Karen Frantz
GHG Monitor
2/07/2014
The deployment of carbon capture and storage technology in the United Kingdom could add between 15,000 and 30,000 jobs and £15–£35 billion in Gross Value Added to the nation’s economy, according to a new report prepared for the Trades Union Congress and the Carbon Capture and Storage Association. “A balanced and effective energy strategy will be critical to ensuring that electricity and heat remain on tap and affordable to both industry and domestic consumers alike,” the report says. “Through a series of energy market reforms, the government’s Energy Bill is tasked with delivering the framework for £110bn of secure, low carbon and affordable energy investment by 2020. Investing in ‘green growth’ within the UK economy will provide jobs, tax revenues, inward investment and export potential. Carbon capture & storage (CCS) technology can deliver on all these counts—providing least cost, secure energy in association with green growth.”
The report considered four scenarios for meeting energy demands by 2030, including “No CCS,” in which high growth in offshore wind and geothermal account for 13 and 10 percent of total electricity generation respectively; “Power CCS,” in which 15 GW of gas CCS is installed between 2020 and 2030 and there is no investment in industry CCS and a relatively small increase in offshore wind capacity; “Full CCS,” in which there is investment in gas and industry CCS but not coal CCS; and “Full CCS with coal,” in which there is investment in both power and industry CCS, but the power sector is split between 6 GW of coal and 6 GW of gas by 2030. The report found the “optimal” scenarios were “Power CCS” and “Full CCS.”
Economic Benefits of CCS
The report found that among the benefits of CCS is a 15 percent reduction in the wholesale price of electricity—or a £82 reduction in household electricity bills—in the “Power CCS” and “Full CCS” scenarios compared to the “No CCS” scenario. This is “mainly due to the fact that without CCS there is an increase of approximately 20-25 percent in electricity generation capacity as well as a requirement for additional investment in electricity transmission capacity,” the report says. The report also says the “Power CCS” and “Full CCS” scenarios would “significantly increase the disposable income of householders and reduce the risk of poverty. The lower cost of CCS deployment would also mean that lower subsidies (and therefore lower taxes) would be needed to decarbonize the electricity sector.”
Figures show that the “No CCS” scenario starts to see electricity prices rise compared to the other three scenarios in 2021 and to continue to dwarf the other scenarios’ costs through 2030. The figures also reveal that wholesale electricity prices remain the lowest among the “Full CCS” and “Power CCS” scenarios, with the “Full CCS with Coal” scenario’s prices starting to rise slightly higher starting in 2027—although still not reaching the highs of the “No CCS” scenario.
In addition, the report also points to data suggesting that between 1,000 and 2,500 jobs could be created for each new-build power plant constructed with CCS technology, with jobs numbering 200-300 after construction is complete and 40-100 of those jobs at the plant itself. The paper said the construction of SaskPower’s Boundary Dam in Canada backs up the estimates, since more than 1,500 people have been employed during its construction with 41 operational employees at the plant. With the projection of 15 to 25 CCS installations in the UK by 2030—or 20 GW of CCS—the total annual number of jobs that would be created would be between 15,000 and 30,000 in the region, according to the report’s estimates.
Moreover, the Gross Value Added to the economy from CCS deployment is between “£2bn–£4bn per year by 2030 with a cumulative market value of £15bn–£35bn (depending on whether 10 GW or 20 GW of CCS capacity is installed respectively),” according to the report. And that value could rise even farther. “The International Energy Agency has projected that 964 GW of total installed CCS power generation capacity will be needed globally by 2050 to reach required emissions reductions as well as more than three gigatonnes of CO2 captured annually from industrial sources—this will create a global market worth over £100bn, much of it in developing countries,” the report said. “With even a modest share of this global market, UK GVA resulting from a share in the global CCS market could increase to between £5bn and £9bn per year by 2030.”
