The Urgent Need to Move From CCS Research to Commercial Deployment

By Andrew Minchener
IEA Clean Coal Centre

Climate change is a serious issue that requires a global response. However, that response will not be a “one size fits all global solution”. Despite strident calls from some activists for a switch to renewables, with an immediate rejection of fossil fuels, the reality is that each nation will need to decide how it might move toward a lower carbon economy while deciding how best to balance the strategic energy trilemma. Compared to OECD countries, developing and industrializing nations will have different priorities, with a focus on ensuring that their populations have access to electricity, which can be the most effective means to improve both their education and standard of living through industrialization. In such cases, the fuel of choice is coal, being readily available, relatively low cost, and a proven choice for grid-based power generation.

That said, recognition grows that lowering carbon emissions, especially from coal, is both achievable and a valid near-term contribution to global greenhouse gas emissions reduction. In recent years, various critical advances have occurred in coal-based power generation technology, which can now achieve cycle efficiencies of some 45% (net, LHV basis), consistent with a 20% reduction in CO2 emissions compared to those from conventional coal-fired plants. Equally importantly, in China and Japan especially, various developments are being tested that are designed to achieve cycle efficiencies of some 50% within the next decade.1,2

Ultimately, to achieve “near-zero” CO2 emissions from coal-fired plants, it will be necessary to introduce carbon capture and storage (CCS), which comprises various options to capture CO2, then pressurize and transport it to a geological location for injection and permanent storage. This can include a depleted oil field where the injected CO2 will result in an increase in oil extraction with the majority of the CO2 remaining underground. This option, known as carbon capture, utilization, and storage (CCUS) will provide a revenue stream to offset some of the CO2 capture costs.

The Stern Review in the UK concluded that the cost to decarbonize the global economy would be significantly higher if CCS is not included for coal-fired power plants.3 Equally importantly, subsequent analysis has shown that the use of fossil fuels, particularly coal, for industrial applications such as iron/steel, cement, and chemicals cannot be replaced by renewable energy. However, these processes can be decarbonized through the introduction of CCS, which needs to be seen as a core part of the global climate response.

PROGRESS TOWARD COMMERCIAL-SCALE DEMONSTRATION AND DEPLOYMENT

Research and development have delivered technology advances across capture, transport, and storage technologies. Such efforts will continue to be important to refine and improve CCS technologies, but the critical step must come through large-scale demonstration and deployment. In that regard, the limited number of operational plants and the relatively small scale of operation compared to commercial-scale units means that CCS is not yet having the impact required to significantly contribute to meeting global decarbonization targets (Table 1).

TABLE 1. List of operating and near-operational large-scale CCS projects4

Globally, 15 large-scale CCS projects are currently in operation, with a further five under construction and expected to start operations by 2017. These 20 projects represent a doubling since the start of this decade, while their total annual CO2 capture capacity will be close to 40 Mt once all are fully operational. Half of these are based on stripping CO2 through natural gas processing and, in all but two, using the CO2 for EOR. This approach is cost effective since removing CO2 from the natural gas, to ensure product quality specifications, will result in a revenue. In addition, there are six projects based on hydrogen, fertilizer, and synthetic natural gas production plants with CCS and EOR. More recently, this global portfolio includes a 115-MWe coal-fired power plant with CCS and EOR at Boundary Dam in Canada, and a 582-MWe unit with IGCC-based CO2 capture and EOR is just beginning operations at the Kemper County, Mississippi, facility. Shortly, these will be complemented with a 240-MWe unit at Petra Nova, Texas (Figure 1). Projects currently under construction will further diversify this portfolio, including the world’s first iron and steel CCS project in Abu Dhabi and a bioethanol plant in the U.S. This diversity indicates that CCS is a technology to limit carbon emissions from a wide range of power and industrial processes.

FIGURE 1. Three key coal power CCS demonstration projects (adapted from Carbon Brief5)

COP21 and the Need to Move Forward

The IEA produced a CCS roadmap suggesting the input required from CCS deployment as part of an initiative to limit the average global temperature rise to no more than 2°C (Figure 2).6

FIGURE 2. The IEA CCS roadmap consistent with limiting average global temperature rise to 2°C

This projection emphasized three goals that would need to be met, if the necessary CCS contribution toward carbon reduction through to 2050 is to be achieved:

  • Goal 1: By 2020, the capture of CO2 is successfully demonstrated in at least 30 projects across many sectors, including coal- and gas-fired power generation. This leads to over 50 MtCO2 stored each year
  • Goal 2: By 2030, CCS is routinely used to reduce emissions in power generation and industry, having been successfully demonstrated in industrial applications. This level of activity will lead to the annual storage of over 2000 Mt CO2.
  • Goal 3: By 2050, CCS is used routinely to reduce emissions from all applicable processes in power generation and industrial applications at sites around the world, with over 7000 Mt CO2 annually stored in the process

With hindsight, it is evident that the suggested timescale for large-scale deployment of the initial CCS techniques for use with coal-fired power generation and other industrial processes was overly optimistic, at least in making a significant start with CCS deployment. This is not because the techniques were technically unsuitable, but because there was insufficient attention given to establishing an enabling environment, taking into account the need for supporting policies, robust regulations, and an adequate financing model. The IEA projections suggested that there would need to be some 20 large-scale CCS projects in operation by 2020, capturing some 40 Mt of CO2 each year. In practice, while there is likely to be close to 20 projects, few will be coal based and the CO2 capture rate will be below 40 Mt/yr. More importantly, when the ramp-up of further projects is considered, the GCCSI database shows only a few additional projects close to operational status, which suggests a loss of momentum for several years.

Most of the projects that are not based on natural gas processing have included some level of capital grants from the host government. Although this is a reasonable expectation, given such demonstration projects are both strategic in nature and carry a level of risk, such funding sources can be politically fragile. To establish a large-scale commercial CCS plant will require a high capital investment because of the scale of operation. However, this issue should not prevent funding being obtained, provided an appropriate and stable incentive framework is in place. In many countries the lack of a coherent energy policy, wherein environmental issues are considered almost in isolation from security of energy supply and economic competitiveness, has discouraged funding and created reluctance for developers to take up opportunities because of uncertainties regarding long-term return on investment.

This is linked to an ill-conceived opposition to fossil fuels; many institutions are refusing to finance coal-fired power generation and other fossil fuel projects, which represent the most cost-effective means to reduce carbon emissions in the near-to-medium term. Not only does this make it more difficult for coal-based HELE (high-efficiency, low-emissions) technologies to be supported but it has the potential to impact on future CCS investment, as some institutions do not allow support for projects even with CCS.

In a “no CCS” scenario variant of the IEA Two Degree Scenario (2DS), assuming that the limitations of replacing coal or gas by expanding renewables use within a grid-based generation system can be overcome, without CCS, the transformation of the power sector will be US$3.5 trillion, or 138% more expensive.7

When the so-called ambition of achieving a decarbonization target consistent with an average global temperature rise of well below 2°C is considered, even more attention to CCS would be needed—and, at this stage in the technology development and deployment, it is hard to envisage how its input could possibly be ramped up.

The Possible Role of China to Drive CCS Forward

China has established significant capacity across the CCS chain through research and development, including the construction of nine pilot projects, and has benefited from extensive international cooperation. Consequently, it has reached an adequate level of readiness to take forward large-scale CCUS demonstration projects.

The National Development and Reform Commission (NDRC) of China and the Asian Development Bank (ADB) have worked closely together on several CCS/CCUS institutional capacity-building projects, which led to the creation of a coal-based CCUS development and deployment roadmap for China.8 This included the identification of a number of early opportunity demonstration projects based around large coal-to-chemicals plants in which CO2 capture is a low-cost (less than US$20/tonne) possibility. Many of its coal-to-chemicals plants are also in the vicinity of oil fields amenable to CO2-enhanced oil recovery (CO2-EOR). Thus, China has the unique opportunity to demonstrate CCUS at low cost, which would allow Chinese industry to gain familiarity in establishing major, multi-stakeholder projects, thereby building expertise on all aspects of the CCS/CCUS chain. These activities led to a declaration of intent by the Ministry of Finance of China at COP21 that the Chinese government will work with the ADB to establish several CCUS demonstration projects using this approach. This should also kick-start China’s intended overall CCUS demonstration and deployment program, which should position the nation as a global leader for ensuring that HELE clean coal technology will form a key part of a global low-carbon future.

The current low oil prices may have temporarily reduced incentives for CO2-EOR projects in China, but the fundamental drivers remain strong. Nonetheless, China imports more than half of its oil consumption while about 70% of its domestic oil production comes from nine large oil fields, which are all mature and are facing or will soon face a decline in production. In some of these oil fields, water flooding is no longer effective in maintaining oil production levels.8 Introducing CO2-EOR is thus inevitable to maintain the economic viability of such oil fields. To deploy CO2-EOR in these oil fields, it is essential to undertake early-stage pilot testing and demonstration. To overcome the lack of interest under the current oil prices, the government will need to incentivize industries to capture and transport CO2 and to conduct CO2-EOR.

The other factor that drives China’s intended CCS demonstration program is that “learning by doing” will subsequently drive down capital and operational costs. For example, engineers at the Boundary Dam coal-fired CCS project have announced that should they be required to design another CO2 capture unit, they could reduce the capital investment requirements by 30%. Equally importantly, in the future, rather than focusing on individual CO2 emitters, the costs of CO2 transport and storage, between 10 and 30% of the total CCS costs, could be significantly reduced by clustering power emitters together with industrial processes and using existing gas infrastructure. These industrial clusters could be linked to CO2 storage hubs via trunk pipeline networks and shipping routes. Again, China is well placed to adopt this approach in its industrial bases.

CONCLUSIONS

CCS can achieve significant decarbonization when applied to fossil fuel power generation technology, a wide range of industrial applications, and natural gas production. In particular, when applied to coal power technology, it can ensure developing countries and industrializing nations the low-carbon opportunity to maintain security of energy supply and economic competitiveness with low environmental impact of using coal. This will allow such nations to take the steps necessary to lift their people out of energy poverty and improve education prospects through access to electricity.

It seems inevitable that targeted support will be essential for CCS in the near term, and this will require innovative approaches that can achieve adequate financial support within a consistent policy and regulatory framework.

EOR can provide the foundation for future CO2 storage, by combining oil extraction with monitored CO2 storage to produce verifiable emissions reductions. EOR is expected to continue to act as a major driver for CCS since practices to promote increased CO2 utilization together with verified, permanent storage could deliver significant climate benefits.

REFERENCES

  1. Feng, W. (2015, June). Cross component turbine generator unit with elevated and conventional turbine layouts. Presented at ASME 2016. ASME 2016 POWER & ENERGY Conference & Exhibition, Charlotte Convention Center, Charlotte, NC, U.S. Technical paper publication Power Energy 2016-59720. Available through: www.asme.org/wwwasmeorg/media/ResourceFiles/Events/Power%20and%20Energy/PE-Program2016.pdf
  2. Makino, K. (2016). Clean coal technology—For the future utilization. In: G. Yue & S. Li (Eds.), Clean coal technology and sustainable development: Proceedings of the 8th International Symposium on Coal Combustion (pp. 3–9). New York: Springer. Available from: www.springer.com/gp/book/9789811020223
  3. Stern, N. (2007). Stern Review: The economics of climate change. Executive summary, www.wwf.se/source.php/1169157/Stern%20Report_Exec%20Summary.pdf
  4. Global CCS Institute. (2015, October). The global status of CCS: 2015. Summary report, hub.globalccsinstitute.com/sites/default/files/publications/196843/global-status-ccs-2015-summary.pdf
  5. Carbon Brief. (2014, 7 October). Around the world in 22 carbon capture projects, www.carbonbrief.org/around-the-world-in-22-carbon-capture-projects
  6. International Energy Agency. (2013, June). Technology roadmap: Carbon capture and storage, www.iea.org/publications/freepublications/publication/technologyroadmapcarboncaptureandstorage.pdf
  7. Echevarria, J. (2016, 3 July). “No technical barriers” to deliver CCS in the UK. Energy Live News, www.energylivenews.com/2016/07/03/no-technical-barriers-to-deliver-ccs-in-the-uk/
  8. Asian Development Bank. (2015, November). Roadmap for carbon capture and storage demonstration and deployment in the People’s Republic of China, www.adb.org/sites/default/files/publication/175347/roadmap-ccs-prc.pdf

The author can be reached at andrew.minchener@iea-coal.org.

 

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.
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