CCS INVESTMENT REMAINED STEADY IN 2012, BLOOMBERG SAYS

Tamar Hallerman
GHG Monitor
1/18/13

Global investment in carbon capture and storage projects has largely flatlined in recent years, according to new figures released this week by Bloomberg New Energy Finance (BNEF). Investment in CCS worldwide totaled $2.8 billion in 2012, the energy analysis firm said in its most recent most recent clean energy investment tracker, down almost 7 percent from 2011’s all-time high of $3 billion. Despite that slight decrease, 2012’s funding level is largely on par with public and private investment since 2009, when economic recovery efforts funneled money into the technology’s development worldwide, said Cheryl Wilson, a CCS analyst at BNEF. “What we’re seeing from 2009 to 2012 is directly related to government support of projects. But we may not see that level of recovery spending from governments again,” Wilson said in an interview.

BNEF compiled the figures by monitoring public and private asset financing of CCS projects from the bench to the large-scale. However, the group excludes R&D funding in its figures and only counts money once a project makes a final investment decision and enters construction, not when a project is announced, which is typical of many other investment trackers. According to BNEF’s figures, Last year was a relatively stagnant one for CCS development. Only one major demonstration-scale project made a final investment decision in 2012—Shell decided to move forward on its $1.35 billion Quest project in Alberta in September. Elsewhere, projects slowly progressed on development work short of a final investment decision, while construction activities continued at facilities like Southern Company’s Kemper County and SaskPower’s Boundary Dam.

Wilson said she expects to see similar CCS investment figures carry over into 2013 and 2014. “Going beyond 2014, you get into the larger question of what’s going to drive CCS beyond public funding,” she said. “EOR is certainly a driver, so we could see investment in capture projects because of regionally-driven markets for CO2, but we don’t expect to see a large yearly uptick beyond this $2.7 billion to $3 billion range in the next couple of years based on where CCS currently is as an industry currently.” Wilson estimated that a few projects, including Summit Power’s Texas Clean Energy Project, will make final investment decisions this calendar year. But ultimately, Wilson said she expects the investment figures to remain relatively flat until there is some sort of carbon price or other broad incentive for low carbon technologies in place. “Until there is broad pricing of carbon, what we’re likely going to see is the development of CCS in a regional way” surrounding enhanced oil recovery, Wilson said.

Other Investment Totaled $269B in 2012

BNEF released the CCS figures publically for the first time this year alongside a Jan. 14 report tracking global trends in other types of clean energy investment. That analysis, which does not include the CCS numbers, concludes that new investment in clean energy fell 11 percent in 2012 to $269 billion from an all-time high of $302 billion in 2011. That report found that while China experienced a surge of new investment over the last year, mainly in its solar industry, other nations like the United States, Italy and Spain saw a drop in new investment due in part to policy changes, regulatory uncertainty and cheap natural gas prices in the U.S. Within that scope of new investments, most were in solar power, which at $143 billion accounted for more than half of new clean energy investment in 2012.