A shrinking window of opportunity for CCS in Europe?

This month has seen the release of a report produced by the German Wuppertal Institute for Climate, Environment and Energy, which focuses on the potential for CCS in Europe. Here IFandP provides a summary of the most salient points and discusses the questions that it raises.

The Wuppertal Institute for Climate, Environment and Energy has produced an updated final report for the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Entitled “Comparisons of Renewable Energy Technologies with Carbon Dioxide Capture and Storage (CCS),” it is one of the most in depth documents to enter the public domain on this controversial subject. While many are of the opinion that there is no reason why CCS cannot be employed alongside emerging renewable technologies, the fact remains that both are in competition for scare resources and funding. As a result, supporting one of the two impedes the development and deployment of the other.

Perhaps the single most significant conclusion of the report are its estimate of the potential quantity of CO₂ that can be sequestered in Europe. The authors put this at 49bnt, equivalent to just 40 years of the continent’s current annual CO₂ emissions from large power sources. When one considers the huge investments required in the form of a substantial pipeline network and the other infrastructure required to transport the greenhouse gas to its final location (typically under the North Sea), this raises considerable questions regarding the attractiveness of CCS as a low carbon option. The report envisages a scenario in which 24GW of CCS is installed in Europe, under which an average of 46Mt of CO₂ could be saved annually up to 2050, but this would require the construction of pipelines capable of delivering 64Mta of captured CO₂ a year to reservoirs.

The report also makes the case that in actual fact, CCS is the most high carbon of “low carbon technologies”, once its full lifecycle is considered, particularly as a result of the increase in coal consumption that would be required to meet current energy demand due to the issue of parasitic load. This also means that it has a much higher overall environmental impact than renewable technologies, in the form of air pollution from both coal combustion and that emitted by shipping the coal to the plant and the damage done by mining operations. Once all upstream processes are taken into consideration, the authors of the report state that CCS has the potential of reducing emissions from power plants commencing operations in 2020 by 68-87% (rising to 95% in exceptional cases).

In comparison, the authors estimate that in 2025, offshore wind, solar thermal and photovoltaics will generate only 5-8%, 11-18% and 14-24% of emissions from CCS plants. They also make the point that “If the dynamics of the expansion of renewables in the electricity sector remain high, it is possible that individual renewable energy technologies (offshore and onshore wind power, solar thermal power plants) may be able to compete with CCS power plants as early as in 2020.”

It goes on to say that: “If fossil fuel prices increase considerably and the CO₂ allowance costs remain low, the generating costs of CCS-based natural gas and hard coal fired power plants will be higher from 2020 than those of renewable energies. Lignite-fired CCS power plants will follow from 2025 (offshore wind / solar thermal energy) or 2030 (mix of renewable energies). Even in the case of very low increases in energy prices (but higher CO₂ penalties), the additional costs incurred by CCS would be so high that renewable energies would remain competitive at the same time as in the high price scenario. For lignite in particular, the high CO₂ penalty would have a negative impact that could not be entirely offset by CO₂ capture.”

This conclusion is shared by analysts at Landesbank Baden-Württemberg, who in a 2009 report on the PV market said that CCS “is not practicable on commercial and economic ground, not even in Central Europe. Solar electricity generation is not more expensive than CCS (and much cheaper from 2020.)… Which technology should be subsidised in future from taxpayers’ money: ‘cleaning’ conventional, fossil fuel-fired power plants, which have an expiration data, by CCS or supplying industrial society with solar electricity, which is arguably more sustainable.”

The authors also make the point that “The other major conclusion is that the expected timescale for the development and deployment of CCS meshes uncomfortably with the current development of renewable technologies and the pace at which innovation and economies of scale are working to reduce costs.”

The report does not envisage CCS being available on a large scale until the 2025-2030 period and argues that the adoption of combined heat and power, coupled with the lifetime extension of the existing German nuclear reactor fleet, could further work to reduce the overall appeal of CCS. However, it does make the case that it could play an important outside of Europe, particularly in China and India, given their current reliance on coal and may also play an important role in aiding in the decarbonisation of other sectors, such as the cement industry, which cannot eliminate CO₂ emissions completely due to the nature of the processes involved.

However, the report goes on to say that “From the perspectives of the power industry and climate policy, the implications of a later implementation of CCS should be reviewed in the context of the call by climate scientists that global CO₂ emissions must peak sometime between 2010 and 2020 to trigger a reduction towards a 450ppm path in time (IPCC 2007). For this reason, the agenda for global climate protection must be set in the next ten years. Essentially, this can only succeed using technologies that are established and basically applicable now.”

Another important conclusion is that while Enhanced oil Recovery (EOR) may help to speed up the development and deployment of CCS, it “is clear that it cannot contribute to climate protection” as for each tonne of CO₂, sequestered, the extraction of oil and its combustion releases four tonnes into the atmosphere.

The full report can be downloaded here