Toby Lockwood brings us up to date on the advisory forum for the European Carbon Capture and Storage (CCS) Demonstration Project Network on 25 October in Rotterdam
Last week I attended the 5th and final advisory forum for the European CCS Demonstration Project Network in Rotterdam, against the backdrop of an interesting month for CCS policy in Europe. This group was set up in 2009 as an obligatory platform for the six large CCS projects funded by the European Energy Programme for Recovery to share their technical knowledge and experiences. With the cancellation of Rotterdam’s own ‘ROAD’ project this year, all of these original six have now failed to get off the ground, mostly due to member states being unwilling to contribute financial backing to their own projects. Despite this disheartening state of affairs, the EU has made funding available for a new network for CCS projects to be launched next year, and much of the discussion at the meeting focussed on how this network might best serve the CCS cause. However, this was all strongly influenced by a scene-setting examination of the recent failure of the ROAD project from Uniper’s Andy Read, which provided much insight into the challenges facing CCS in Europe.
Maasvlakte Power Station in Rotterdam, Netherlands Led by utilities Uniper and Engie, the plan to capture a portion of the CO2 from the new Maasvlakte coal power plant in Rotterdam’s port area has had a long and turbulent history, owing to uncertain political backing for CCS and coal power in the Netherlands. A national election in March made it likely that strongly anti-coal parties would participate in government, and this was confirmed earlier this month - shortly followed by the announcement of an anticipated coal phase out. Unlike the UK phase out of coal power, which requires the closure of several old and inefficient plants by 2025, the Netherlands 2030 target would shut down four high-efficiency, ‘CO2 capture-ready’ units, which were only completed in the last couple of years. This is a dramatic policy U-turn which has debatable value for cost-effective decarbonisation in the Netherlands. On the other hand, the Dutch government has also strongly committed to CCS in the last couple of weeks, announcing a target of 20 Mt to be stored per year by 2030 – all of it from non-power industry, save for 2 Mt from waste-to-power. Several experts at the meeting expressed doubts that such an ambitious target could be met whilst simultaneously ruling out the largest and easiest sources of CO2 from fossil power plant.
The problems faced by ROAD and the other European projects run deeper than simple lack of government backing. The collapse of the EU carbon price following the global financial crash cut off the intended revenue stream for the projects and has not recovered since. On top of this, it was pointed out that there is limited potential for a CO2 price at any level to stimulate CCS in the power industry, which generates its revenue from electricity sales. As long as carbon prices are reflected as increases in the power from unabated fossil power stations, they can represent a revenue opportunity for the CCS plant able to sell at high prices without the CO2 cost; as the sector decarbonises, this advantage is negated. Other major barriers to European CCS projects stem from the regulatory framework laid out by the EU CCS directive, which saddles developers with significant investment risks such as the costly and poorly defined task of proving a leak isn’t happening and the unknown liability of an actual future leak. Such risks could be better borne by government, and indeed are for CCS projects in the US and Canada. The CCS directive was recently under consultation, but it was thought best not to alter its terms while some projects remained active – today’s bleaker outlook may give cause for reconsideration.
The failings of political support and inadequate regulation loom large in any forum on CCS, and even technical networks such as this are obliged to look at how they can face these challenges and potentially influence the public and political narrative on CCS. In this task, anti-CCS NGOs such as Greenpeace have made for formidable foes, but the recent positive noises on CCS from both the Netherlands and UK governments suggest the cause is not lost in Europe – even as perennial CCS-champion Norway appears to be moving in the other direction. Unfortunately for the fossil power sector, winning this argument with environmental groups seems to require an excessive focus on industrial emissions. With its unique potential to provide negative CO2 emissions, biomass-enhanced CCS also remains in favour, but has severely limited prospects once the route of firing wood in coal plants is cut off. To help secure the all-important, long-term political backing, Andy Read recommended projects start small but scalable, yet without necessarily requiring follow-on projects to be worthwhile. In other words, they must provide clear value while minimising the appearance of intimidating costs. This is clearly a difficult balancing act to master, and one which all the European projects have failed at in some way.
The future European CCS network is unlikely to include many major demonstration projects in the near term, so will likely expand to include smaller-scale research and pilot projects. The recent political focus on developing CCS ‘hubs’ for clusters of industrial emitters, such as those in Rotterdam or the Teesside area of the UK, means that these could also be included in some capacity. Cultivating membership may be more challenging without the funding-linked obligation to share information of the original six projects, yet participants were vocal in their support for the network to date, which has clearly provided an invaluable, confidential forum for sharing technical and regulatory experience. Hopefully the new initiative will see more success in actually bringing its projects to fruition.