IEA RENEWS CALL FOR GOVERNMENT INVESTMENT IN CCS

Tamar Hallerman
GHG Monitor
1/4/13

The International Energy Agency kicked off 2013 with a renewed call for the development and deployment of carbon capture and storage worldwide and promised to make the issue a priority in the coming year. In a short Jan. 1 release, IEA said the technology is a “necessity” for a global energy system that relies on fossil fuels for roughly four-fifths of its electricity generation but also seeks to clamp down on climate change. But the Paris-based organization, which plans to release an updated CCS roadmap later this spring, said high costs and lack of available policy incentives have stunted the technology’s deployment worldwide.

In order to kickstart momentum, IEA will argue in its first new CCS roadmap in four years that governments should make implementing CO2 storage site screening and development policies an “immediate priority.” “The idea is to put more emphasis on the issue of storage. Much too often the discussion of CCS revolves around capture costs. We tend to forget the need to make sure that we have properly sited storage reservoirs,” Juho Lipponen, head of IEA’s CCS Unit, said in an interview this week. “We’re going to recommend some more active policies governments and industry can enact to require more site screening.”

IEA will also call on governments to develop incentive policies to catalyze the industry in the short-term and ramp up large-scale demonstrations through 2020. “We will put a lot more emphasis on helping develop comprehensive policy frameworks to drive a new technology into the market,” Lipponen said. “We need to look at mechanisms like those that have been used for renewable energy to incentivize industry to actually invest in early CCS projects and offset first-mover risks.” He listed the United Kingdom’s proposed feed-in tariffs with contracts for difference as a promising incentive policy for CCS.

New Roadmap to Maintain 100+ Project Goal for 2020

Despite the fact that the CCS industry is currently not as far along as many had hoped for in 2009, the retooled roadmap will maintain IEA’s previous goal citing the need for 120 commercial-scale industrial and power-generation projects to come online by the end of the decade, Lipponen said. “We will not step down from our levels of ambition for CCS in general. That’s clear. Indeed we need on the order of 100 projects by the end of the decade to stay within the 2-degree Celsius goal,” Lipponen said. “Whether that will ever happen is a completely different question.”  The main difference between the new and the old roadmap is a greater sense of urgency to deploy the projects, he added.

IEA has long been a vocal advocate for the deployment of CCS technology. In its widely-cited 450 scenario, which aims to limit greenhouse gas concentrations in the atmosphere to 450 parts per million of CO2 to limit average global temperature increases to no more than 2 degrees Celsius over the next century, the agency CCS needs to account for one-fifth of emissions reduction efforts. Under that scenario, IEA estimated that 120 large-scale industrial and power generation projects would have to be deployed worldwide by 2020, increasing to 3,000 projects by 2050.

The agency, though, has constantly warned that nations are falling behind in the development of large-scale CCS projects. A report released last spring by the organization highlights “painfully slow” progress on CCS R&D and large-scale projects, concluding that development is “woefully off pace.” IEA Chief Economist Fatih Birol said last fall that the outlook for CCS in the coming years “does not look very bright” given recent trends in the energy industry. “We see CCS as very crucial technology, but as crucial as it is we don’t see much happening,” he said in a November speech.