Why cancelling the Peterhead project has put UK behind Norway, Canada and US in commercial-scale carbon capture

Peterhead power station, site of the now-aborted UK carbon capture project
Peterhead power station, site of the now-aborted UK carbon capture project

By STUART HASZELDINE

The UK must regain its low-carbon agenda before it loses 10 years’ worth of development and reputation as a leading voice in climate change action.

The Commons Liaison Committee, composed of chairs from expert committees in the UK Parliament, have quizzed Prime Minister David Cameron about how he intends to deliver his ambitious climate change commitments while simultaneously cancelling one of the UK’s largest growth industries in renewable energy and, notably, Carbon Capture and Storage (CCS).

David Cameron told the same committee in 2014 that “CCS is absolutely vital to decarbonisation”, especially if gas plays a role in future UK energy provision.”

The UK claims to be part of a highly ambitious international coalition on climate change action. The climate deal reached in Paris last November at the COP21 talks commits the UK to help keep global warming to less than 2°C in perpetuity.

This means that, from 2050, every tonne of carbon emitted by the UK economy must be balanced by 1 tonne of carbon stored. Instead of capturing just 25% of carbon from the UK energy sector, the UK must now capture 100% of its carbon from the whole economy. Which means CCS is more essential than ever.

On 4 January 2016, Norway funded Statoil to identify a site before the end of July, which will operate by 2020 and store CO₂ from the city of Oslo’s district heating, a cement plant and a fertiliser plant.

On 7 January 2016, the US Energy Secretary, nuclear physicist Ernie Moniz, stated that “carbon capture is critical for solving climate change and it is working”. The US currently captures and stores 10 million tonnes per year of CO₂.

From 2020, the US Clean Power Plan will enforce reduced emissions from coal power plant, leading to limits on gas power plant emissions; that will mean CCS becomes routine in the US.

In Canada, the Boundary Dam coal-fuelled power plant has been operating since mid-2014, capturing CO₂ from the flue gases and sending it to geological storage.

Significantly, the capture equipment in Canada is almost identical to that planned for the Peterhead CCS Project in Scotland, which had been hoping to begin construction this year until the UK Government pulled its £1 billion CCS Commercialisation Competition last year.

Canada’s Boundary Dam also produces electricity for a wholesale price of £105 per megawatt hour. This is significantly lower than the UK pays for offshore wind power and is comparable with the UK’s proposed price for new nuclear power at Hinkley C, which will increase with inflation for at least 30 years.

While the UK Government has cancelled its CCS prize, they still have a clear option to fund the first CCS projects through a higher price on electricity that would add just £20 per megawatt hour.

After cancelling the £1 billion competition, the Chancellor subsequently claimed that “CCS is not regarded as affordable”, the Prime Minister commented that “you have to make decisions about technology that works”, and the Secretary of State for energy commented that “CCS is not necessary until 2070”.

Reaction from industry, academia, CCS organisations and other commentators was swift and damning. 

 

See also Scottish-UK-Energy News (25 Nov 2015)

Scot-Govt fury over doomed renewable energy plan as Osborne pulls plug on £1bn UK carbon capture competition: Scottish Energy Association laments Govt U-turn on Peterhead project

http://www.scottishenergynews.com/scot-govt-energy-fury-as-osborne-pulls-plug-on-1bn-uk-carbon-capture-competition/

The higher cost of CCS claimed by the UK government is due to two factors imposed by them. Firstly, the CCS competition co-developed with Department of Energy and Climate Change has specified very large quantities of additional equipment and design security.

That is an understandable choice for a first project, but is not something that would be expected to continue with subsequent projects. Secondly, the UK project will be taking advantage of existing pipelines to transport CO2 offshore, existing boreholes for injection, and an existing oilfield platform offshore.

This will be much cheaper than building new infrastructure, but the cost of conversion is being added on to the cost of Peterhead CCS. This does not happen with renewable power projects –  which benefit from transmission wires constructed by others – or with proposed Small Modular Nuclear power, which expects district heating pipework to be built by others.

The delivery of commercial-scale CCS in the UK has to start somewhere, and expecting the first-phase projects to fund the development of infrastructure as well as capture technology is rather like expecting the first household with a gas cooker to pay £500 million for the start-up gas network.

Additional costs relating to quality and safety must surely be shared in order to help developers get the first projects off the ground and then begin to see costs fall through learning and experience

Prof. Stuart Haszeldine, Director, Scottish Carbon Capture and StorageProfessor Stuart Haszeldine (left) is Director of the Scottish Carbon Capture Storage project

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