CCS has had a rough ride, but energy policy under Theresa May has put the technology back on the agenda

When the UK voted to leave the European Union in June, it caused unprecedented political upheaval. But no one expected the transformation of the UK energy landscape that has taken place since the vote.

First, there was uproar when the Department of Energy and Climate Change (DECC) was abolished and its responsibilities folded into the new Department of Business, Energy and Industrial Strategy (BEIS). Initial dismay was eased as the ministerial team at the new department emerged, with Greg Clark (Secretary of State) and Nick Hurd (Minister for Climate Change and Industry) both widely respected for their understanding of the issues.

Then came the announcement that PM Theresa May was to re-examine the case for the Hinkley Point nuclear power plant, temporarily raising the hopes of many that the project would be scrapped. 

The next development was a parliamentary advisory group’s attempt to resurrect carbon capture and storage (CCS), which had seemingly been killed off last November, when the UK government cancelled its £1bn competition for a CCS pilot plant on the grounds that it was too expensive.

The cancellation came even though CCS is widely acknowledged to make meeting emissions targets cheaper. The Committee on Climate Change, which advises the government, said in a report on the government's Fifth Carbon Budget last year: “CCS is very important for reducing emissions across the economy and could almost halve the cost of meeting the 2050 target in the [UK’s] Climate Change Act.”

'Disappointing'

The move to cancel the competition was extremely disappointing and came out of the blue, says Luke Warren, CEO of the Carbon Capture and Storage Association. “It has had a very negative impact on the industry. A whole set of companies had invested a lot of money into developing these projects for nothing.”

Now, suddenly, CCS appears to be back on the agenda. In a new report published by the Parliamentary Advisory Group on CCS, the former Shell chairman Lord Oxburgh, who chaired the report, said: “I began this study … quite prepared to advise you to write off CCS as a part of UK energy policy. Our report recommends the opposite of this. I have been surprised at the absolutely central role which CCS has to play across the UK economy if we are to deliver the emissions reductions to which we are committed at the lowest possible cost to the UK consumer and taxpayer.”

The report recommends the creation of a CCS delivery company, similar to the body that delivered the London 2012 Olympics, adding that there is no technological justification for delay. CCS could be added to power plants today at £85/MWh, less than the cost of power from Hinkley Point. The CCS competition was costly because of how it was structured rather than the inherent costs of the technology, the report says.

The case for CCS

Warren of the CCSA said it is too early to tell what this government’s policy on CCS will be but  Sam Gomersall, commercial director of energy consultancy Pale Blue Dot, said: “The government is starting to see the case for CCS more broadly. The focus has been on coal and thermal power generation but CCS has a broader role to play in industry  and if we use hydrogen for heat and transport, CCS has a vital role to play there.”

A slight cloud was cast over the industry’s optimism when May announced that Hinkley Point would go ahead after all, but industry figures remain hopeful. “There is a risk that ministers might say that nuclear is the best way out of the current energy mix, but it is so long term [Hinkley will not be delivering power for at least a decade] that CCS will remain an important part of the mix,” Gomersall says.

Professor Stuart Haszeldine, of the School of Geosciences at Edinburgh University and a contributor to the parliamentary report, says CCS will be central to future UK energy policy because it has applications across the economy. “In industries such as steel, which requires the burning of large amounts of fossil fuel, CCS is the only way to clean up some emissions,” he adds. Other sectors, such as cement, fertiliser and waste could also benefit from CCS.

Some observers say decarbonising industry is key to scaling up CCS. Aniruddha Sharma, CEO of Carbon Clean Solutions, says a new plant his company is developing in India will capture carbon for less than $40 a tonne, which it will then use to make new chemicals to sell in the local market. This, he says, is not CCS but CCU (carbon capture and utilisation). “Utilisation is important because it offers a commercial and sustainability business case in a two- to five-year timeframe,” he says.

Smaller scale

CCU can be also applied at a much smaller scale than CCS. “With these £1bn projects, everyone gets quite nervous so you need mechanisms to protect people from liabilities – but with CCU projects, it is absolutely possible to capture carbon commercially,” Sharma adds.

What makes supporters of CCS more optimistic than they have been for a long time is the rapid ratification of the Paris Agreement. “The Paris Agreement will refocus attention on CCS because it is by far the most cost-effective way to achieve our climate targets,” says Gomersall.

CCS could also be boosted by the government’s controversial decision earlier this month to overturn Lancashire council’s ruling and allow Caudrilla to do horizontal fracking of gas, unlocking far more home-grown gas generation potential.

In a letter to Amber Rudd, then secretary of state for energy and climate change, in July, the Committee on Climate Change argued that CCS, combined with gas-fired power generation, “could allow for flexible ‘mid-merit’ power generation to help security of supply, with recoverable heat available for heat networks”. It also said that “Investment proposals for new gas-fired plants would be strengthened if suitably located near potential CCS clusters.”

carbon capture  energy policy  BEIS  DECC  Paris Agreement