There was no way for the world to meet its carbon targets without carbon capture and storage (CCS), said Lord Oxburgh (CB), as he opened an event in Parliament on Tuesday entitled ‘How to build a 10GW CCS Sector in the UK by 2030’.
The peer was speaking at an event organised by the All Party Climate Change Group and the Energy Technologies Institute (ETI), who had commissioned Element Energy and Pöyry to explore scenarios for building the UK CCS sector to 2030.
Jo Coleman, director of strategy, ETI
Over the last seven years the ETI had been looking at pathways to transition the UK energy system, and the value of CCS was always too great to ignore, said Coleman. She suggested it was potentially the most important technology in the transition to a low carbon economy.
Coleman went on to outline the ETI’s work on identifying storage sites around the UK, in technological innovation, and in the field of financing CCS.
She explained that the new report showed policy makers what needed to happen over the next two parliaments to develop a credible CCS sector by 2030.
George Day, head of economic strategy, ETI
There were three pathways in the report which gave credible routes to achieve the desired deployment of CCS, Day told audience members.
He argued it was feasible and affordable to build a 10GW CCS Sector in the UK by 2030, provided it was developed in a coordinated way. He added there was potential for the strike prices per unit of electricity to come down quickly to at or below £100 / MWh by the mid 2020s.
Day outlined how the sector needed £21bn to £31bn of capital expenditure up to 2030. To gear up this investment there was a need to progress demonstrator projects, which he felt would provide the seeds for future development of cluster areas of CCS. He also said there needed to be more investment in storage appraisal. He added that Contracts for Difference (CfDs) needed to be awarded to the next stage of projects without delay. Finally, he said there needed to be strong signals from policy makers about their support for the technology.
Mike Thompson, head of carbon budgets, Committee on Climate Change
Thompson felt that when you looked at how to meet 2050 carbon targets, CCS was one of the most important options out there. It allowed the industrial sector to reach potentially negative emissions, he explained.
While he welcomed the progress made, he also regretted that the development of the technology thus far had been slower that envisaged.
He also said that the UK needed to lead in this sector, or else it would never be able to meet the economies of scale required that would make the technology affordable for consumers.
He went on to question whether, given the costs involved, it was necessary to achieve a 10GW CCS sector in the UK by 2030, saying that a 5GW target could be more realistic, and act to smoothen out the cost pressures this would cause.
In conclusion he said this could not all be left to the market but a partnership approach with strategic leadership provided by government.
Amy Clemitshaw, Deputy Director, Office of Carbon Capture and Storage, DECC
Amy Clemitshaw from DECC welcomed the ETI’s analysis. She felt the report was useful intervention that would feed into the Government’s consideration of how to best meet carbon reduction targets.
The priority for the Government was to keep on the lowest cost decarbonisation route possible, she told audience members. She also outlined more generally the support given to CCS by this Government, who she said were helping to develop and commercialise CCS at scale.
She spoke in further detail about how the Government was supporting competition, noting that they had allocated £1bn of capital grants and two CfDs to preferred bidders. Any pursued option would have to provide value for money, she noted. The Government was already pre-notifying the European Commission of an impending state aid application, and final bids would be made at the end of year.
She also outlined how the Government had been investing in research and development, in power and industrial CCS. Half of their budget was for storage site appraisal, precisely because it was one of the most challenges aspects of greater deployment, she explained.
On enabling investment decisions on future projects, she said the Government was working on thinking through the evolution of the financing mechanisms to support CCS.
Samuela Bassi - policy analyst, Grantham Research Institute, LSE
Samuela Bassi picked up a point in the report that not developing CCS now would lead to greater costs in future. She presented evidence that supported those found in the ETI report; energy modelling suggested that scenarios that did not include CCS were all far more expensive, she explained.
CCS was expensive yes, but she stressed that evidence showed that costs would fall when the technology was deployed. She also spoke about the importance of creating a framework of policy certainty.
She cautioned that the development of CCS should not be seen as an excuse to continue emitting carbon as we were at the moment.
Jeremy Nicholson – director, Energy Intensive Users Group
The Energy Intensive Users Group was in favour of cost effective carbon reduction measures, said Nicholson.
Their view was that it should not be the role of the Government to pick arbitrary deployment targets. The market should be the decisive force, he said.
He felt it was right to start with the power sector, but highlighted vis-a-vis the industrial sector the risk of carbon leakage if costs fell too heavily on them.
He also expressed concern around the public attitudes towards the technology.
In conclusion he stressed that the “credibility of carbon targets rests on the deployment of CCS”.