It was always on the cards that the government would launch a new scheme to encourage the development and commercialisation of carbon capture and storage (CCS). It’s generally accepted by policymakers that CCS is going to be a necessary component of any energy and environment policy for the next decades, and you can hardly trumpet the benefits of what’s currently, let’s face it, a non-existent technology without doing something to help bring it into existence.
The latest competition to develop CCS and build pilot schemes is better thought out than the previous government’s, notably because it doesn’t limit the competition to one particular technology. In the previous scheme, only post-combustion processes, which ‘scrub’ CO2 out of power station flue gases by passing them through a solvent which dissolves the gas, were considered; this was because it was though more commercially attractive, because it could be retrofitted to existing power stations, especially those fuelled by coal.
But this instantly ruled out a great deal of research which had been done into pre-combustion carbon capture, where the fuel is converted into a mixture of carbon monoxide and hydrogen by treating it with steam. The monoxide is then oxidised to carbon dioxide with more steam and separated to be stored, while the remaining purified hydrogen is burned to generate energy with no further CO2 production.
Pre-combustion CCS is seen as more promising technology by many in industry, in part because it allows all the stages of the process to be optimised, increasing the efficiency of the plant and therefore producing cheaper electricity. One of the drawbacks of post-combustion is that it reduces the efficiency of a power station by up to 20 per cent. And like post-combustion, all of the different phases of the process have been demonstrated at an industrial scale, but never put together into a single process.
And therein lies the problem. One reason that the government funds CCS is that CCS can’t possibly work without government intervention: emitting carbon dioxide has to be more expensive than storing it, otherwise companies will simply take the cheaper route and allow their chimneys to belch away. Of course, this thinking says that companies are motivated only by profit and not by any concerns for the environment — a philosophy which could use some examination, we think.
This means that CCS absolutely requires a carbon price to be set at a realistic level, unless the CO2 itself can be turned into a revenue stream — something which isn’t likely at the levels at which power stations produce it. And to set a realistic level, we have to know how much CCS will cost.
That’s led to problems in the past. The scrapping of the only scheme left on the previous CCS competition, at Longannet power station in Scotland, was mainly due to the cost of piping CO2 from the station to the exhausted North Sea gas well where it was due to be stored. That’s something that isn’t subject to the technology used to capture the CO2, and it remains a concern.
Even with the expanded scope of the new competition, there’s no guarantee that a scheme can be brought in at less then £1bn, which is the maximum the government is putting in to develop the winning project. The result could well turn out to be the same as the previous competition — a decreasing number of entries, all of whom eventually pull out.
Of course, there are those who question the logic behind CCS itself. Environmentalists see it as a distraction from the real goal of generating CO2-free energy, and say that it encourages societies to continue burning fossil fuels. But while fossil fuels exist, and are relatively cheap, they will be burned. Developing CCS technology in the UK doesn’t mean that we’ll be able to export it, but it does put UK companies in a good position to act as consultants on overseas projects.
Other arguments insist that public money should be put into nuclear or existing renewable technologies, which can deliver CO2 reduction now, without the need for time-consuming development of new technologies. However, energy policy specialists insist that CCS development is a good use of money; that fossil fuels need to remain part of the energy mix, for reasons of diversity and the relatively low cost of gas and coal; and that capturing the carbon is the only way to do this without contributing to global warming. A whole other argument, of course.
Despite all this, the new competition is good news. It opens up new avenues for technology development, and indicates government’s commitment to the technology — an important factor for companies needing to make investment decisions. But it has to be accompanied by the rest of the policies needed to make it work. It’s increasingly clear that the energy landscape is shaped by government action and not market forces. Whatever technologies we need will have to be pushed into shape — they won’t appear of their own accord.