U.K. COMPANY SEEKS COMMENT ON CO2 PIPELINE INFRASTRUCTURE PROJECT

Tamar Hallerman
GHG Monitor
10/4/13

The U.K. branch of National Grid is seeking public input on a multi-user CO2 pipeline project proposed for northeast England. In a notice posted on its website last week, the London-based electricity transmission company said it is seeking comments on its Yorkshire and Humber CCS Cross-Country Pipeline project through Nov. 1. The company is looking to build the U.K.’s first major piece of CO2 pipeline infrastructure through the country’s industrial hub, which currently emits about 60 million tonnes of CO2 annually into the atmosphere.

The pipeline National Grid is pitching would run for roughly 45 miles onshore east to the North Sea, piping that CO2 an additional 55 miles offshore for storage in saline reservoirs and depleted oil and gas fields. The project would for now connect the planned 426 MW White Rose CCS project to the storage reservoirs. That new-build oxy-combustion project, run by an industry consortium that includes National Grid, Alstom, Drax Power Limited and BOC, was listed as a “preferred bidder” in the U.K. government’s £1 billion ($1.62 billion) CCS commercialization program earlier this year.

Pipeline Could Connect North Killingholme, Don Valley

If ultimately constructed, White Rose would capture more than two million tonnes of CO2 annually for storage, but National Grid said the Yorkshire-Humber project would have the capacity to transport up to 17 million tonnes of CO2 per year, capable of becoming a multi-user CO2 transport hub for the region.  “Creating a multi-user pipeline with facilities for other emitters to connect would provide the foundation for a future CCS network in the region and would increase capacity, minimize future disruption, speed up deployment and reduce deployment costs of CCS,” a project fact sheet states. “Such a network could capture tens of millions of tonnes of carbon dioxide every year and make a significant contribution to reducing U.K. emissions.”

The pipeline is located near two other planned CCS projects that could connect to the infrastructure project, but whose futures currently remain unclear. Work on one of those projects, a new-build 430 MW IGCC plant with possible biomass co-firing pitched by developer C.GEN, has slowed significantly over the last year. A C.GEN spokesman said the company’s North Killingholme project is progressing, though, and that it is being examined by the U.K. government’s Planning Inspectorate, but would not give further details.

The pipeline could also eventually connect to 2Co Energy’s massive Don Valley project, which is trying to line up enough financing to move forward after the U.K. government surprisingly declined to support the project in its CCS commercialization competition last year. The new-build 650 MW IGCC project would capture roughly 5 million tonnes of CO2 annually for storage, but is one of the costliest CCS ventures under development worldwide. 2Co Energy previously estimated that the onshore portion of the project would cost roughly £3 billion ($4.8 billion), and the offshore infrastructure, including a 250-mile pipeline, would cost another £2 billion ($3.2 billion). The project’s boosters had previously secured £1 billion ($1.62 billion) in financing for the project from a South Korean utility, and Samsung Construction & Trading and Linde AG had also both claimed 15 percent stakes in the project last year. However, project developers have been quiet over the last year as they quietly try to rebuild the project.

Electricity Market Reform

Both North Killingholme and Don Valley could seek to line up some operational support for their projects under the U.K. government’s electricity market reform legislation, which passed the lower chamber of Parliament earlier this summer and is expected to be enacted into law next year. That bill provides several major incentives for CCS, most notably feed-in tariffs with contracts for difference. Under that approach, the U.K. government would negotiate a long-term rate, or ‘strike price,’ with project operators for the price of power generated per MWh from fossil plants with CCS or other low-carbon technologies. Project operators would then sell their electricity to the market, with the government paying the developers the difference between the going rate on the market and the strike price.