CCS: A fiction that has outlived its usefulness

With only a handful of pilot projects in operation around the world, Carbon Capture and Storage (CCS) has not played a significant role in reducing carbon dioxide emissions. CCS has, however, been valuable as a fiction for all those who want, for whatever reason, to avoid dealing explicitly with the fact that stabilizing the global climate will require ending the use of fossil fuels, and particularly coal. For example, rather than prohibiting new coal-fired power stations, the US EPA has proposed that only power stations equipped with CCS technology should be permitted. Since new coal stations are mostly uneconomic even without CCS, this amounts to a ban, but can be justified simply as requiring best practice.

It now appears that this fiction has outlived its usefulness. Recent reports suggest that the EPA will drop the CCS requirement in favour of the weaker requirement that all new coal-fired stations should use supercritical combustion. There are two main reasons for this

(a) The requirement might not stand up to legal challenge on the basis that CCS is not a feasible technology
(b) No new coal plants are likely to be built anyway

Meanwhile, the EU is struggling over proposals to stop subsidies for coal-fired power. Again, the compromise was to subsidise only projects with CCS. But the coal lobby is now arguing that

proposed requirements on carbon capture and storage (CCS) to neutralise emissions have to be realistic as the technology is still in its infancy.

In this context, “realistic” means supercritical and therefore theoretically ready for CCS, as opposed to actually using the technology.

Combine this with a string of cuts in funding for CCS projects, and the conclusion is inescapable. CCS is an ex-parrot.

41 thoughts on “CCS: A fiction that has outlived its usefulness

  1. @Donald Oats

    Don’t forget the work being done in China. In many ways China is in the forefront, albeit they do still use a LOT of coal because they are still growing fast AND they are already the biggest economy in the world. Of course, the USA, all its politicians and most of its people are still in complete denial about the fact that China’s economy has passed them like they are standing still. And those market liberals say dirigisme doesn’t work. LOL.

    In the rest of your post, you are completely right. The scientists know what is going on. The politicians and corporate capitalist Powers That Be have no idea and/or just don’t care which are both functionally the same in terms of generating bad outcomes.

  2. India’s lowest Power Purchase Agreement (PPA) for utility scale solar is about 8 US cents a kilowatt-hour. New coal power in India typically receives PPAs from 7 to 9 US cents a kilowatt-hour. And generally wind power is much cheaper than either. Given that once a PPA is over a solar farm will be able to sell electricity with next no operating cost per kilowatt-hour, while a coal power station will have to pay for coal, increasing maintenance costs for an aging plant, and almost beyond doubt a carbon price, even when PPAs are equal solar is clearly a better choice than coal and currently wind is generally a better choice than either. It is these sorts of conditions that are required for countries such as India to stop building coal power plants and for the world as a whole to stop digging the hole it is in any deeper. And under these conditions where it is no longer economical to build coal power plants, coal power with Carbon Capture and Storage is deader than a dodo at the annual convention of dodo hating maniacs.

  3. I’ll mention that in Australia the lowest PPA for wind so are is 8.15 cents per kilowatt-hour. That’s 5.95 US cents at current exchange rates. And rooftop solar, thanks to our high retail electricity prices, beats any utility scale generation. However, electricity retailers are seeking to “fix” this by damaging our nation and the world by doing things such as raising daily supply. Here’s an example of daily a supply charges being increased to $11.49 a day or $4,197 dollars a year and the marginal price of electricity being lowered down to 3.29 cents a kilowatt-hour: http://reneweconomy.com.au/2015/rooftop-solar-suffers-another-blow-as-utilities-switch-tariffs-47080

  4. @Ronald Brak
    Interesting, if not unexpected. I wonder if the company can be sued, using the previous tariffs as proof that the current tariffs aren’t cost reflective. A class action against an unconscionable change in tariff arrangements, perhaps?

    In the longer run, such crazy tariff management drives customers into thinking how can they escape the arrangement entirely, and as the author observes, battery storage gets the benefit of that consideration.

    The gasping breaths of a business model in serious transition.

  5. CCS as a technology to reduce CO2 emissions by 2020 or 2030 to specified limitis world-wide seems to be indeed a narrative in the sense of a fiction. But CCS, as a technology (know-how), as distinct from the least cost production method, isn’t a fiction. See Schwarze Pumpe and the Canadian CCS power plant in operation since 2014 (reference: the guardian, 1/10/14). [1]

    Maybe it is a little too early to write off CCS as a waste of research money. Countries such as Poland are also committed to reducing ghg emissions. But it isn’t easy. Poland is not blessed with the sunshine of Spain, Italy, and Australia nor blessed with a geography that lends itself to lots of hydroelectricity generation but there are rich coal deposits. Coal mines provide jobs for large numbers of workers (underground coal mines). There is strong union objection to coal mine closures (state owned). demanded by the government due to local coal having become too expensive relative to imported coal. I don’t know where the imported coal is coming from. Nuclear is considered.. Lets see whether CCS will be used too.

    [1] Vattenfall has indeed divested from the R&D into CCS. It has divested many other operations as well. From what I can gather from their web-site, Germany’s “Energiewende”, entailing decommissioning of its nuclear power plants well ahead of earlier plans, has affected Vattenfall’s balance sheet. This company had followed what is called ‘an aggressive acquisition’ strategy before the GFC.

  6. @Ronald Brak

    If old-style fossil fuel utility power generators pursue that ludicrous nonsense then people will disconnect from the grid in droves. It will be far more economical for domestic users to use solar plus storage. It’s almost hard to believe the corporate utilities are that stupid but strangely (or not so strangely) established old-paradigm business is always stupid compared to innovating, entrepreneurial business.

    Old businesses are managed by business-as-usual people doing what they did 20 years ago (when it actually might have been innovative). They react to radically new business conditions by panicking and making really stupid decisions. They are too set in their ways to adapt sensibly and they lack the necessary concepts and imagination as well. By all means let them panic and shoot themselves in the foot. It will aid progress.

  7. @Ernestine Gross

    I believe that the cost of power from a CCS coal electricity generator with totally safe storage strata for the CO2 would give us the best first indication for a true carbon emissions price. In theory, a dirty plant emitting CO2 should pay a price somewhat higher, over the remaining life cycle of the plant, than the cost of a full CCS retrofit. In other words, the CO2 emissions price would need to be high enough to “convince” relatively new non-CCS plants to retrofit and old non-CCS plants to simply shut down early based on a financial/business analysis.

    But the next step of analysis would involved comparing electricity cost from a brand new CCS plant or a new-ish plant CCS-retrofitted with the cost of renewable energy (say solar and wind).

    I believe that sometimes markets can work for some goods and services if the market is undistorted by subsidies, rent seeking, special pleading, monopoly tendencies, un-costed negative externalities and other problem factors.

  8. @Ronald Brak
    At India’s cost of capital – a WACC of 8% would be conservative – the present value of the income flow after 25 years makes little difference. Run a spreadsheet with a 200-year stream of equal benefits compared to one that stops dead at 25 years. The NPV goes up by only 17%. (NPV of $100 a year for 25 years at 8%: $1,067; for 200 years: $1,250.). What makes a real difference to the cost comparison and NPVs is including the health costs imposed by fossil fuels.

  9. James, it is certainly true that there is not a huge difference between investing in a coal power station that is scrapped after 20 years and investing in one that is scrapped after 40 or 60 years. However, there is a difference and as that difference involves money it matters. But about human lives, we care not one jot. Does saving a human life get me any closer to owning another maserati? No. The day legislation changes to force me to price in trivial externalities such as killing people or destroying the climate, well that’s the day I pay off a political party to remove the offending legislation. However, I have been informed that trick may not work again, so I am taking steps to strip mine fossil fuel generators of their assets and ensure that any major successful lawsuits or unfavorable legislation results in them going bankraupt and dumping the clean up costs for the frequently asbestoes contaminated coal power stations on the public. And really it’s for their own good. If I don’t abuse the public then how will they ever learn to vote in politicans who oppose oligarchy?

  10. Whilst I can agree that you have a credible point about the economic feasibility of CCS (at least for the power sector) – particularly that like nuclear, a cogent argument exists, that costs will not follow a trajectory that will see any sort of possible (useful?) deployment in the next 20 to 30 years in the power sector. (Though the inside story for Boundary Dam is a halving of costs if the next project goes ahead…driven not by leaps in technology, but the challenges faced with doing something a second time are so much less…very interesting stories on a project that had almost no cost overrun, but still spent lots of money revisiting construction outcomes)

    And it’s true that the failure to rapidly scale up a developmental technology to commercial scale in the space of 10 to 20 years (from 2009) was a failure, and could reasonably have been expected to be a failure (at least in hindsight for some of us :-).

    However the language of myth plays poorly to the large science and technology research community in this space.

    It ignores the challenges in the industrial space – that accounts for around 25% of CO2 emissions – where renewables currently remain much more of a cost challenge than CCS.

    It overstates the role that CCS would have had in the continuing use of coal – iirc, most 2 degree scenarios result in something like ~86% of current coal reserves staying in the ground forever. CCS moves that too something like ~81% of current reserves staying in the ground forever (CCS only had a transitionary role for coal use, albeit around 40-60 years – and that’s 5% difference is still a very large amount of coal consumption).

    It doesn’t address the challenge that achieving a 2 degree target by the end of this century requires negative emissions (and is the reason so many environmental NGO’s considered the technology part of the solution). I don’t know how much the recent falls in PV prices change the emission path going forward and flow on impact on any requirement for negative emissions however.

    Nor that CCS R&D continues – but it really is back at the scale of R&D funding (still large in the US), rather than RD & D funding given failed policy.

    Finally, to the extent that it was a figleaf in the US (not sure that applies anywhere else) for delaying climate change action, it’s not credible that the absence of the technology option would have meant any earlier action climate change in that country is it?

    cheers

  11. @Chris Short

    The proof is in the empirical pudding. Solar power and wind power are going ahead gangbusters on all fronts. CCS is going and has gone exactly nowhere in any substantive sense. If CCS was all of technically feasible, energetically efficient and financially viable it would have proven itself by now. The fact that it hasn’t proves that it ain’t.

  12. Yes Schwarze Pumpe stopped in 2014. The ‘capture’ part in CCS covered many technologies and for coal, there were three. Schwarze Pumpe used the “oxyfuel” process of combusting the coal in a highly enriched oxygen environment – increasing both the efficiency of combustion and a producing a CO2 stream so drastically reducing ‘capture’ costs. Like the other folly for coal combustion, IGCC, these were technologies that added even more to the cost in total and were even more expensive (when properly valued – economists weren’t always welcomed by the engineers) than a modern ultracritical coal plant with the carbon capture part integrated from design.

  13. Geoff Edwards :
    In 2010/11 while I was employed in the Qld Dept of Mines and Energy, I was briefly responsible for Qld’s implementation of CCS subsidies. This was always a political stunt. On basic thermodynamics it cannot work except for a very limited number of basins so cannot be scaled up, and even then imposes an energy and carbon penalty on top of the existing extraction. Evidence that it is a diversion is that the big mining companies were reluctant to fund the research with their own money.

    I remember the first day I ever heard of carbon sequestration, as it was referred to at the time. My first sentence was as Geoff notes – that it was not thermodynamically feasible, that it was like trying to put toothpaste back into the tube. Anyone with the understanding to do a good approximate count of the physical numbers would have reached (and most did…) the same conclusion.

    As an excuse to keep burning coal CCS has contributed significantly to at least a decade of delay on action.

    And in hindsiight I would use a different analogy – it’s more like trying to put silly string or shaving cream back in the can…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s