Carbon Capture: ‘It’s costly and complicated’ say independent Scots experts in new Brit-Govt study

Developing a transport and infrastructure for a commercial carbon capture, storage and use (CCUS) network is costly and complicated.

That is the summary finding of an independent study of the issue carried out by the Banchory-based Pale Blu Dot consultancy and published yesterday by the Brit-Govt.

CCUS has the potential to decarbonise the economy and maximise economic opportunities for the UK.

However, it is currently expensive and cost reductions are necessary to be able to deploy CCUS cost-effectively in the UK to provide value for money for both taxpayers and consumers.

However, the Brit-Govt’s energy department (BEIS) confirmed in its Clean Growth Strategy last year that it is committed to deploying carbon-capture schemes and make the UK a ‘global technology leader’ in the sector – if costs can be brought down.

In its report for BEI – CO2 Transportation and Storage Business Models ** – Pale Blu Dot said: “The carbon capture transport, storage and infrastructure business is not yet commercial.”

Transport and storage infrastructure is defined to include onshore pipeline, coastal terminals, offshore pipelines, shipping facilities, offshore facilities, wells and storage reservoirs. The objective was to identify a small number of potentially viable business models which could be assessed in more detail in a subsequent phase of work.

Pale Blu Dot added: “CCUS infrastructure differs from other infrastructure in that it includes subsurface risk and an extended project duration

“Key challenges to the development of CCUS include CO2 supply certainty, cross-chain performance, leakage liability and allocation of risk

“Whilst there are a wide range of potential business models for CCUS infrastructure development, a sub-set of 11 has been developed which includes viable options of; full public ownership, mainly public ownership, a public private entity and a fully private venture.

“And further development and analysis of the short-listed business models is required in the next phase.”

Schematic of a possible carbon capture project
Schematic of a possible carbon capture project

Key CCUS ‘unknowns’ identified in the report include;

  • Absence of a current, functioning revenue model or commercial incentive for CO2 transportation and storage business
  • Private sector inability to accept long term, unknown and uncapped liabilities for leakage of CO2
  • CO2 supply volume uncertainty due to potentially unknown timing and performance of CO2 capture project
  • Cross-chain performance risk – how can the CO2 storage operator guarantee performance of the storage system to the CO2 emitter and how can the operator manage uncertainty of CO2 supply volumes
  •  Aligning timing of project investment to synchronise with CO2 capture project progress and start of commercial operations
  • Imbalance between the size of investment and the balance sheet strength of the infrastructure contractor
  • Current absence of customers for a CO2 transportation and storage service, and
  • Political uncertainty

The consultants advised that more econometric data and further investigation is required.

** Get the full report here; https://tinyurl.com/yd9ap3bg

The government has established a CCUS ‘cost challenge taskforce’ on steps needed to reduce the cost of deploying CCUS in the UK, which is expected to deliver its plan in summer 2018.

31 Jan 2018

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