U.K. Outlines Carbon Capture Future

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. is aiming to extend its lead in the development of commercial scale carbon capture and storage (CCS) technology by outlining where it sees the market going.

The government has published the "Next Steps in CCS: Policy Scoping Document," outlining the progress and challenges facing the sector in the coming decade.

U.K. Secretary of State for Energy and Climate Change Ed Davey said: "We need CCS to be commercial in a decade. The prize is a big one--with CCS we can achieve our carbon targets more cheaply and support over 15,000 jobs per year by 2030."

He added: "The U.K. is leading the world on CCS and the Government wants to make sure that Britain will be in first place to export this knowledge to a decarbonizing global economy. The Government is strongly investing in developing a CCS industry in the U.K. that can compete on cost with other low carbon technologies. CCS will help us reach our goal of reducing carbon emissions by 50% from 1990 levels more cheaply by while supporting over 15,000 jobs per year."

The government is supporting two carbon capture and storage projects in the U.K. It has offered front end engineering and design (FEED) contract funding for the White Rose and Peterhead projects, worth around €125 million ($166 million). The White Rose Project is an oxyfuel capture project at a proposed new 426-megawatt (MW) co-firing plant next to the giant Drax power plant Selby, North Yorkshire. It is being led by Capture Power Limited, a consortium of Alstom S.A. (OTC:ALSMY) (Paris, France), Drax Group plc (LSE:DRX) (Selby, England), BOC and grid operator, National Grid.

The Peterhead project in Scotland is the world's first commercial gas-fired CCS demonstration project. Led by Royal Dutch Shell (NYSE:RDS.A) (The Hague, Netherlands) and SSE plc (Perth, Scotland), it is a 340 MW post-combustion capture unit that was retrofitted to part of an existing 1,180-MW Combined Cycle Gas Turbine (CCGT) power station. The goal will be to capture up to 10 million tons of carbon dioxide (CO2) emissions and transport it by pipeline offshore for long-term storage under the North Sea. For additional information, see February 25, 2014, article--Funding for First Gas Carbon Capture Project in U.K..

However, the government's scoping document came under fire from the country's Carbon Capture & Storage Association (CCSA).

"The CCS industry was anticipating a clear indication from Government on how it planned to deliver on its stated outcome of commercializing CCS in the early 2020s," said Luke Warren, chief executive of the CCSA. "Having now reviewed this document, we are extremely disappointed that Government has not taken this opportunity to outline how CCS projects outside of the competition can be developed. Government's role is to clearly set out the framework that will support investment in CCS. We are very concerned that this document fails to provide the necessary certainty for investors and significantly jeopardizes the Government objective of commercializing CCS in the 2020s."

High costs are among the key obstacles to the rapid development of CCS projects. In June, at the POWER-GEN Europe show in Cologne, Germany, it was clear that while energy companies supported the rollout of CCS, many agreed that it remains very expensive. The continual low price of carbon credits under the European Union's (EU's) Emissions Trading System (ETS) has not helped.

Peter Ratgen, head of E.ON Innovation, said: "It is currently 5 euros ($6.80) per ton cheaper to buy the [carbon] certificate than to take the mitigating action needed to reduce CO2 - this doesn't help the development of CCS but no doubt in the long term, it remains a key technology."

For additional information, see June 5, 2014, article - POWER-GEN Europe: Carbon Capture Viable but Too Expensive.

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