According to the International Energy Agency, carbon capture and storage (CCS) could deliver one-fifth of the emissions reductions needed by 2050. But this would require about 3,000 projects to be up and running by this date. CCS is yet to be deployed on a commercial scale and many feel this presents an opportunity for the UK to be a leading player. To assist, the government has made £1 billion available towards capital expenditure on CCS projects.
With a shortfall predicted in generation in the next three years, the pressure is on to deliver new capacity sooner rather than later. Some of this will be via combined cycle gas turbine (CCGT) plant (the government’s Gas Strategy was expected out on 5 December after Utility Week went to press, so specific details are not available at the time of writing). In any scenario, efficient CCGT will have a major part to play, alongside a new nuclear fleet, in reducing emissions while giving a greater energy generation ratio to incurred cost and space. For instance, to achieve the same installed capacity as a CCGT plant, approximately 7,200 acres of solar farms or 600 wind turbines would be required.
However, with opportunities for new gas plant come challenges. The most immediate is the availability of locations for plants if CCS is to be incorporated. Larger sites than would otherwise be necessary are required – current guidance recommends doubling the size required and therefore potentially doubling the cost of the land needed.
Land in the UK is a more limited resource than coal, gas and oil will ever be. Therefore, each potential site must balance a range of essential commercial factors, as well as standing half a chance of obtaining a development consent order. There are not many suitable locations in the first place, with both a favourable planning context and grid potential – for both gas and electricity – and within a sensible transmission network use of system zone. Apply a further requirement for carbon capture readiness and potential locations become exceptionally limited.
For instance, there are transport and storage issues to take into account for CCS to work. Presently, the industry is encouraged to consider pipeline
solutions to transport and store carbon in depleted oil and gas fields, which are largely concentrated in the North Sea, the Hebrides and Morecambe Bay. Therefore, by way of example, a site that meets all the
criteria in terms of size, planning and grid connections but is based in south Wales clearly faces significant challenges about how to transport carbon to the north. While there is the possibility of transportation via ship, the emissions impact and logistics challenge (once operational) of this is higher than pipeline transport for large quantities of carbon dioxide or shorter distances. A balance would need to be achieved to ensure the problem of emissions was not just being moved further down the chain.
Barriers to development are far more onerous than they need to be. The fact that allowances have
already been made to manage carbon, such as emissions levels being set for new plants that are then grandfathered until 2045, calls into question whether ensuring the next generation of sites are carbon capture ready is hindering the location and therefore development of new plants. We are going to struggle to have sufficient new power generation capacity in place by 2020 to keep the lights on. Plants are effectively not going to have to meet CCS standards for the next 30 years, so insisting new gas plants are carbon capture ready is limiting our options and jeopardising supply security.
The market should be left to decide whether the risk of carbon price inflation will drive a need for CCS beyond the grandfathered emissions levels. Another option would be for CCS requirements to be applied to new gas plants after 2030. Developers and operators are effectively being required to spend large amounts of money to hold land under option, purchase or lease to be able to retrofit CCS technologies when no-one can guarantee how this will look and operate at the point of delivery – which could further affect the type of site required in any event.
The timescales for delivering the next generation of power plants is tight. While finding suitable land over the next 30 years is achievable, compressing a percentage of this into the next two or three is much more challenging. For the energy sector, being asked to have land in place and a feasible strategy for transporting captured carbon before the capture technology itself is commercially available, and at the same time offering an effective 30 years reprieve on integrating the technology, seems unnecessary. It is a big ask that could prove extremely expensive at a time when government is trying to minimise impact on consumer costs.
From a planning perspective, one of many key tests for the Energy Bill, out last Thursday , will be whether the legislation that flows from it produces a clearer, more feasible, roadmap that enables emissions to be reduced but does not further constrain the market’s ability to address supply pressures in the
short term.
Miles Thomas is head of operations at Savills Energy
This article first appeared in Utility Week’s print edition of 7th December 2012.
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