Tamar Hallerman
GHG Monitor
06/15/12
In order to keep global temperature increases at a manageable level, nations must dramatically cut back on coal use and install advanced systems such as supercritical and carbon capture and sequestration technologies on most new and existing fossil fuel-fired units as soon as possible, the International Energy Agency said. In its most recent biennial assessment of nearly a dozen clean energy technologies, IEA said that while reaching its goal of limiting global temperature increases to 2° Celsius is possible, investment in clean energy technologies is lagging and the window for reaching that target is rapidly closing. The report stresses that because of that reality, the importance of swiftly developing CCS technology is particularly crucial. “Room to maneuver and still reach the [2° Celsius] emissions target is shrinking fast,” the report says. “This leads to increasing pressure to consider retrofitting existing power plants and industrial facilities with CCS. Requirements that make new facilities CCS-ready today will help minimize additional costs of retrofitting in the future.”
Of 10 clean energy technologies that hold potential for energy and greenhouse gas emissions savings, nine are not on track to meet the benchmarks needed to achieve the 2° Celsius goal, the report says. Of those technologies, only the most mature, such as hydropower and onshore wind, are making real progress, according to the report. The Paris-based research organization said that CCS RD&D work is notably lagging far behind the level necessary to achieve emissions goals. Under IEA’s 2° Celsius pathway—largely on par with its 450 parts per million scenario—roughly one-fifth of all emissions savings are projected to come through CCS in 2050. The rest of avoided emissions are expected to come from energy efficiency efforts and the deployment of lower-carbon energy technologies like natural gas and rewables. While the report concludes that deploying CCS to the degree recommended in the 2° Celsius scenario—38 large-scale power generation and 82 industrial capture projects online by 2020—is technically feasible, current investment patterns are “particularly worrisome” given that no full-scale projects are currently in operation. Governments and industry will have to make a “significant effort” to scale-up projects over the next decade to get back on track, the report says.
Governments Must Incentivize CCS
While many CO2 capture technologies are available today, most are capital intensive and costly to operate. Because of that reality, governments must initially be willing to step in with abundant financial and regulatory support, the report says. In the near term, governments can help foster CCS deployment by setting stringent emissions reduction targets and offering technology-specific support to incentivize first-mover large-scale demonstration projects, according to IEA. “It is critically important that governments and industry redouble their efforts in commercial-scale demonstration, in various locations and technical configurations,” the report says. “This must include commercial-scale storage projects that demonstrate safe and effective CO2 storage and mechanisms to encourage knowledge exchange between projects to maximize learning between storage projects.” Additionally, enacting technology-neutral policies such as a price on carbon could also help provide the long-term certainty needed for the private sector to invest in CCS, the report says.
The analysis also recommends that governments make an effort to examine legal and regulatory frameworks already in place to ensure that none impede CCS demonstration or deployment. It also suggests that governments begin planning out CO2 transport and storage infrastructure, as well as pursue public outreach programs to help inform people about CCS. IEA particularly stressed the need for CCS deployment for industrial sectors like iron, steel and cement.
The report warns that any plans to delay or abandon the development of CCS as a mitigation option for greenhouse gas emissions “may place untenable demands on other emissions reduction options” if policy-makers want to stay within the 2° Celsius pathway. The agency said failure to deploy CCS could increase investments required in electricity generation by 40 percent if leaders choose to rely exclusively on other clean energy technologies under the 2° Celsius plan. “Removing CCS from the list of options to reduce emissions in electricity generation increases the required capital investments necessary to meet the same emissions constraint by between 40 percent and 57 percent in the electricity sector relative to the incremental capital investment required to reach the [2° Celsius target],” the report says.
Other Coal Technologies Needed
The study also emphasizes the need to drastically cut down on the burning of coal for electricity generation in order to achieve substantial emissions reductions. It says that the increase in coal use in developing countries like China and India is the “single most problematic trend in the relationship between energy and climate change.” IEA says that in order to achieve 2° Celsius goals, global demand for coal needs to decrease by roughly 46 percent by 2050 and coal-fired generation must fall by at least 43 percent in that period. But given that coal generation will still likely be utilized for decades to come, the study also recommends improving the efficiency of conventional coal-fired power units even if they do not incorporate CCS technology. It calls for supercritical technology at a minimum to be installed on all coal units, as well as integrated gasification combined cycle and ultra-supercritical technologies in the future. It says that governments should continue to actively promote RD&D work on advanced coal technologies as well, while also shuttering some older, more inefficient units early and prompting fuel switching to occur.
Ultimately, the report says that clean energy investments need to double by 2020 in order to get back on track towards IEA’s emissions reduction targets, with roughly $36 trillion in investments required by 2050. IEA Executive Director Maria van der Hoeven called the current investment climate for clean energy technologies “alarming.” “Knowing what we do about the link between GHG emissions and climate change, it is disturbing to see that investments in fossil-fuel technologies continue to outpace investments in best available clean energy technologies. Or, that governments and private enterprises continue to build energy capacity that will have detrimental effects on people and the planet for decades to come,” she said. “Continued heavy reliance on a narrow set of technologies and fossil fuels is a significant threat to energy security, stable economic growth and global welfare, as well as to the environment.”
