U.K. PARTNERSHIP ISSUES RFP FOR GAS-CAPTURE PROJECTS

Up to £20 Million Up For Grabs Under ETI Solicitation

Tamar Hallerman
GHG Monitor
9/20/13

A public-private partnership based in the United Kingdom is soliciting proposals for natural gas-capture projects, floating the possibility of up to £20 million ($31.8 million) in funding for the design, construction and operation of a small demonstration unit. The Energy Technologies Institute (ETI), an British R&D group established by the U.K. government and energy industry giants including BP, E.ON and Shell, issued a request for proposals Sept. 16 seeking responses from the developers of “potentially breakthrough technologies whose development plans are sufficiently developed to move directly into the detailed design, construction and testing of a multi megawatt pilot/demonstration plant.” ETI said it is searching for projects with the potential to reduce the costs of operating a gas capture plant that is also ready to “catch the wave of CCS implementation in gas-fired power in the U.K.,” expected to occur in the 2020s and early 2030s.

The RFP builds off a current ETI collaboration with the Canadian technology development company Inventys Thermal Technologies, the Howden Group and Doosan Power Systems. ETI said that project, which kicked off work in 2011, is expected to wrap up by the end of the year, and that there are plans in the works for scale up into a detailed design phase ahead of the construction of a 5 MW pilot unit capable of capturing 95 percent of CO2 emissions. “The ETI will undertake detailed assessment of any proposal selected following the RfP response to confirm the projected benefits and readiness to undertake a project, in parallel with the results from the initial phase of the Inventys-led project, which is due for completion by the end of the year. The ETI will then decide whether it will invest up to £20m over three years in the detailed design, assembly and testing of a U.K. demonstrator plant,” ETI said in a statement.

ETI Program Manager for CCS Andrew Green said natural gas’ recent expansion within the U.K.’s energy mix means that investing now in CCS is critical as policymakers plan for the years to come. “We expect that by 2020, there will be 30GW of gas-fired power capacity, some of which will require retrofit or upgrade to include CCS by 2030 if we are to meet U.K. CO2 reduction targets,” Green said in a statement. “Newly developed technology which reduces costs and accelerates deployment by 2030 is therefore critical.” ETI said prospective developers must submit notification of an intention to submit a proposal by Oct. 31. The closing date for final submissions is Nov. 28.

U.K. Sees Natural Gas Expansion

ETI’s announcement comes as natural gas generation continues to expand in Britain, especially now that some shale reserves have been found onshore in northwest England. U.K. Secretary of State for Energy and Climate Change Ed Davey offered a full-throated endorsement of the fuel source during a closely watched speech earlier this month, in which he underscored that exploiting shale gas in Britain would still be in step with meeting the country’s climate change targets. “Gas, as the cleanest fossil fuel, is part of the answer to climate change, as a bridge in our transition to a green future, especially in our move away from coal,” Davey said in a speech at the Royal Society Sept. 9. “We have to face it: North Sea gas production is falling and we are become increasingly reliant on gas imports. U.K. shale gas could increase our energy security by cutting those imports.”

With the rise of gas in Britain, carbon capture for the fuel source has also gained attention there recently. A natural gas-CCS retrofit in Scotland was selected by the British government as a favorite to move forward as part of the country’s £1 billion ($1.59 billion) CCS demonstration competition earlier this year. Meanwhile, members of the opposition Labor Party in the U.K. Parliament introduced an amendment to a major electricity market reform bill earlier this year that would have set a tighter emissions performance standard for power generators and all but required CCS technology to be installed on all fossil generation, including natural gas. However, that amendment was later withdrawn before coming up for a vote.

Obama’s Gas-Capture Proposal Appears Dead

Environmentalists have long argued that governments must also move forward with RD&D work for CCS on natural gas plants—in addition to coal units—if policymakers are serious about truly limiting global temperature increases to 2 degrees Celsius. “Between now and 2030, world fossil use for power is projected to almost double. Without CCS on both gas and coal, it’s ‘game over’ on climate change,” the Clean Air Task Force’s John Thompson and Camilla Svendsen Skriung of the Norwegian Zero Emission Resource Organization wrote late last year. But in Washington, the topic has become somewhat politically volatile given the runaway popularity of natural gas. The nomination of the Obama Administration’s pick to lead the Federal Energy Regulatory Commission Ron Binz now appears imperiled given previous remarks that natural gas will be a “dead-end” fuel without CCS in the decades to come under a carbon-constrained future.

Meanwhile, the White House has only recently begun looking at incentivizing the capture of emissions from natural gas plants. While the Department of Energy’s CCS demonstration program includes some large-scale projects that produce synthetic gas or capture CO2 from gas processing facilities, there are currently no large-scale projects in the works there that incorporate capture technology onto more efficient NGCC plants. President Barack Obama’s FY 2014 budget request for the Department of Energy notably recommended the creation of a new $25 million competitive inducement prize for the first to develop a commercial natural gas combined cycle plant that also captures and stores at least 75 percent of its CO2 emissions. That proposal, however, appears to be dead on Capitol Hill given that the House version of the FY 2014 Energy and Water Appropriations bill that passed earlier this summer does not include funding for the program. The Senate version of that bill does not mention funding for natural gas capture projects either.

Despite the lack of political incentives, technology developers have made modest moves on their own in recent years to test natural gas-capture systems. Summit Power and the Linde Group announced a partnership in February to develop commercial-scale natural gas plants that capture up to 90 percent of CO2 emissions. Meanwhile, GE announced plans last year to partner with the Norwegian technology development company Sargas AS to also build natural gas plants with carbon capture.