Insights

What's next for CCS in the UK

Earlier this month Lawrence Irlam, the Institute’s Senior Consultant – Economics and Policy, travelled to the UK to attend two events: the UKCCSRC’s Biannual in Sheffield and the 5th IEAGHG CCS Cost Network meeting in London.

As suggested in our 2013 and 2015 editions of the CCS Policy Indicator (with 2017 results now being finalised), the UK is a hotbed of activity in terms of research and policy discussion around the role of CCS in decarbonising electricity, heat and industrial sectors. Hosted in Sheffield and London respectively, the UKCCSRC’s Autumn biannual and the 5th CCS Cost Network meeting provided excellent windows into this discussion.

While there were too many parallel sessions and issues to report on individually, particularly on storage and capture research, several key themes emerged during the four days.

The need for flexible CCS

The growing recognition of CCS e.g. on coal, gas and biomass power generation, as a means to supplement high rates of intermittent renewables in electricity systems, has long been exercising the minds of CCS experts.

On the technical side, researchers are considering various solutions in capture, transport and storage to accommodate the need to cycle thermal plant rather than continue operating under baseload conditions. The UK is an example where coal-fired generators have not been operating as baseload plant for some time.

Studies of the UK market have illustrated that there would be overall cost reductions in retaining such flexible coal plant with CCS in a system comprised of nuclear, gas and wind given the different capabilities of these plant types. Similar modelling has been applied recently to the Australian power market, again finding that flexible low carbon capacity is required in order to optimise the value of the overall system.

Negative emissions

BECCS is an important point of discussion given that integrated assessment models tend to rely heavily on its deployment as a means to ensure global temperature increases remain within pre-determined limits. More research is required to examine the feasibility and sustainability of the implied amounts of biomass in these modelling simulations. In effect, if these amounts are not feasible, this raises critical questions on the cost and likelihood of pursuing alternative pathways and technologies to achieve climate goals.

Importantly, direct air capture is a method that appears to be gaining public acceptance although it is far more expensive than CCS and still has challenges in requiring suitable permanent storage sites. This acceptance raises interesting questions around the political economy of deploying low-carbon technologies which is also an important field of study.

For some, the exploration of BECCS and other net negative technologies presents potential ‘moral hazard’ issues, as their deployment might imply an unrealistic flexibility in carbon budgets and so less urgency in deploying more ‘standard’ low carbon technologies. Ideally, all technologies would be pursued however the policy-making process in many countries is skewed towards pushing a limited number of options.

The costs of CCS

Cost estimates for the UK are currently being finalised (including for BEIS) indicating how ‘nth of a kind’ and optimised transport and storage arrangements can deliver significant cost reductions, roughly in the range of £50 to 90/MWh. This contrasts to the £170/MWh figure quoted around the time of the cancellation of the UK’s most recent Commercialisation Competition.

Two important developments being discussed across the broader CCS community at present are the pilot plant about to be commissioned by NET Power in Texas utilising the Allam Cycle, and processes being employed by Carbon Clean Solutions. While many question its claims on cost and performance, NET Power’s process is a potential game changer for CCS in power generation, with the Allam Cycle potentially achieving efficiencies approaching 60% in gas-fired power generation. The CCS community is also watching Carbon Clean Solutions and its claims of CO2 capture for less than US$40 per tonne. Its CEO, Aniruddha Sharma, offered the CCS Cost Network his views regarding cost reduction through standardising CO2 capture processes, challenging the conventional view that CCS projects face a cost barrier in being too large and needing customised componentry.

The value of CCS

Many conversations were framed in the cancelation of the UK’s Commercialisation Competition, particularly the visibility and scrutiny over the cost of CCS and the ability of the CCS community to effectively communicate its corresponding benefit. This includes quantifying the cost of delay and addressing the perception that governments can adopt a strategy of waiting for others to deploy CCS and then benefit from cost reductions realised by others.

Much work has been done on estimating net benefits from a societal perspective through regional or global integrated assessment models, and via more granular modelling exercises including of electricity markets. These studies may, however, seem esoteric and so not affect public debate, which might focus instead on incomplete yet more tangible impacts in terms of employment or on electricity prices.

The ‘sell’ of CCS is difficult to policy makers and to the general public given the market is already focused on processes like renewable power generation that deliver important services without any associated carbon pollution. By contrast, CCS is ultimately a set of processes dealing with waste disposal, and its business case is dependent on governments placing an explicit value on carbon or on providing subsidies to entities associated with pollution. Neither of these tend to be politically palatable.

Looking forward, there is much anticipation around the UK Government’s Green Growth Strategy and what policies it will contain regarding CCS. The UK’s Committee on Climate Change, the National Audit Office and a host of other parliamentary committees have reported on the role of CCS in the wake of the cancelled commercialisation competition. If and how the UK Government responds to these will be important in global landscape of CCS and provide further impetus for those researching and putting the case for CCS more broadly.