By Geoff Giordano
Contributing Author, Cornerstone
With the release of its latest global status report1 in October, the Global Carbon Capture and Storage Institute (GCCSI) sees progress in CCS projects but says more work needs to be done to overcome policy barriers as well as demonstrate operational feasibility and present business cases for expanding the use of CCS.
In an exclusive interview for Cornerstone, GCCSI chief Brad Page echoed key aspects of the report, “The Global Status of CCS: 2013,” and detailed how his organization balances the reality of coal’s primacy as a fuel with the desire to curtail greenhouse gas emissions enough to hold the increase in global temperature to below 2°C in the coming decades.
Two coal-fired plants expected to come online in the U.S. and Canada in 2014 could be beacons for the capture and sale of CO2 for enhanced oil and gas recovery—providing vital examples of how coal with CCS can deliver low-carbon electricity and increase domestic oil production.
“We know that fossil fuels will continue to be the world’s primary source of energy,” Page noted. “Therefore, more projects are needed, especially in the power sector and in energy-intensive industries, where none currently exist.”
Despite the hurdles to overcome, Page remains confident in GCCSI’s mission.
“I consider the damaging effects of climate change to be one of the greatest challenges the world faces today,” said Page, who joined GCCSI in August 2011 after a seven-year stint heading the Energy Supply Association of Australia.2 “CCS has a very real role to play as one of a group of key technologies needed to tackle this challenge. And the Institute offers the opportunity for me to play a part in helping CCS to deliver on the potential that it promises.”
GCCSI’s status report sounds some positive notes:
- A dozen large-scale CCS and carbon capture utilization and storage (CCUS) projects in operation around the world are keeping 25 million tonnes per year (Mtpa) of greenhouse gases (GHGs) from entering the atmosphere. That total is predicted to increase to 38 Mtpa by 2016 with the
construction of eight CCS projects.
- Four new CCS/CCUS projects have become operational since 2012. Seven large-scale projects are operational in the U.S., two in Europe, and one each in Canada, South America, and Africa.
- The U.S. leads the world with 20 CCS projects in five
categories of planning or operation, followed by Europe with 15, China with 12, and Canada with seven.
- Two coal-fired plants—Southern Company’s Kemper County Integrated Gasification Combined Cycle Project in Mississippi and SaskPower’s Boundary Dam in Saskatchewan, Canada—are expected to become operational in 2014 as the world’s first such facilities incorporating CCS. The plants are to provide carbon dioxide for enhanced oil recovery (EOR)—an established practice in the oil and gas industries.
“The more favorable economics associated with the revenue stream generated from the sale of CO2, coupled with substantial financial support from government, have enabled the development of these two projects [Kemper and Boundary Dam] and will provide a basis to develop best practices, reduce cost, and identify—and avoid—potential problems so future plants can be built better, faster, and at less cost,” Page noted on 10 October, the day the GCCSI’s 2013 status report was released at the organization’s annual international members meeting in Seoul, South Korea.3
“Several other coal-based power CCS projects in the U.S. and Europe are moving toward a final investment decision in the remainder of 2013 or early 2014, and a large number of others are moving through the planning stages, in those regions and elsewhere,” Page told Cornerstone.
However, the report also cautions that:
- What GCCSI calls large-scale integrated projects (LSIPs) have been reduced globally from 75 to 65 since the 2012 report, with five canceled, one downsized, and seven put on hiatus.
- Despite the aforementioned progress with CCS projects, “momentum is too slow to support the widespread commercial deployment needed to underpin climate change risk mitigation scenarios. A very substantial increase in new projects entering construction is required.”
- Although a robust international dialogue continues to advocate for CCS, such discussions “have not been translated into policy settings that have delivered a sustainable pipeline of CCS projects in individual countries.”
“Technology-neutral policies, government funding, incentives, and continued robust research to reduce costs are needed to attract investment for additional large-scale CCS projects and enable sustainable deployment of the technology,” Page urged. “In North America, EOR is a key enabler for CCS as it enables demonstration of the technology and builds public and marketplace confidence in its viability and safety. CCUS is also a driver for continued R&D in capture, where costs remain high, but progress is being made with promising new lower-cost technologies.”
CCS In Action
While some projects have stalled or been canceled, several are offering insights into the potential of CCS.
“Pilot test facilities are running at the U.S. Department of Energy and Southern Company’s National Carbon Capture Center and the Plant Barry test facility in the U.S.,” Page said.
The Plant Barry project, in Mobile, Alabama, “diverts a flue-gas stream, equivalent to about 25 MW, from the power station and removes the CO2 using post-combustion solvent technology,” he explained. “The demonstration project aims to capture 150,000–200,000 tonnes of CO2 a year and geologically store it in a nearby reservoir.”
The capture plant has been operational since June 2011, becoming an integrated CCS project in August 2012, he noted.
Meanwhile, in the Netherlands, “pre-combustion from coal-fired power generation is being demonstrated at the Willem Alexander Integrated Gasification Combined Cycle (IGCC) plant. This is based on a 20-MW slipstream from the IGCC plant, which captures about 90% of the CO2 in that slipstream.”
In Australia, “the Callide Oxyfuel project is demonstrating oxy-fuel combustion technology from a coal-fired power plant. Operating since mid-2012, this project involved retrofitting a 30-MW decommissioned power plant, and the results to date show it is working well. The initial stage of the project is capturing 15,000–20,000 tonnes of CO2 a year, which is only a small percentage of the CO2 produced. Subsequent stages may result in an integrated project, whereby this CO2 will be geologically stored.”
Now, the challenge “is to scale up from capture demonstration projects that represent 20 to 30 MW to commercial-scale power stations of around 500 MW. Typically, industry will do this via a system of larger and larger projects that take into consideration the lessons learned from each demonstration project.”
CCS, Coal, And Other Fossil Fuels
While conceding putting CCS into practice presents substantial obstacles for industry, Page also emphasized the necessity of making progress.
“Currently, CCS technology to mitigate emissions is expensive and energy intensive, especially for power plants, whether coal- or natural gas-based,” he said. “The Institute’s broad membership includes representatives from the coal industry, whom we consult to set priorities, gain insight into challenges and issues, and inform our strategy to move CCS forward.”
A pragmatic vision of global energy needs fuels the efforts of Page and GCCSI.
“Due to its geographic diversity, abundance, and relatively low cost, coal provides energy access and security for many countries. The world will continue to rely on coal and other fossil fuels for some time, and that reliance will grow, especially in developing economies. The challenge has been to find cost-effective environmentally sustainable solutions, especially from a climate perspective, to its use.”
CCS “offers the opportunity to address the carbon emissions from coal, and other fossil fuel use, in industrial applications. CCS is currently the only way to burn fossil fuels without adding significantly more CO2 to the atmosphere. Its purpose, therefore, is to reduce the carbon emissions footprint of all fossil fuel-based power facilities, not just coal, as well as other industrial manufacturing sectors that are energy intensive or generate CO2 emissions as part of the production process.”
But CCS isn’t the only solution.
“Mitigating the increasing global levels of greenhouse gases released into the atmosphere requires a range of clean-energy solutions,” Page stressed. “These include energy-efficiency and demand-management measures, renewables, and a suite of other low-carbon technologies, of which CCS is a vital component. More than a billion people around the world do not currently have access to basic electricity. To address this need, coal will continue to be used as a primary source of energy, so it is very important that CCS technology is applied to coal-fired plants as well as gas and other industrial facilities.”
Making the Case For CCS
GCCSI “advocates for CCS as a vital part of a portfolio of low- or zero-carbon technologies required to mitigate climate change and provide energy security,” Page said. “This is because using CCS is currently the only way that fossil fuels can be burned without adding significantly more CO2 to the atmosphere.
“Our approach involves providing strong, independent, and influential representation for our membership, for example in international forums, [and] using our unique convening power to bring together governments, companies, and decision makers.”
GCCSI has focused on becoming “the ‘go-to’ organization for the most comprehensive and authoritative global knowledge, data, and in-depth analysis of information about CCS,” Page emphasized. “We also have a broad-based and interconnected network of world-class experts in all aspects of the technology. Regionally and globally, we focus on keeping CCS at the forefront of the climate-solutions path, strongly advocating for its inclusion in the portfolio of clean, low-carbon energy technologies. Further, we have established an effective CCS capacity-development program that is being implemented in several developing countries. This is important because projections show that, as they grow, developing economies will become a new source of increased carbon emissions.”
On the subject of methane emissions, Page is succinct: “CCS will be needed irrespective of other greenhouse gas emissions, including methane. The issue of added methane emissions needs to be addressed in addition to, not in place of, CCS.”
Understanding the CCS landscape in different countries and regions is vital, he said. To that end, GCCSI “recently reorganized to focus better on three primary regions: the Americas; Europe, Middle East, and Africa; and Asia-Pacific. In each region, we need to work within different policy and regulatory frameworks, at different stages of development, energy resources availability, and degrees of CCS readiness. This is also true within sub-regions, as each of the three regions encompasses both developed and emerging economies.”
In its annual reports, GCCSI points up areas needing attention in furthering CCS, particularly in making arguments that CCS is good business.
The current report “devotes a chapter to the critical issue of the business case for CCS projects and points to some lessons learned from large-scale projects so far,” Page explained. “Business cases for CCS projects may pursue different objectives, from technology demonstration to commercialization opportunities, and protecting portfolio value. However, all share similar challenges regarding the management of additional costs, increased financial risks, and complex financing plans.”
In its role as an advocate for the technology, GCCSI aims to provide a roadmap for success, Page said.
“Major factors contributing to a project’s financial and commercial deliverability include the diversification of products and revenues through an innovative approach to technology integration; strategic alliances and contracting decisions that widen financing prospects, notably by granting access to export credit agency funding; and access to targeted support provided as part of a consistent, results-oriented government strategy.
“We point to Summit Power’s Texas Clean Energy Project as an example. [It] combines industrial processes to diversify the project’s revenue sources while maximizing value generation. The polygeneration aspect of TCEP results in the expected ability of the project to cover all its costs, including debt service, while achieving potential net rates of return high enough to attract equity investors.”
Also providing a roadmap for expanding the use of CCS is the International Energy Agency (IEA), which released its own report this year on the extent of the technology’s reach.
“The IEA notes that the urgency of CCS deployment is only increasing; that this decade is critical for moving deployment of CCS beyond the demonstration phase; and that urgent action is required from industry and governments,” Page said. “We agree with all these points. The acceleration of CCS will require a renewed commitment from governments, including funding and incentives for new projects, sustainable policies for investment certainty, and robust R&D to allow next-generation technologies to be deployed commercially post-2020.”
- The Global Status of CCS: 2013. Available atwww.globalccsinstitute.com/publications/global-status-ccs-2013, (accessed 16 October 2013).
- Brad Page Chief Executive Officer. Available atwww.globalccsinstitute.com/publications/global-ccs-institute-annual-review-2012/online/48791, (accessed 20 October 2013).
- Global Carbon Capture and Storage Institute, Proven Climate Change Mitigation Technology Needs Global Support, 10 October 2013, Available atwww.globalccsinstitute.com/institute/media-centre/media-releases/proven-climate-change-mitigation-technology-needs-global
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The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.