Since electricity privatisation and the demise of state owned utilities (which sometimes seemed to harbour more PhD's per square meter than the average university) this has been a nagging question. The European Commission, at least according to a document put out a few months ago setting out its SET (Strategic Energy Technology) plan, seems to believe the answer is "no". "The easy availability of resources, no carbon constraints and the commercial imperatives of market forces have not only left us dependent on fossil fuels, but have also tempered...innovation and investment in new energy technologies", says the EC, which alludes to the Stern report when it describes this set of circumstances as the "greatest and widest-ranging market failure ever seen."
The EC SET communication goes on to say that energy research budgets, both public and private, have declined substantially since peaking in the 1980s in response to the energy price shocks. "This has led to an accumulated under-investment in energy research capacities and infrastructures. If EU governments were investing today at the same rate as in 1980, the total EU public expenditure for the development of energy technologies would be four times the current level of investment of around 2.5 billion per year."
Nevertheless there does not seem to be evidence of a major lack of research in a field such as carbon capture and sequestration – indeed, keeping up with projects around the world is becoming increasingly difficult. A flavour of recent developments is given in this issue's round-up (see pp 29-37). It would appear that, in the CCS area at least, the big utilities and power plant equipment suppliers are stepping up to the plate and to some extent offsetting whatever shortfall there might be in publicly funded R&D activities. In many ways the imperative of decarbonising power generation is proving as effective a driver for research as the oil crises of the 1970s.
Vattenfall (which admittedly remains state owned) is for example engaged in building up a very impressive portfolio of research, development and demonstration activities across a range of carbon capture technologies (see p 29). And on the supplier side, Alstom (see p 34 ) is also working on projects representing an increasingly diverse range of CCS approaches (which is wise, of course, as it is too early to identify winners at this stage).
Where problems do loom, and where serious government funding (along with any other forms of support we can think of) is going to be needed, is when we get to the large-scale demonstration phase. Help will be needed to get CCS through what has been described as "the Valley of Death" – ie a period when the amounts of money required are larger because the scale is increasing but a market for the technology has yet to develop.
In the case of Europe, for example, the EC has declared itself supportive of CCS demonstration projects (about a dozen or so of them) but the amounts of money available under FP7, the new Europe wide R&D budget, are just not going to be of the order of magnitude needed for demonstration. It appears the best the CCS industry can hope for from FP7 is money to support the administration of a network of demo projects, each bearing the "EU logo" - or something like that.
It has been suggested that some of the mind boggling sums (r20-50 billion/y) that could be generated by the proposed full auctioning of carbon dioxide allowances under ETS could go to large scale CCS demo projects. But there is a timing problem: that revenue will not become available until 2012, whereas, demonstration projects are needed a bit sooner than that.
It is difficult see how things can move forward without financial support from the governments of individual countries, alongside substantial inputs from the power generators and the equipment suppliers themselves.
The UK government's CCS competition (see p 30), which aims to support demonstration of the full carbon dioxide value chain at large scale (300-400 MWe) has its critics but nevertheless seems to have attracted a decent number of applicants and is an example of the kind of thing that is needed.
Outside Europe, CS Energy’s Callide A project in Australia (see p 34) and SaskPower’s Boundary Dam project in Canada also provide potential models for industry–government partnerships in support of large scale CCS demonstration projects.
Last year SaskPower cancelled plans to build a Can$3.8 billion 300 MW coal fired plant with oxyfuel capture at Shand because of financial and technological risks. In March this year it announced it was proceeding instead with the smaller scale, 100 MW, Boundary Dam CCS+EOR project, which will involve backfitting of post combustion capture. (This will almost certainly be the amine scrubbing system being offered by Saskatchewan company HTC Pureenergy (using technology developed at the University of Regina’s International Test Centre for CO2 Capture). The same technology is also under consideration for trials in Norway (at Mongstad and Karsto), in Australia (Loy Yang) and perhaps in the UK, following the signing of a recent licensing agreement with Doosan Babcock for a project submission to the UK governmentís CCS competition.)
SaskPower is putting Can$758 million into the Boundary Dam project, while the private sector is committing Can$400 million to the pipeline and the EOR infrastructure. But what finally got things moving in Saskatchewan was the inclusion of Can$240 million of funding for the project in the 2008 Canadian federal budget.
Watching the directives
Current efforts by the European Commission to recast seven existing directives relating to industrial emissions (including the LCPD and the IPPC) into one “single clear and coherent legislative instrument” – the Industrial Emissions Directive – are surely to be very warmly welcomed.
But recent concerns voiced by Eurelectric must be taken fully on board. Eurelectric’s position paper on the issue (www.eurelectric.org) makes very interesting reading and suggests the Commission's current proposals might end up jeopardising supply security. Major concerns are lack of flexibility and the Commission’s concept of turning emissions values set out in existing IPPC BREF?(Best Available Techniques Reference) guidance documents into legally binding emissions target values. Eurelectric views examples of plant performance given in BREFs as "totally unrepresentative" as they concentrate on "best ever" levels of emissions "taken from isolated cases."
There are also worries about unrealistically ambitious implementation deadlines.
It is to be hoped Eurelectric's concerns get a full airing when the new directive is debated in the European Parliament's Environment Committee in late May.
We also plan a full update on the status of the new directive and its implications for the power industry at our emissions reduction conference, EXPPERTS, to held in Brussels, 7-9 October.
Go to modernpowersystems.com/expperts2008
Twenty years ago – MPS May 1988
"Petreos de Venezuela (PDVSA), will launch commercial production of Orimulsion...next year...exports could be worth $2000 million a year in the 1990s."
"The first large circulating utility fluidised bed combustion (FBC) power plants in the US have reached full generating capacity..."
"The world's largest gas turbine, the ABB Type 13E, was commissioned during the
summer of 1987 at the Hemweg Power Station, Amsterdam..."
"Some eyebrows may be raised...at the announcement...of a new wind programme...The initial commitment is for a series of three on shore wind farms and one off shore test
facility to be operating by 1992. The longer term aim mentioned by Lord Marshall is for a capacity of 1000 MWe early next century."
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