Abby L. Harvey
GHG Monitor
8/29/2014
U.K. Secretary of State for Energy and Climate Change Edward Davey called for increased commitment to development of carbon capture and storage technology in a policy scoping document released by the Department of Energy and Climate Change earlier this month. “The U.K. is leading Europe in developing CCS technology, and the world’s first power CCS projects in North America will come on stream this year. But we can’t wait another 70 years. We need CCS to be commercial in a decade. The prize is a big one—with CCS we can achieve our carbon targets more cheaply and support over 15,000 jobs per year by 2030.” Davey wrote.
The document lays out a future pathway for the commercial deployment of CCS in three phases as the industry matures. First, the document says, is the deployment of first generation projects, which will be supported largely through government commercialization programs. “The Government considers that the quickest and most effective way to reduce the cost of CCS is to support the U.K.’s first commercial-scale project(s). A [first-of-a-kind] project is critical in establishing CCS infrastructure in the U.K., developing and testing the market-led commercial and legal frameworks for projects of this type, and thereby significantly reducing the risks and barriers faced by subsequent projects,” the document says.
Next is a transitional phase between heavily governmentally supported first generation projects and cost competitive mature technology. The final phase laid out in the document is market driven. “By Phase three we expect the CCS industry to have developed to a point where projects are fully commercial and are able to compete in the market on the basis of cost with other low carbon technologies,” the document says.
Funding Remains Hurdle to Technological Maturity
One factor hindering the commercialization of CCS is financial concerns, according to the document. “The Government has recognized that raising finance for low carbon energy and other major infrastructure projects, including CCS, from traditional sources may be challenging,” the document says. Two projects lie at the forefront of the U.K.’s efforts in CCS, White Rose and Peterhead, which both have multi-billion pound price tags, the document notes. To reduce this cost, according to the document, the technology must mature “Most new technologies reduce in cost as they develop and mature. Examples of this cost reduction theory include mobile phones, electric vehicles and photo-voltaic solar panels,” the document says. “For CCS, like other low carbon energy technologies such as offshore wind, this cost reduction is crucial for it to play a part in the U.K.’s electricity system to 2030 and in the longer term in U.K.’s wider energy system.”
The steps that have been taken thus far to bring CCS technology to maturity have not been enough, according to the document. “The current market in the UK, and internationally, is not delivering investment in CCS on the scale needed to reduce costs and enable widespread deployment of CCS in the 2020s. Deployment on this timescale is needed if CCS is to fulfil its potential and contribute to the Government’s long-term decarbonization objectives,” the document says. The government has identified several programs and tasks to correct this including:
- A £1 billion CCS commercialization program which will help to fund the deployment of the U.K.’s first commercial scale CCS projects,
- Electricity Market Reform which will “transform the U.K. electricity sector to one where low-carbon generation can compete with conventional, unabated fossil-fuel generation,”
- CCS Research, development and innovation, supported though programs like the £125 million CCS Research and Development program and the UK CCS Research Centre,
- Creating a regulatory framework conducive to the advancement of CCS and
- Engaging in international knowledge sharing.
Public Comment Requested
Throughout the document several “next steps” are identified to further the development of CCS in the United Kingdom. This includes working with industry to design a generic Contract for Difference (CfD) for CCS and explore options for how such a CfD could be utilized in the future and developing a policy for industrial CCS. Further, the document seeks public comment. “We welcome views on the issues identified in this document or more widely. … We will be engaging with the CCS Development Forum on these issues. We will also be discussing with those interested in the development of CCS, both individually and collectively, the issues raised. Over the past three years, the Government has issued a series of documents and consultations as policy on Electricity Market Reform and generic CfDs for renewables was refined. This document marks a continuation of aspects of that dialogue, and we anticipate further documents and consultations may be issued as detailed aspects of CCS policy are refined.” Comments are being taken until Oct. 23 and can be submitted to the DECC via email.