneath the North Sea. The unique combination of government, industry and research capability provides Scotland with the opportunity to lead the way in the development of CCS. We look forward to further assessment of this and other parts of the North Sea to maximise the economic benefits.”

Scottish Energy Minister Jim Mather says: “This latest research further strengthens Scotland’s position as the number one location for CCS technology development and deployment in the world. In depleted oil and gas fields and in its natural geology, the North Sea has an amazing carbon storage potential – the largest offshore storage capacity in Europe – offering up the prospect of thousands of new low carbon jobs being created in Scotland as CCS technology develops.”

Scotland’s potentially massive offshore CO2 storage capacity is of European significance. The European Union has specified that three of the eight CCS demonstrator plants that it will fund under its multi-billion euro demonstrator programme must inject into saline aquifers. The results from this study place Scotland in a strong position to secure future EU support for more detailed assessment of CO2 storage in saline aquifers.

Scotland is to design a blueprint to ensure carbon capture and storage technology (CCS) can be implemented effectively around the world. The Global CCS Institute has asked Scotland to develop a toolkit to help nations test the strength of regulations and the permitting process, build knowledge and test public engagement, ensuring CCS can be safely rolled out.

The move is a vote of confidence in Scotland’s forward thinking approach to carbon capture and storage, a way of safely storing emissions from fossil fuel power stations.

The work will be carried out by the Scottish CCS Centre in Edinburgh, supported by the Scottish Government and the Scottish European Green Energy Centre. The toolkit will be promoted by Global CCS Institute around the world and the work is being used in various European initiatives.

“Scotland is at the forefront of global efforts to develop CCS, with the largest offshore storage capacity in Europe in the North Sea and the UK’s leading candidate for a demonstration project at Longannet,” says Scottish Energy Minister Jim Mather. “Alongside one of the highest renewable electricity targets in the world, we need to reduce emissions with carbon capture and storage technology on fossil fuel power stations. To make this a reality, we have to ensure it is safely and appropriately regulated.”

The European Commission has authorised The Netherlands under EU state aid rules to provide a €150 million grant for a CO2 capture and storage (CCS) demonstration project to a joint venture between E.ON and GDF Suez. The joint venture will construct a CO2 capture plant in the Rotterdam port area with the aim to capture part of the CO2 emitted by E.ON’s coal-fired power plant and transport it to a depleted gas field in the North Sea for storage.

The CCS project has also been allocated €180 million EU funding under the European Energy Programme for Recovery (EEPR). The EEPR is a financial instrument whose overall objective is to stimulate recovery from the downturn affecting the EU economy, while bringing the EU closer to meeting its energy and climate policy objectives. The project is also part of the European CCS Demonstration Project Network which will foster knowledge sharing of CCS demonstration projects.

A 250 MW equivalent CO2 capture plant, expected to capture annually 1.1 million tons of CO2, will be built next to and connected to E.ON´s coal fired Maasvlakte Power Plant 3. The captured CO2 will be transported through a pipeline to a nearby depleted gas field in the North Sea where it will be stored.

The development of CO2 capture and storage is part of the 2008 climate and energy package for reaching the EU 2020 environmental objectives. The Commission concluded that the Dutch State aid is an appropriate and proportionate measure necessary to achieve an objective of EU interest.