This month, the Policy Exchange expects to publish a new report on how the Government can make carbon capture work in the UK by setting in place the incentives industry needs to make this happen. This is vital if New Labour is to live up to its pledges on greenhouse gas emissions.
Unfortunately for PM Brown & Co, Professor Stuart Haszeldine, of the University of Edinburgh, and others recently penned for the Policy Exchange a damning document about Britain’s readiness, or rather lack of readiness, over carbon capture.
Haszeldine stated, “Large-scale demonstration of CCS technology in the UK is being undermined by incoherence and timidity in Government policy”, and “confusion over Government policy and time scales means that the number of proposed CCS projects in the UK has halved in the past year, from 10 to five”.
It was noted that:
The 10 projects proposed in 2006-07 would have cut UK base load power emissions by 20%. The first would have been operational by 2009, five years ahead of the Government’s latest deadline.
By losing BP and Scottish and Southern’s planned gas CCS plant at Peterhead, the Treasury has lost an estimated tax take of £1billion in oil revenues as the carbon recovered would have been stored in the Miller field in return for some 40million barrels of additional oil.
I’ll come back to the Peterhead project shortly.
As if that isn’t enough, Haszeldine warns that Brown & Co are failing to encourage the development of a CCS (carbon capture and sequestration) industry in the UK. Moreover, they are also failing to enable power stations to be ready for CCS once it is developed abroad – in other words, that such plant be “capture-ready”.
Basically, capture-ready means that a new coal-fired power station will have all the necessaries to enable equipment to be plugged in at a later date.
It’s a bit like a current-generation Hornby train – the loco may be DCC-ready, but you have to go buy the control chip and then fiddle around trying to fit it before being able to play with said loco and a bunch of other engines at the same time all on the same track – as if for real.
Anyway, I digress.
The Government has already made being “CR” a part of the planning process for new coal and gas plants and has already granted permission to three gas-fired stations on this basis.
At the time of writing this column, Government ministers have yet to decide whether to approve the UK’s first new coal station for 24 years – the Kingsnorth expansion in Kent. A further seven coal-fired stations could be on the table.
The owners of such plant must have in place plans to transport and store the carbon dioxide and ensure space provision to retrofit equipment to capture it. Thus, Kingsnorth will be allowed to emit up to eight million tonnes of CO annually until CCS equipment is fitted and made operational.
Fitting CCS is all very well, but Haszeldine points out that the Government has made no consideration of the fact that installing such equipment leads to coal and gas stations producing up to 25% less energy to the grid. He claims that retrofitting technology to existing stations may, in fact, lead to blackouts in the future.
Nor, it seems, has the Government put in place a liability regime for the storage of CO, so exposing future administrations – or, rather, the poor, benighted British taxpayer – to the kind of costs and risks currently faced by the nuclear industry. And no one has ever told the truth about the nuclear legacy.
Haszeldine goes so far as to say that carbon from CCS “could well be seen as the new nuclear waste”. But I take issue with him on that.
For example, Statoil has managed to make CO recovery and geological storage at its North Sea Sleipner field work, so why couldn’t storage of captured CO in a depleted Southern Gas Basin field such as the one Encore Oil is contemplating work successfully.
Where I do agree with him is that, while carbon-capture technologies are not new, there may be considerable difficulty in integrating them, in working with multiple new business partners, across large areas, with a host of planning restrictions and little Government guidance.
Oh, and CCS has to be affordable, too. But then how do you define affordability?
Last year, the Government proposed a nationwide competition to create an integrated demonstration of CCS in the UK. The winning project will need to demonstrate a fully integrated CCS plant – from capture through to transport and storage.
That competition closed on March 31, apparently with nine bids lodged, of which only one will get built – and it will be a post-combustion project, not pre-combustion, which was the Peterhead model.
Basically, the Government will fund one 400MW coal-fired power plant fitted with post-combustion capture, to be ready by 2014. That’s all.
It will be a small plant in which 400MW of thermal energy will be converted to 300MW of electricity after the capture penalty has been paid.
Is the competition enough to create an integrated CCS plant in the UK? Frankly no, and Haszeldine goes to town on the subject – quite rightly.
It’s a disgraceful, even pathetic, way to set about encouraging the development of CCS, and yet Energy Minister Malcolm Wicks had the temerity to state in the May issue of Energy: “By getting ahead of the game we could become a market leader in CCS and take a share of a multibillion-pound market.”
What could have contributed to genuine leadership was the Peterhead project, had it been given the green light.
I happen to believe there is wrong on both sides with this project. BP (with Scottish and Southern Energy in tow) probably pushed its luck in terms of the extent of the “decarbonised Renewables Obligation Certificate” demands it tabled.
I remain totally baffled as to how the Government could let BP, then still led by John Browne, walk away from the table the way it did, so sacrificing 30-40million barrels’ worth of tax revenues (now the thick end of £2billion at current oil prices). Rank stupidity comes to mind.
Anyone with an ounce of nous about the oil & gas industry knew full well that BP would simply take the concept somewhere else for development, which is precisely what has happened.
Like so much else, Britain appears to be paying little more than lip service to CCS, except where it could benefit the Treasury’s purpose. That’s sad.
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