Tuesday, 23 November 2010


“Every little bit helps,” was the message from Chris Huhne, the Energy and Climate Secretary, when he gave his support to Saddleworth residents who want financial backing for a mini-hydro scheme they hope to see built at Dovestones reservoir in the Peak District. Using overflow water it could put enough electricity into the national grid to supply the needs of 100 homes, (assuming that they are very well insulated homes that is). It’s a good scheme, not least because it will promote the technology for mini-renewable projects and raise levels of public awareness. But with the planet’s population growing by 200,000 every single day I reckon that if it is completed it will meet the increasing world demand for electricity by only one minute.

I reflected on this when I spoke at a carbon capture and storage (CCS) conference organised by the European Commission in Brussels. As a means of preventing the emission into the atmosphere of CO2 from fossil fuel power stations and major industrial installations, CCS is the only game in town. The cause for celebration is that the Commission has, at long last, published the call for tender for developers seeking financial support to build a number of CCS demonstration projects across Europe. The financial mechanism to be used is the one I was the first to propose and makes use of ‘surplus’ carbon allowances from the EU emissions trading scheme. Alas, with today’s low carbon price it will not provide nearly as much money as was once hoped.

CCS is essential if we are to reduce the level of CO2 emissions by the 80-95% regarded as necessary, but progress is painfully slow. The call to tender was much delayed, and it is now suggested that most projects won’t be in operation until past the 2015 deadline (“No, no, no,” I said). Across Europe very few governments are on track to transpose the EU directive for the storage of CO2 into national law on time, and very few have made any independent financial provision to support CCS development. The UK is one of the few honourable exceptions on all counts.

We have two front running projects. Scottish Power looks set to win the ‘UK competition’ and will separate a small portion of the CO2 that would otherwise be discharged up the chimneys of the coal power station at Longannet, transporting it by pipeline for injection into former fossil fuel bearing rock beneath the North Sea. Then there is Powerfuel Power’s project at Hatfield, near Doncaster, where construction of a 900MW integrated gas combined cycle power station is proposed, with the CO2 separated pre-combustion and transported to the North Sea by a pipeline that could also serve many other power stations and industrial plants.

The new factor on the UK scene is the possibility that the CO2 might not only be stored but also used for enhanced oil recovery. The pressurised gas would push more oil out of depleted North Sea reserves, making better use of these resources, pleasing HM Treasury, and creating a much stronger financial incentive for CCS development. Equipping a conventional power station with CCS could effectively double the cost of the electricity it generates, making it about as expensive as heavily subsidised offshore wind generation. Coupling it with enhanced oil recovery would bring down the extra cost to only as much as the subsidy paid for onshore wind power, making CCS much more attractive, especially if the price of carbon rises from its present €15/tonne. If enhanced oil recovery developments take place as I have privately heard they might, listen out for a very big announcement in months to come.

Do we really need CCS, with all its related costs? Britain gets 35% of its electricity from coal and even more from gas, Germany gets more than 50% from coal alone, Poland nearly 90%. China, India, Russia, the USA, South Africa and Australia have all got huge coal reserves and intend to generate the majority of their electricity from this carbon-intensive fuel for many decades to come. If we don’t develop CCS, there is no chance at all of the world achieving a 50% reduction in CO2 emissions by 2050, the minimum amount needed to prevent average global temperatures rising by more than 2 degrees centigrade.

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