Carbon capture in Europe can make money by 2030
LEIGH PHILLIPS
23.09.2008 @ 17:57 CET
A controversial and experimental technology that hopes to scrub coal-fired power production of its carbon emissions and store them underground could indeed be an affordable tool in the European Union's toolbox of alternative energy systems that aim to fix our climate problems, according to a new report.
Carbon captured from coal plants and stored underground will become economically viable by 2030, according to a new report (Photo: Alligator film /BUG / StatoilHydro)
The technology - "carbon capture and storage" or CCS - is the main mechanism for improving the environmental impact of coal plants within a panoply of technologies that are often promoted as 'clean coal' by such politicians as George Bush and the coal industry.
The technology - which is actually three different technologies that are still very much under development, the most effective of which is yet to be established - involves 'capturing' the carbon from the burning of coal and 'storing' this CO2 somewhere - perhaps in an exhausted oil field, deep underground or underwater - forever - so that the carbon does not enter the atmosphere.
Apart from environmental considerations, the main obstacle to its uptake is that CCS costs two or three times what conventional coal plants do, and so thus far, power companies have balked at developing the technology.
However, according to a new report from the business management consultancy McKinsey, the technology should be "economically viable" for the private sector by 2030, and so until then, it is essential that the public purse gets the ball rolling by subsidising 10 to 12 demonstration plants to be up and running by 2015.
Until 2030, the technology would add an extra €60 to €90 per tonne of carbon released to the cost of producing coal-powered energy, making the whole idea far too expensive.
But as the cost of buying carbon pollution permits rises under the EU's emissions trading schemes, by 2030, CCS would cost only an extra €30 to €40 per tonne of CO2, a much more affordable figure, according to a range of calculations from Deutsche Bank, UBS and other institutions.
This figure could drop still further if the technology was adopted by coal plants everywhere around the world, say the McKinsey analysts.
Demonstration projects need funding soon
However, if Europe does not get moving with funding such demonstration projects fairly soon, and if the first commercial projects do not start until well after the demonstration phase, "CCS could struggle to reach large scale in 2030", says the report - and by then, it will be too late. Europe needs to make massive reductions in its carbon emissions now.
Energy commissioner Andris Piebalgs hailed the report for helping "to push the technology forward".
His comments are unsurprising, as the European Commission strongly backs the development of CCS, and as part of its package on climate and energy unveiled in January, it proposed a regulatory framework that would enable monies from the emissions trading scheme (ETS) to support CCS development.
With CCS currently under discussion in the European Parliament, Chris Davies, the British MEP responsible for steering the dossier through the parliament, has suggested that €10 billion from the ETS be set aside to finance demonstration projects.
Last March, European leaders also committed themselves to having 10 to 12 demonstration plants online by 2015.
However, despite this pledge, divisions on the technology within the council are substantial.
The UK and the Netherlands are strong backers, as carbon storage can also be used as a mechanism for pumping out extra oil from a dying oil field, something which the two countries believe can extend the life of their North Sea oil industries.
Before the recent change of government, Italy had strong oppositions, but the new Berlusconi administration has rallied behind the idea.
Germany meanwhile is wavering, while Greece is the most outspoken opponent, echoing the environmental criticisms of such groups as Greenpeace and Friends of the Earth and is afraid that because the country lies in an earthquake zone, it will not be able to deploy the technology anywhere in its territory and will be frozen out of any benefits from emissions reductions, meaning they will have to be made elsewhere in its economy.
No such thing as clean coal
Most environmental groups are steadfastly opposed, saying there is no such thing as clean coal and worry that the manoeuvre will allow the coal industry to stay in business while genuine renewable sources of energy such as wind, geothermal and solar power are sidelined.
A number of diplomats also ask why a particular technology should be benefiting from subsidies, and not renewables.
Green groups say that in any case 2030 is not soon enough to deliver the emissions savings Europe needs to make.
"The report only proves that CCS cannot be delivered within the right time frame. Climate change scientists such as those from the Intergovernmental Panel on Climate Change say emissions must peak before 2015," said a campaigner with Greenpeace, Joris Den Blanken.
"It's just too late. Better to start right away with investing in energy efficiency and technologies that are already proven such as renewables."
They are also concerned that CCS wastes energy, with the technology itself requiring 10 to 40 percent of the energy produced by a power station.
Environmentalists also fear that storing carbon underground is not safe or permanent, and argue that the technology is incredibly water-intensive, adding extra pressure on the already limited water resources of southern EU member states.
Ecologists are not however of one mind on the subject.
Norwegian environmental group Bellona argues that whatever the demerits of CCS, governments must be realistic and recognise that if Europe does not take the lead in developing the technology, other jurisdictions, notably China, are moving ahead with building dozens of new coal plants that without CCS technology strapped on will wipe out all the other efforts of Western governments and industry at reducing carbon emissions.
The Worldwide Fund for Nature, or WWF, also feels that CCS is a necessary evil.
Mr Davies' proposal is to be voted on by the parliament's environment committee on 7 October.
To read an interview with the environment attache for Greece's mission to the EU on his country's opposition to the technology, please read this companion article.
