By John Kemp
LONDON, April 3 The UK government today announced a second
competition to build a full-scale commercial power plant employing carbon
capture and storage (CCS) technology after the first round failed in 2011
CCS remains central to policymakers' dreams for limiting greenhouse
emissions at an acceptable political and economic cost. But the timetable for
building a full-scale commercial plant using the technology has slipped badly,
and the goal remains as far away as ever.
There is a growing gulf between the soaring rhetoric and political
imperative to make CCS work and the messy technical and commercial reality on
Last month the U.S. Environmental Protection Agency (EPA) proposed new
regulations that would effectively make CCS compulsory for all new coal-fired
power plants built after 2013/2014.
EPA's new source performance standards (NSPS) for power plants would cap
emissions at 1,000 pounds of carbon dioxide (CO2) per megawatt hour (lbs/MWh).
At the moment the most modern coal-fired plants using supercritical combustion
can achieve only 1,800 lbs/MWh.
In the United Kingdom, any new coal-fired power plants must use CCS
technology for at least some of their output, and the technology must be
retrofitted to their full generating capacity by 2025.
CCS is a strategic priority. According to the International Energy Agency,
successful deployment would cut the worldwide cost of meeting climate change
targets by 70 percent.
Coal accounts for such a large share of fossil fuel reserves that it will be
impossible to replace by cleaner burning natural gas or renewable energy from
wind or solar in the foreseeable future.
In 2007, the European Union committed itself to provide financial incentives
for the construction of up to 12 demonstration CCS plants by 2015. In 2008,
energy ministers from the G8 announced they would "strongly support" the launch
of 20 large-scale CCS demonstration projects by 2010.
Britain has allocated as much as 1 billion pounds of government support to
help with the cost of building a 300 MW coal-fired plant using CCS by 2014, with
uncosted promises to support three more commercial scale projects later.
The initial billion pounds of funding is so important that it has survived
the government's austerity programme. Following the collapse of the first round
of CCS projects, the government has indicated the funding will remain available
for a second round launched today.
By 2050, Britain is supposed to generate almost one-third of its power
requirements from gas and coal-fired plants employing CCS, according to one
government projection cited in a recent report by the National Audit Office.
("Carbon Capture and Storage: lessons from the competition for the first UK
demonstration" March 2012)
The U.S. Department of Energy (DOE) has made millions of dollars available
for demonstration projects for each of the components of CCS (capture, transport
and storage), including a fully integrated project called "FutureGen" in
So how many full-scale power plants with CCS have been built so far? Zero.
Various power plants have introduced small-scale units to capture a small
fraction of their emissions. But no significant power plant is operating CCS on
anything like 100 percent of its emissions.
Britain's first round CCS project, which attracted expressions of interest
from nine firms, collapsed when the government ended negotiations with the last
remaining bidder in October 2011 after it proved impossible to achieve agreement
on commercial terms.
In the United States, plans to build an advanced coal-fired power plant
employing integrated gasification and combined cycle (IGCC) technology coupled
with CCS were originally conceived in 2005.
FutureGen would have gasified coal into a mix of carbon monoxide, hydrogen,
carbon dioxide and water vapour. The carbon monoxide and hydrogen would have
been burned to drive a primary gas turbine, and waste heat in the exhaust gases
would then have been used to raise steam and to power a secondary steam turbine.
Carbon dioxide produced at the gasification stage would have been captured
and injected into underground rock formations (saline aquifers or depleted
By 2010, however, it had become clear that the project was not feasible, so
it was reinvented in a less ambitious form.
"FutureGen 2.0" ditches the complicated proposals for gasification and
combined cycle technology. Instead the project will upgrade an existing power
plant with "oxy-combustion" technology that burns coal in a mix of carbon
dioxide and oxygen rather than air to produce a concentrated stream of CO2 for
removal and storage.
Proponents of CCS point out that each of the components (capture, transport,
storage) is a relatively proven and mature technology.
The U.S. Department of Energy is supporting existing CO2 injection projects
at 10 locations worldwide including Norway, Algeria, Canada, China and
According to EPA, the United States already has more than 3,600 miles of
pipelines transporting 50 million metric tonnes of carbon dioxide for industrial
use and for injection into depleted oil fields as part of enhanced oil recovery
But scaling up these small-scale applications to the size needed for a
modern power plant and linking them up with the complex technology required for
gasification, or even a supercritical coal-fired plant, has proved immensely
complicated and highly risky.
Britain's project fell apart because it proved too expensive but also
because the government and project developers could not agree on who should be
responsible for the various risks.
By October 2010 12 months before the project finally collapsed, it was
already clear there was a big funding gap between the 1 billion pounds the
government had budgeted and the 1.9 billion which it estimated the project would
Subsequent engineering studies cut the cost to 1.3-1.5 billion, and the
government and the bidders identified a further 252 million pounds of
"aspirational savings", which might have cut the project's cost to 1.1 billion,
but in the end even that was still deemed over budget, according to the National
Audit Office report.
The project developers and the government could not agree on who would be
responsible for the risk of CO2 escaping from underground storage (raising
safety issues and the need to buy permits to cover fugitive emissions).
Nor would the developers accept taking full responsibility for "change of
law risks" (including laws unrelated to the project such as corporation tax and
One major problem was that CCS would initially be trialled on only a small
part of the upgraded power plant. The remainder of the power plant would
eventually need to be retrofitted or upgraded to CCS to comply with the 2025
deadline for all new plants to have full CCS capability.
The first round CCS projects were exposed to enormous uncertainty about the
outlook for coal-fired generation (the cost of carbon permits, carbon floor
prices and the relative cost of coal and gas) as well as other parts of the
regulatory regime. In the end, the costs associated with these risks proved too
In the United States, American Electric Power announced in July 2011 that it
was deferring an ambitious demonstration project to retrofit one its existing
power plants with large-scale CCS because power market regulators would not
allow it to recover the cost from its customers unless and until CCS became
The EPA's proposed regulations on new plant emissions contain a summary of
operating or planned CCS projects. But existing projects are small, and the
large ones, such as Southern Company's planned 582 MW IGCC Ratcliffe Plant, are
not scheduled to enter service until 2014.
Policymakers have not even begun to address the challenges posed by the
injection of hundreds of millions of tonnes of CO2 per year into aquifers and
geologic formations. Large-scale injection poses many of the same safety and
regulatory challenges as hydraulic fracturing, including seismic activity and
the need to prevent fugitive emissions.
For all its proponents like to present CCS as a well understood technology,
it has not been proven on anything like the required scale. That would matter
less if politicians had not already gambled it can be made to work in a short
space of time.