Learning by doing and market mechanisms: the keys to CCS

7 August 2008


In a remarkably short time, as we have observed before in these pages, CCS (carbon capture and storage, formerly known as sequestration) has gone from academic curiosity to mainstream. These days no high profile gathering of political leaders seems complete without some sort of statement touching on climate change and mentioning the need for further research on CCS. The declaration emerging from the September meeting of the Asia Pacific Economic Co-operation (APEC) forum in Sydney, for example, said the APEC leaders had agreed to promote activities "in the field of clean coal use and carbon capture and storage."

There are some very good reasons why CCS has risen so dramatically up the political and technological agenda – for one thing it offers scope for substantial cuts in CO2. The EC funded ZEP (the European Technology Platform for Zero Emission Fossil Fuel Power Plants) – a "broad coalition of stakeholders", which has rapidly emerged as an important focus for the promotion and development of CCS in Europe – thinks that "CCS, if fully developed and commercialised in all industrial sectors could reduce CO2 emissions in Europe by as much as 50%." They may be a little biased in favour of course, but CCS certainly shows considerable potential, and therefore could be very big business indeed.

If we are serious about reducing anthropogenic carbon dioxide, while at the same time wanting a secure and diverse energy supply system, then – for the foreseeable future at least – we must learn to embrace CCS as an inevitable and intrinsic feature of power generation technology.

When it comes to actual projects there have nevertheless been a few high profile setbacks in recent months, notably cancellation of Peterhead and Draugen, and Saskpower's decision to go for simple cycle natural gas rather than the bother and expense of pioneering clean coal with provision for CCS – perhaps further evidence of a renewed "dash for gas" in some regions of the world, not least in the UK.

Speaking of setbacks and the UK, where there are about ten CCS projects of one sort another under discussion, some capture and storage proponents have been greatly disappointed by the announcement that the UK government's much heralded CCS competition will only entertain one project and that it must be post-combustion. Post-combustion has the major advantage that it is potentially applicable to operating units - not least those in China, where in 2006 (according to a UK government press release) they "built an average of one new coal-fired power station every four days" – without a care for CCS or even CCS readiness of course.

The UK decision will please the likes of Alstom - which has put post-combustion technology, notably chilled ammonia scrubbing, at the centre of its CO2 strategy – as well as RWE npower, which on the day after the competition announcement revealed its plans for a post-combustion capture demonstration project at Aberthaw. But it was a cause of understandable and deep dismay for those hoping for support for oxyfuel (eg Doosan Babcock) and pre-combustion projects (ie IGCC, as proposed, for example, by Powerfuel and Centrica/Progressive Energy).

Nevertheless there seems to be no shortage of CCS related proposals and activities around the world – from Munmorah, New South Wales to Immingham, Humberside – and a number of projects do seem to be making progress, as recent announcements attest.

For example, a new coal based IGCC plant – the first for many years – has just entered the construction phase. This is the Stanton TRIGT project in the USA. Also in the USA the DoE has just awarded funding for three large sequestration projects, while Foster Wheeler and Praxair have formed an alliance to develop oxyfuel capture, with the first installation likely to be the Jamestown demo project in upstate New York.

In Germany RWE has just signed an agreement with BASF and Linde to develop CO2 scrubbing for post-combustion capture, while Vattenfall is working with GdF on a pilot project to inject CO2 into the Altmark gas field and has recently taken delivery of the boiler for its 30 MWt oxyfuel pilot project, at Schwarze Pumpe (which can be viewed via webcam at www.vattenfall.com/co2free). Vattenfall has also recently stepped up its efforts in post-combustion capture with its involvement in the Mongstad project in Norway, which is rapidly becoming an important focus for CCS (see MPS, August 2007, pp 18-20), albeit in conjunction with a gas-fired plant. In France there is an oxyfuel project planned at Total's Lacq gas field. There are also several CCS projects planned in Italy and in Poland, where GE is hoping to see a 900 MWE IGCC constructed and where it has chosen to locate its "European cleaner coal center of excellence" – which is perhaps just as well in view of the country's astonishing 96% dependence on coal generated electricity.

But for commercial deployment in the power sector it is necessary to reduce the efficiency penalty of CCS and the associated burden of costs.

In the European context ZEP is proposing to achieve these reductions through an ambitious but co-ordinated matrix of demonstration projects in several countries, designed to validate all the key items of technology required – an urgently needed exercise in learning by doing.

At its 3 October General Assembly in Paris ZEP launched what it calls its EU Flagship Programme. This envisages around 10-12 industrial scale CCS demonstration projects "up and running by 2015", a few of them likely to be some of the projects mentioned above. ZEP's goal is to enable CCS to "become commercially viable for fossil fuel power plants by 2020."

Why such a large number of demo plants? Because the aim is to test a number of CCS technologies (post and pre-combustion and oxyfuel) with a range of fuels (coal, lignite, petroleum coke, natural gas, biomass and peat) in a variety of geographical and geological settings, Europe-wide.

And how will all this be funded? ZEP suggests that the additional costs associated with CCS, coupled with an allowance for reduced plant efficiency, might be as much as 2300 euro/kW (although at this stage the costs are difficult to pin down and as we all know the power plant design and construction business is currently operating in a very inflationary environment). Assuming the Flagship Programme consists of ten 400 MW plants, ZEP estimates the total CCS-related costs would be in the ballpark of 10 billion euro.

As ZEP says, industry must shoulder a fair share of this. Capital grants from individual member state governments will also be welcome, and are in fact given "préjugé favorable" status under amended EU guidelines on state aid, but will not be adequate (as the UK CCS competition saga demonstrates). What we really need to jump start and incentivise CCS (to make it worthwhile for first movers to take on the risks and to close the gap between power production with and without CCS) is, in the words of ZEP, "stable, market-based funding" – through such mechanisms as the Emissions Trading Scheme, a system of "decarbonised electricity certificates" (similar to the UK's ROCs) or feed-in tariffs (the German model).

Twenty years ago – MPS November 1987

"Soviet natural gas is to fire a 1200 MW station to be built...the Turkish Electricity Authority. The design thermal efficiency is 51.37 per cent."

"SEGS V, the latest in a series of commercial scale solar-thermal electric generating

systems was put into operation on the Southern California Edison (SCE) energy grid

in October 1987."

"The Appalachian coal gasification combined cycle project proposed by M W Kellogg Co. has been selected by the US Department of Energy for support under the Clean Coal programme."

"DWK has said that the controversial Wackersdorf plant currently under construction in Bavaria will go into operation by 1996 at the latest."




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