Abby L. Harvey
GHG Monitor
3/27/2015
A series of new reports released this week by the United Kingdom’s Department of Energy & Climate Change and by British think tank the Green Alliance highlight the significant impact that the development of carbon capture and storage hubs, or “clusters,” throughout the country will have on the industrial sector. The DECC reports, each focused on a different high carbon industry, such as iron and steel manufacturing and cement manufacturing, note that CCS is “expected to play a key role in a decarbonised iron and steel sector. There are a range of specific technologies which could deliver the emissions reductions, the best technology will need to be identified through research, development and demonstration.”
The reports find that “Sites located near CCS infrastructure will have a competitive advantage and will be able to realise cost and energy savings compared to CCS enabled sites not located near infrastructure.” On the other hand, sites not located near CCS infrastructure will be at a disadvantage due to high CO2 transportation costs. For this reason, the DECC reports suggest creating CCS industrial clusters or hubs. “Clustering allows infrastructure investment to benefit from economies of scale in serving multiple sites. It also allows the development of labour market expertise and skills in a cluster area, alongside research and innovation facilities. Clustering also allows waste or by-products from one process to be used beneficially by another process, to enable energy efficiency or carbon reductions. Waste heat recovery can bring further energy efficiency benefits through reuse of low grade heat by other heat users outside of this sector. To deliver these benefits would require other industrial processes to be co-located with UK steel sites. It is recognised that relocating a steel plant is unlikely due to the scale of operations and size of sites, but this could still be considered in future developments. Further research is needed to identify specific opportunities from clustering, as well as particular policy support requirements,” the report finds.
The DECC’s report on the cement industry also notes that clusters may be the best route. “Individual cement plants are not considered to be of a sufficient scale to justify their own CO2 pipeline and storage infrastructure. Collaboration both within the sector and externally is necessary to establish the networks, along with the availability of sources of funding appropriate to this type of shared infrastructure,” the report says.
Power Sector Demonstrations Offer Opportunity to Build
The Green Alliance, in an unrelated report released this week, suggests that industrial CCS clusters could be built off of the UK’s two power sector demonstration projects, White Rose and Peterhead. “The UK can increase the value of its existing investment in CCS demonstration plants by using power stations to create CCS industrial clusters. This makes economic sense because the projects will have to build pipelines and storage anyway and the cost of oversizing pipeline infrastructure is small compared to an incremental approach: a single oversized CO2 transport pipe costs around £340 million, compared to the £1,000 million it would cost to develop incrementally the six single pipes required for a Humber cluster. Transport and storage costs are over a quarter of the total cost of the CCS demonstrations. A range of research has shown that achievable, early cost reductions for CCS arise from increasing the scale and use of transport and storage, and that this is how costs can be brought down while improved capture technology is developed,” the report says.
