[Premium] UK CCS Should not Depend on High Carbon Price: CCSA
Carbon capture and storage is critical as the lowest cost route of meeting the UK climate change targets, the CEO of industry group Carbon Capture and Storage (CCS) Association Luke Warren told delegates at a briefing hosted by Oil & Gas UK in London November 15. It will also extend the life of offshore petroleum infrastructure, help to diversify the supply chain, and make use of a available skills.
CCS is also necessary if the UK offshore oil and gas industry is to continue to have its social licence extended, said Graham Bennett of consultancy DNV GL, predicting an earlier end to production if the industry cannot be seen to be working against climate change.
Nevertheless years after the idea was first mooted, no projects are ready yet for front-end engineering and design.
Warren said: "For the UK, CCS is the high-value option," but apart from a government-funded competition to find a scheme worth investing in which was cancelled a few years ago, and the most recent announcement by the Oil & Gas Climate Initiative, nothing has got off the drawing board, so "even if the government found £1bn ($1.32bn, the amount available in the competition) it could not spend it today."
That said, the government is now "back at the table and seeking to re-engage," he said. There are five plans under consideration that could take a few tens of millions of pounds to develop into something that could then go to front-end engineering and design, in a couple of years, he said. But there has to be political commitment to it, especially as "under no circumstances do I see a carbon price high enough to drive CCS prior to the 2030s," he said, adding that the long-term price of carbon needed to be high.
He said he was encouraged by the government's adoption of the Clean Growth Strategy, but generally the UK is behind where it hoped to be by now, and it cannot afford any more delays.
Aside from the OGCI plan for capturing and storing the CO2 from an unidentified gas-fired power plant, the plans are for: a decarbonising hydrogen for industry in the Liverpool and Manchester regions, overseen by gas distribution grid operator Cadent, which could use storage in the UK East Irish Sea; equipping an industrial site in Teesside with CCS, planned by the Teesside Collective; decarbonising the Ineos/PetroChina-owned Grangemouth oil refinery (see photo above, courtesy of Ineos) in a project known as Caledonian Clean; and H21, which involves decarbonising the Leeds heating network in Yorkshire.
Warren said on the sidelines of the briefing that the carbon price for Teesside worked out at £58/metric ton, far higher than the price of the European Union's Emissions Trading Scheme (ETS), although cheap compared with the cost of cavity wall insulation schemes. The plan is to scale back progressively the number of allowances tradable from 2020, which could tighten supply and so push carbon prices up.