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Analysis | August 2011

CCS versus CO2

Carbon Capture and Storage (CCS) can mitigate the contribution of carbon dioxide (CO2) to global warming, says Magnus Melin as he presents a snap-shot of the current state of play around the globe.

Global warming is more relevant than ever before and the world's leaders push for measures to limit emissions of greenhouse gases. Carbon Capture and Storage (CCS) is a means of mitigating the contribution of carbon dioxide (CO2) to global warming, based on capturing CO2 from fossil-fuel fired power plants and other large point sources and storing it permanently underground. While being debated for a long time and demonstrated on a small-scale, what is lacking is the large-scale deployment. So let us take a look at the progress made.

The environmental challenge

The 2009 Copenhagen Accord sets a goal of limiting the average increase in the global temperature to 2°C above pre-industrial levels. This translates into a maximum allowable concentration of Green House Gases (GHGs) in the atmosphere of 450 ppm CO2-equivalent, the so-called "450 scenario". The global CO2 emissions need to come down to approximately 25 billion tonne annually by 2030 - similar to the emissions back in 2003. (See graph).
Fossil-fuel fired power generation accounts for almost 50 per cent of the world's CO2 emissions. The transportation sector is the second largest CO2 emitter with approximately 23 per cent of the world's CO2 emissions. A "typical" 1,000 MWe coal-fired power plant emits in the order of 4 million tonne CO2 per year.

Great expectations

The political expectations for CCS are high. In a study by International Energy Agency (IEA) in 2009, the required deployment of CCS to achieve the 450 scenario by 2030 was estimated to be almost 1,000 projects with close to 3,000 million tonne CO2 captured per year. Several governments, for example in the US, Australia, Norway, UK, Canada, the EU and South Korea have set aside very substantial funding and are actively promoting CCS.

A recent advance for CCS has been the agreement at the Cancún Conference of the Parties (COP) 16 summit that CCS is eligible for, under the Clean Development Mechanism (CDM) of the Kyoto Protocol. Under this scheme, emission reduction projects in developing countries can earn credits that can be used by industrialised countries to meet a part of their emission reduction targets. The final procedures are to be agreed upon at COP 17 in late 2011.

Demonstrating CCS globally

The Global CCS Institute's most recent update on global large-scale integrated projects (LSIPs) concludes that there were a total of 71 LSIPs as of June 2011, down six projects since last count, distributed on USA (26), Europe (19), Canada (8), Australia and New Zealand (7), China (5), Middle East (3), East Asia (2) and Africa (1). None of the LSIPs has progressed to large-scale commercial operation as yet. However, there are five commercial-sized capture-CO2-from-gas projects that together store in excess of 5 million tonne CO2 per year - in Salah (Algeria), Sleipner and Snøhvit (Norway), Rangely (US) and Weyburn (Canada), so in that respect large-scale storage of CO2 is already happening. USA and Canada have the longest experience (30 years) of large-scale onshore injection of CO2 for enhanced oil recovery (EOR). Looking back at the progress during the last year a mixed picture unveils. On the positive side, there is continued strong political support from the Obama administration as well as from federal governments, for example in California where a CCS panel put forward recommendations to resolve some of the legal, financial and regulatory obstacles to CCS projects. In Canada, the province of Alberta is pushing to develop a world-class regulatory framework for CCS and several projects.

For example, SaskPower and Enhance got approval to proceed with their CCS projects. On the negative side, five large, planned CCS projects were cancelled in the US - primarily due to financial reasons, lack of public funding and concerns about regulatory uncertainty.

Moving on to Europe, the European Union is actively promoting CCS and has recently launched a second round of public funding, the NER300, worth approximately 5 to 6 billion Euros to demonstrate CCS. A total of 13 CCS projects (11 in the power sector) are currently reviewed by the European Investment Bank with an expected award of funding in early 2012. The majority of the projects are believed to have a planned start around 2015 but it remains to be seen if this can be achieved given the uncertainties in terms of regulations, permitting and financing among others.

While some European CCS projects, for example the Longannet project in Scotland, seem to gain acceptance by the local community other projects, for example the Barendrecht project in the Netherlands, have been stopped due to local concerns over safety.

In Australia, the final investment decision has been taken for the Gorgon project which will be the largest CCS project in the world when completed. The Australian government has announced support to additional projects under its $1.7 billion CCS Flagship Programme. The ZeroGen project to build a clean coal power station will not go ahead in its current form but may continue under a different form owned and run solely by the industry.

Taking a closer look at China, the world's largest CO2 emitter, one might be led to believe that there is not much activity given the limited news coming through in Western industry journals. However, China is gearing up fast and has made large leaps recently with projects as the Shenhua Ordos coal-to-liquid plant which is now operational and the GreenGen project is almost complete only two years after its conception. The planning, approval and construction of CCS projects is carried out considerably faster than in other parts of the world and Chinese manufacturers of carbon capture equipment are among the leading ones in the world.

Challenges ahead

There are still many challenges and hurdles that need to be overcome to demonstrate the commercial viability of large-scale CCS. The challenges are, to a large extent, similar around the globe and include financial viability due to market conditions and the high cost of capturing CO2, uncertainty around regulations for storage where the operators are faced with potentially very large liabilities over a long time period. Examples on technical challenges include the net thermal efficiency, the effect of CO2 on structural integrity, demonstration of safe long-term storage for very long time scales and insufficient data for sub-sea storage sites, especially for aquifers.

Outlook

When looking at the progress that has been made in the last year, it is clear that there is continued and increasing activity around the world, important technological achievements are made and the additional public funding is being released to assist with demonstration of large-scale CCS. So has progress been made? Absolutely. Is it enough and will CCS develop at the scale and pace required to combat global warming? Too early to say. We are still early in the demonstration process which is likely to last up to a decade and the coming years will be critical to maintain the momentum while shifting from demonstration to large-scale operation. Continued and preferably increased political support is key to the further development of the CCS industry - an essential element in the path to a carbon-free society.

The author is Global Thermal Power Leader, Lloyd's Register. Views are personal.
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