THE UK’s Carbon Capture and Storage Association (CCSA) has launched a new report highlighting the key lessons learned by those in the country seeking to develop CCS projects.
The UK’s national CCS competition to develop a full-chain CCS project ended in November 2014 when the government said that the £1bn (US$1.4bn) ring-fenced capital budget was being withdrawn. The two projects in the competition, Peterhead CCS, being developed by SSE and Shell, and White Rose CCS, being developed by GE, Drax and BOC, were abandoned as a result. The authors of the CCSA report, Lessons Learned – Lessons and Evidence Derived from UK CCS Programmes, 2008–2015, interviewed those developing the two projects, as well as others interested in CCS. Patrick Dixon, former expert chair of the Office for CCS in DECC, was the primary author. The report was collated in response to calls from industry to ensure that the lessons learned were recorded to help inform the future development of CCS.
“The report highlights that there were no technical barriers to delivery but that any future CCS programme will have to address a number of outstanding commercial challenges. The report also clearly shows that CCS has significant potential for rapid cost reduction,” said Luke Warren, chief executive of the CCSA.
The report identifies 36 lessons which should be learned from the competition, grouped under seven headings: deliverability, costs and outcomes, the “value for money” case, CCS business model, storage risks and long term storage liabilities, storage capacity and integrity, and process for future dialogue and project development with the government.
A major problem with both projects was the potential costs of electricity produced, which was estimated at about £170/MWh, much higher than that for renewables or nuclear energy. The report notes that the projects were responsible for constructing oversized CO2 transport and storage infrastructure suitable for subsequent projects as well. The authors note that future phase two projects, using this infrastructure, would bring down the costs significantly, by 60–80%. Assessments of the costs and benefits of CCS projects did not take into consideration potential benefits of using the CCS infrastructure for industrial CCS as well as power generation.
According to the report, the full-chain private sector business model is unlikely to work, because offshore storage is unattractive to investors due to uncertain costs and liabilities. The government was unwilling to accept the financial risks of developing, operating, monitoring and decommissioning CO2 stores.
The report found that the White Rose and Peterhead sites are suitable and ready for developing, but also that there “is no discernible appetite from any developer to participate in a further CCS competition.” Negotiations to develop “bespoke” CCS projects between the government and developers could, however, be a way forward.
“The government has confirmed its intention to develop a new approach to CCS, and we look forward to working with them to build on these lessons and ensure the successful delivery of CCS,” said Warren.
Visit The Chemical Engineer website to read an interview with Lord Oxburgh, former chair of the CCSA.
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