Friday 24 November 2017

Carbon Capture and Storage


Report from the National Audit Office on Carbon Capture and Storage: 'There are still no examples of the Technology Working' Jan 2017

"The Department has now tried twice to kick start CCS in the UK, but there are still no examples of the technology working. There are undoubtedly challenges in getting CCS established, but the Department faced an uphill battle as a result of the way it ran the latest competition.Not being clear with HM Treasury about what the budget is from the start would hamper any project, and caused particular problems in this case where the upfront costs are likely to be high. The Department must learn lessons from this experience if it is to stand any chance of ensuring the first CCS plants are built in the near future."
Amyas Morse, head of the National Audit Office, 20 January 2017
The Department for Business, Energy & Industrial Strategy (the department) has not achieved value for money for its £100 million spend on the second competition for government financial support for carbon capture and storage, according to the National Audit Office.
Carbon Capture Storage (CCS) is a process to avoid the release of carbon dioxide (CO2) into the atmosphere. CCS has the potential to help the UK achieve its ambitious targets to reduce CO2 emissions, if it is used in the power and industrial sectors. The Department also spent £68 million on the first competition on support for CCS, which it cancelled in 2011. Today’s report found that the Department’s plan to use a second competition to develop and deploy carbon capture and storage was ambitious, but ultimately, unsuccessful.
Achieving this goal was challenging because the untried nature of the technology meant the costs and benefits of the proposed projects were inherently uncertain. Given the level of challenge, it was an achievement for the Department to sustain negotiations with the preferred bidders to the point where it gained valuable technical and commercial knowledge about how to deploy the competition projects. But any value that could be gained is contingent on the Department applying the lessons it and the sector has learnt as a result of the competition.
The NAO found the Department began the competition without agreeing with HM Treasury on the amount of financial support available over the lifetime of the projects. This ultimately contributed to HM Treasury’s decision to withdraw £1 billion of funding from the competition, leading to its cancellation, as it was concerned about future costs to consumers. The Department had, however, designed the competition so it could withdraw from supporting its preferred bidders without incurring cancellation costs.
The terms of the competition contributed to one of the two shortlisted projects being unlikely to reach the construction phase. The Department funded two developers to undertake work that would reduce the commercial and technical risks surrounding the construction of the first CCS plant. One of the two shortlisted projects, backed by a consortium, was not able to present a proposal compliant with the Department’s risk allocation as it was struggling to allocate risks between the parties involved. The other competition was more commercially viable but would have had fewer benefits for reducing the costs of subsequent CCS projects.
Many stakeholders think the government needs to carry more risk if it is to enable CCS to be deployed affordably to consumers. The Department’s approach to allocating risk was in line with wider energy policy. But following the competition, many stakeholders think the government should bear more risks, particularly over stored CO2. Government taking a greater share of the risk could reduce delivery costs but would expose taxpayers to losses in the event of risks materialising. The NAO found that flaws in the Department’s design and implementation of its Levy Control Framework, which caps the costs of certain consumer-funded policies, also impacted on CCS investors’ confidence.
In developing the next phase of CCS, the NAO recommends that the Department should maximise the potential value from the competition by incorporating into its new CCS strategy the lessons it and the key stakeholders have learned.
Full article here:
https://www.nao.org.uk/report/carbon-capture-and-storage-the-second-competition-for-government-support/

Carbon Capture and Storage Association


The Lobby group in the UK for the CCS industry is the Carbon Capture and Storage Association.

Website and key pages are here:

http://www.ccsassociation.org/

http://www.ccsassociation.org/what-is-ccs/

http://www.ccsassociation.org/press-centre/ccsa-press-releases/

It appears to be 'whistling a happy tune' after the fiasco of having a competition with a £1bn 'prize' offered by the UK government cancelled after it failed to produce any results in 7 years (2008-15).

It's press releases are a good source of news and developments in the sector, though all put a positive spin on developments.

A list of the press releases for the last couple of years are here. I have put links on some you can see the rest with the link above.

CCSA press releases

2017

12th October

The UK Government today published its Clean Growth Strategy. As part of this Plan, the Government has reaffirmed its commitment to developing CCS.

5th October

On the 5th October, the CCS study "Clean Air, Clean Industry, Clean Growth: How Carbon Capture Will Boost the UK Economy" was published. The CCSA welcomes this study.

28 April

The CCSA welcomes the Public Accounts Committee report "Carbon Capture and Storage". The report is a summary of the evidence session that was held on the 30th March and sets out a number of recommendations; including the need for Government to set out a "clear, joined-up strategy for deploying CCS in the sectors where it is needed to achieve decarbonisation at least cost".

20 January

The CCSA welcomes today's launch of the National Audit Office report "Carbon Capture and Storage: the second competition for government support". On the same day, the CCSA is formally endorsing the key conclusion from the report of the Parliamentary Advisory Group on CCS; CCS projects in the UK power sector can be cost-competitive with other low-carbon technologies from day one.
View the CCSA press release 

2016

15 November

The CCSA welcomes today's launch of the Global Status of CCS: 2016 Summary Report and the IEA report "20 Years of Carbon Capture and Storage".

4 November

The CCSA welcomes today's announcement by the Oil and Gas Climate Initiative to launch a $1billion fund to support low-carbon technologies (including a large proportion for CCS).

6 October 

The CCSA welcomes today's announcement by the Norwegian Government to move ahead with a number of CCS projects.

12 September

The CCSA welcomes today's launch of the Parliamentary Advisory Group on CCS report "Lowest Cost Decarbonisation for the UK: The Critical Role of CCS".

11 July

The CCSA welcomes today's launch of the H21 Leeds City Gate report, which sets out how to convert the UK's gas grid into a hydrogen network - using CCS to reduce emissions.

29 June

The CCSA has today launched a new report on “Lessons Learned: Lessons and Evidence Derived from UK CCS Programmes 2008 – 2015”. 

22 March

The CCSA today welcomes its new Honorary President, The Rt Hon Baroness Liddell. 

10 February

The CCSA welcomes today's Energy and Climate Change Committee report into the Future of Carbon Capture and Storage in the UK.
Select Committee Report
Letter of Select Committee to Amber Rudd (Secretary of State for Energy)
Response of Secretary of State basically 'we'll form a committee to look at it, but we'll only back it with £100m not £1bn"

2015

25 November

On the 25th November 2015, the Government announced to the London Stock Exchange that the £1 billion funding for the CCS competition is no longer available.
The CCSA responded with the following Press Release.





Analysis of why the UK Carbon Capture and Storage 'Competition' was cancelled in 2015

http://www.ccsassociation.org/press-centre/reports-and-publications/lessons-learned/

The CCSA has published a new report entitled “Lessons Learned – Lessons and Evidence Derived from the UK CCS Programmes, 2008 – 2015”. Particularly focused on the recent CCS Competition, which was cancelled in November 2015, the report sets out 36 key lessons for industry and policy makers. These lessons are based on interviews with the two preferred bidders in the previous CCS Competition; the Shell Peterhead project and the Capture Power White Rose project, as well as interviews with a number of other companies interested in developing CCS projects.
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