Energy: filling holes

By Richard North - September 5, 2022

As we lurch inexorably towards the appointment of a new prime minister, there is little long-term relief to be expected on energy policy as all the candidates, without exception, have bought into the Kool Aid of “net zero”, under which policies initiated by their predecessors will stay in place, unaffected by the new Downing Street tenant.

One of those policies, for reasons which will be explained in this article, will take on a special significance in the ongoing energy crisis, a policy defined by two words, “carbon capture”.

Now morphed into the acronym CCUS, standing for Carbon Capture, Utilisation and Storage, this back in 2007 in the wake of the fourth assessment report from the IPCC in September 2007 became one of the great white hopes for a carbon-free future.

At that time, the Blair government had committed to a 60 percent reduction in CO2 emission by 2050, and an interim target of 26-32 percent reduction by 2020. Central to achieving those targets, as a “key mitigation option”, was the application of untried CCUS technology to fossil fuel electricity generation plants.

Anticipating the IPCC report, the UK government gave the technology a boost when the Chancellor announced in the March 2007 Budget a financial package for “a competition to develop the UK’s first full-scale demonstration of carbon capture and storage”, starting that November.

As set out in the UK’s Low Carbon Transition Plan, published in July 2009, the idea was to have running by 2020 no less than four commercial-scale CCUS projects, backing up a statutory requirement that any new coal power station should be capable of operating CCUS.

Amongst those considered for the technology were the Kingsnorth and Longannet plants, both of which have now been closed, and the giant Drax plant in Yorkshire, which has largely been converted to burning biomass.

Despite a £1 billion budget being allocated in the 2010 Spending Review, by 2011, the competition was in such great trouble that it had to be cancelled. The National Audit Office (NAO) later reported that it had been launched with insufficient planning and recognition of the commercial risks.

With commercial scale carbon capture and storage technology in the UK still no further forward, it gave insufficient time to meet the projected timetable, blasting a huge gap in the UK’s low carbon power system. This gap, the Green Alliance complained, would eventually have to be filled by the construction of an additional 37 GW of offshore wind.

The government’s response to its own failure was to set up a Carbon Capture and Storage Cost Reduction Task Force which in late 2012 published an interim report confirming that fossil fuel power generation with CCUS had the potential to compete cost-effectively with other low-carbon forms of energy in the 2020s.

In what now seems more like a fever dream, the task force suggested that the sector would be able to generate electricity at a levelised cost approaching £100 per MWh by the early 2020s, and at a cost significantly below £100 soon afterwards.

Nevertheless, it seems to have taken the task force until October 2017 to produce advice on the steps needed to reduce the cost of deploying CCUS in the UK, by which time the implementation timescale had slipped a decade to 2030.

Thus advised, in 2017, the government announced a new approach to CCUS in its “Clean Growth Strategy”, demonstrating its commitment to the scheme in 2015 by axing the £1 billion grant which had been allocated to fund the development of commercial-scale plants. Schemes in Peterhead and Drax in Yorkshire were abandoned.

By July 2018 the Task Force reported that there were now over twenty CCUS projects globally, but it remained a pre-commercial technology. Mrs May’s energy and clean growth minister, Claire Perry, responded by renewing the government’s commitment to the technology, “subject to the costs coming down sufficiently”.

She announced an action plan designed to bring the first CCUS facility in the UK online from the mid-2020s, deploying the technology “at scale” during the 2030s. The coal industry, meanwhile, was using carbon capture as a way of selling “clean coal” and keeping the industry alive, a ploy which did little to popularise the technology.

By now though, the application was broadening to cover a wider range of emissions, so the concept was being applied to industry “clusters”, the first one of which was announced in July 2021 in Teesside.

Already, in 2020, Johnson had been prattling about his “ten-point plan for a green industrial revolution”, point 8 was devoted to: “Investing in carbon capture, usage and storage”.

“We will invest up to £1 billion to support the establishment of CCUS in 4 industrial clusters”, he warbled, “creating ‘SuperPlaces’ in areas such as the North East, the Humber, North West, Scotland and Wales”. This was to be “an exciting new industry to capture the carbon we continue to emit and revitalise the birthplaces of the first Industrial Revolution”.

The UK’s Climate Change Committee’s Sixth Carbon Budget made it clear “that CCUS is a necessity, not an option, for reaching net-zero emissions”, as the technology was also to be used for producing low carbon hydrogen.

Why now the pursuit of CCUS becomes of immediate importance and topicality is explained in part by a recent article in the Guardian which reviews a report on CCUS by the Institute for Energy Economics and Financial Analysis (IEEFA).

In short, the Institute finds that the technology – for all its high-level advocates and supporters – simply doesn’t work, having examining 13 flagship cases (10 in operation, two that have failed and one that has been suspended) comprising about 55 percent of the total nominal capture capacity.

In short, it tells us that failed/underperforming projects considerably outnumber successful experiences. The successful CCUS exceptions mainly exist in the natural gas processing sector serving the fossil fuel industry, which have no impact on reducing emissions.

In no instances, has there been a successful scheme applied to the post-combustion separation and sequestration of carbon dioxide, which is the primary purpose of the technology in abating emissions. Thus, the ability of CCUS to remove emissions from fossil fuel electricity generating plants has yet to be demonstrated.

“Carbon capture has a long history”, the report concludes – of failure. Overall results, the report author says, “indicate a financial, technical and emissions-reduction framework that continues to overstate and underperform”.

Apart from the very obvious effect of making net zero targets unreachable, there is a more immediate downside to the CCUS project, hinted at – but not explained – in this piece. The article is about the building of another new CCGT plant, this one at Keadby in North Lincolnshire.

Rather than being constructed to permit a CCUS retrofit, this plant is capable of being modified so that it can be fuelled by hydrogen, for which purpose it will need significant, high-volume storage – exactly the same facility which might otherwise have been used for CO2 storage in a CCUS scheme.

Then, there is the vexed question of natural gas storage, with this article explaining how we rely on gas stored on the continent to top up our winter stocks which, if available this winter, must be purchased at great expense, even though having been originally supplied by the UK.

Once again, the lack of gas storage is being shown up as a serious flaw in our gas supply system, yet we are looking at the shortage of the very same facility that is potentially used for CCUS.

In other words, it turns out that CCUS does not augment existing systems. It is a competitor for the same facilities. What is used for CCUS cannot be used for other purposes, and therefore its overall effect is to weaken national resilience.

Furthermore, the finance allocated for CCUS – now largely from the private sector, topped up by a billion pounds from the taxpayer – drains resource from other applications, while the focus on carbon capture has distracted planners from dealing with our shorter-term needs.

This is a legacy which the new prime minister must address, ditching a fantasy industry that relies on burying carbon dioxide in holes in the ground. No politician should need advice on what to do when in a hole, but the next prime minister will have to be rather more creative when the holes have already been dug.