“Learning the Lessons and Re-vitalising CCS in Europe” – A blog report by UKCCSRC Executive Manager Bruce Adderley on the GCCSI 2016 European CCS Forum, Oslo, 13-14 October 2016. (photos courtesy of Sverre Chr. Jarild)
On 13 and 14 November 2016 I was fortunate enough to attend the GCCSI 2016 European CCS Forum and Members Meeting respectively. I say fortunately because these were two days of vibrant networking and knowledge sharing that refreshed my desire to see CCS deployed effectively both across the globe and (international readers please forgive the parochialism here) especially in the UK.
Sadly the project pipeline in the UK is currently experiencing a post-FEED study blockage, but globally this is not the case. In fact, it seems a good many more minds are now turning their attention to CCS and puzzling on how to deliver the thousands of units that must be deployed over the coming decades.
The timing and location of the Institute meetings could not have been better and provided the perfect opportunity for Ingvil Smines Tybring-Gjedde (State Secretary at the Norwegian Ministry of Petroleum and Energy) to speak about the funding extension for Technology Centre Mongstad (TCM), and the approval for FEED study work on three industrial CCS projects to allow a funding decision to be taken in 2019 on:
- Norcem AS – a project which is assessing the possibility of capturing CO2 from the flue gas of a cement factory in Brevik
- Yara Norge AS – a project which is assessing CO2 capture from three different emissions points at its ammonia plant at Herøya in Porsgrunn
- The Waste-to-Energy Agency in Norway’s Oslo municipality, which is assessing CO2 capture from a waste recovery plant at Klemetsrud (Klemetsrudanlegget AS).
Trude Sundset (CEO, Gassnova SF), was also a keynote speaker and discussed how Norway had been through a learning curve re. CCS, had consequently had their own false starts, but now understood that for Norway CCS is best deployed in support of decarbonising the industrial base. I particularly enjoyed the “3 for the price of 2” quote, which not only re-emphasised the need to make use of clusters, but also made clear that the geographical co-location of all the cluster elements was less important than the fact that they were all cost-effectively connected to the same store. In the Norwegian case it is a combination of road transport, shipping and (short) pipelines that delivers the right answer.
The keynote talks also encompassed a review by Kamel Ben Naceur (Director of Sustainability, Technology & Outlooks, IEA) of how CCS has developed on a global basis over the last 20 years. Whist much progress has been made it is clear that we are well behind the deployment rates required by the emission reduction targets to meet a 2°C scenario (let alone the 1.5°C in the Paris Agreement). The deficit could be as much as a factor of 10(!). The need for a rapid ramp up in deployment rate is therefore essential and it is to be hoped that the steadily increasing number of CCS containing country plans (to meet Nationally Determined Contributions (NDCs)) will help kick-start this. On a personal note, and having seen Kamel’s data on reductions in levels of investment in the oil and gas industry and the consequent effect on the availability of a skilled workforce, I must remember to talk to my teenage sons about becoming geologists or geophysicists.
In Session 1 (of the Gassnova/ GCCSI co-hosted Forum), representatives from all the companies involved in the Norwegian Full Chain Industrial CCS Project Feasibility Studies discussed their lessons learned so far. This session was the first to raise challenges that were to become strong themes across the full two days: the need to reduce costs, and the need to deploy tailored public-private partnerships to address the lack of commercial drivers, revenue streams, risk-reward sharing and bankability.
Tim Bertels (Head of CCS, Shell Global Solutions International B.V.) then effectively re-emphasised these messages as he reviewed lessons learned from Shell’s global CCS development programme, including how cost-revenue gaps had been closed.
Session 2 looked at policies to enable CCS and was given a passionate start as Lord Oxburgh outlined the main messages and key conclusions from the report he and his team have recently submitted to the UK Government in support of their ‘policy refresh’ process. My worry as the talk began was whether the international audience would see this as a ‘UK solution for a UK problem’, and hence of no relevance and interest to them.
How wrong I was. The work both addressed the challenges raised in Session 1, and clearly demonstrated the economy-wide potential of CCS. As we know it can directly address emissions from power and industry but, in support of the large scale production of hydrogen, it can also address decarbonisation of the provision of heat and some elements of the transport sector. It is in this context that CCS should be valued as countries plan their decarbonisation strategies.
The panel session that followed was also heartening. We heard both politicians and civil servants demonstrate that they understood this value proposition and therefore that CCS could and should play a significant role in global decarbonisation. Openly discussing what drives decision-making, and therefore what we as a CCS community must do, it remains clear that (somehow) we must convince at least a few politicians in each country to take a leadership position, as the rate of deployment required means that we cannot wait for public conviction to drive political change. To create these political ‘champions’ we must provide them with opportunities to demonstrate success (to both the public and their peers). Only then will sufficient multi-state momentum be built up that the required politically-driven initiatives can be voted through whether at EU or global level institutions. This raises question of how to deliver ‘successes’ when a typical large scale demonstration or first of a kind plant costs so much, and options to pursue in this regard were to be raised in later sessions.
The final session of the day focused on international developments, beginning with the research and innovation base that exists in support of the roll-out of CCS on a global basis. Nils Røkke (Executive Vice President Sustainability, SINTEF), outlined that the capacity exists in Norway, but emphasised that to maximize benefits to all there is a need to develop global centres of cooperation over CCS. Building on this, Roy Vardheim (Managing Director, CO2 Technology Centre Mongstad), described TCM’s current and future capability, and also stressed the increasing importance of the International Test Centre Network (ITCN). Nils and Roy also contributed to the ‘What are the business models’ an, ‘How to demonstrate success’ discussion strands by questioning the future business model for fossil power plants and demonstrating how CO2 utilisation can in some cases support closure of the revenue-costs gap.
To my mind, the latter also raises the issue of scale. At present the absolute magnitude of CO2 permanently captured through such deployments is small compared to the Mt/yr CO2 scale of, say, power plant related projects. So, on the one hand it can be argued that we might be wasting our time with these when we should be focusing our limited resources on large scale decarbonisation options. On the other hand the fact that such projects are smaller in scale means that the capital requirements are smaller and hence easier to raise (whether publically, privately, or a combination of both). They therefore potentially offer a fast track to the sort of ‘success’ needed to convince both politicians and the public alike. Personally, I do not think that it is an either or, rather that it is a case of driving forward as rapidly as we can any projects that address the business and political risks well enough to be able to close the revenue-cost gap.
Douglas Hollett (Principal Deputy Assistant Secretary, DoE, US) reviewed the status of CCS in the US. I have no doubt that those in the audience will have picked up on the following points:
- Lack of transport infrastructure in a number of regions
- It will require a combination of greater market pull and further legislation in order to increase the pace of progress
- There is a need for sustained funding of CCS R&D
- The DoE CCS Programme is likely to continue regardless of the outcome of the Presidential elections
If I put my UK-centric hat on for a moment I would add to this list:
- There is a need for CCS on gas as it is overtaking coal as the major electricity generation source
The UK is also likely to see numbers of new gas plant built over the next decade and having the US (and perhaps the likes of Mexico) as potential collaborators can only help.
To complete the session Frederic Hauge (President, Bellona) effectively issued a call to arms. In his opinion the CCS community must communicate to both politicians and the public that the Paris targets can be met if carbon negative technologies, such as bio-energy with CCS (BECCS), are deployed at sufficient scale. To make this happen both (vast) new sources of biomass need to be brought online and, in the EU for example, a ‘CO2 Market Maker’ should be implemented. It was then very interesting to see that it was a politician in the audience who agreed with the former (and suggested that the CCS community is ‘too polite’), and that it was someone who is effectively a civil servant who agreed that because of the revenue-costs gap CCS must either be regulated or an alternative system that results in the same outcome be put in place.
And so the formal sessions of the Forum ended on a high note, but one that was still asking searching questions of us as a community. I stated at the beginning of this report that the two days provided significant networking opportunities, and this was at its peak at the evening reception. Not only were we all presented with the opportunity to follow-up with speakers and our fellow attendees, but we were also privileged to hear Lord Stern speak about how he views the current state of the climate change mitigation process and the role that CCS should play as a part of that.
Day two was a meeting for GCCSI Members the focus of which was, with an alarming degree of foresight, mechanisms that could practically be used to address many of the challenges that arose during discussions the previous day.
Ward Goldthorpe (Managing Director, Sustainable Decisions Ltd), highlighted that before the proposed ‘Market Maker’ could come into existence there is a need to qualify far more storage capacity. In this way these market makers will have access to a portfolio of storage sites, resulting in a lower (storage) risk profile and multiple investment options. Practically inter-chain performance guarantees have been proven elsewhere and could be used for CCS, and many commercial public-private funding models exist. It is (just) a case of how the relevant government wants to risk share.
Moving away from commercial models and risk reduction David Elzinga (Economic Affairs Officer, Sustainable Energy Division, UNECE), looked further into the case for small(er) scale CCS deployments. In general R&D initiatives aim to support increases in the size of capture plants to enable scale efficiencies, but it was questioned whether this is the right route. By focusing on smaller scale projects, whether to support CO2 utilisation processes or to capture part of the emissions from a larger site, options such as modularization could be developed and demonstrated. There is also no inconsistency between (multiple) smaller scale capture operations and larger scale storage sites.
I was discussing where R&D can best be focused in support of moving from deployment of a First Of A Kind (FOAK) plant to delivering a significantly more cost-effective Nth Of A Kind (NOAK) plant (using an example of an amine-based post combustion capture on a natural gas combined cycle plant.)
Whilst novel capture technologies that take us a step beyond what is available today are needed by the late 2020s / early 2030s, large scale CCS plants likely to be built in the next 5-15 years will be based on technology that is already well established. In order not to put cost-effective financing at risk, technical developments must focus on sub-system developments and particularly options to reduce the capital expenditure required.
Michael Schuetz (Policy Officer, DG Energy, European Commission) and Ragnhild Rønneberg (Special Advisor, The Research Council of Norway) looked at EU funding streams that are and will become available over the next few years. The Accelerating CCS Technologies programme (ACT) to support pilot and demonstration is now underway, with the first round funding process currently at the second (full bid) submission stage, and rounds two (2018) and three (2020) expected to follow in due course. Whilst the submission deadline for ‘Projects of Common Interest’ is February 2017, both the European Regional Development Fund (ERDF, post 2020) and Modernisation Fund (from 2021) are also possibilities. A more probable route to funding is the Innovation Fund, the rules for which will be developed during 2017 and will have 450M ETS allowances (circa €5Bn by then?) available for funding purposes.
Finally, Svein Staal Eggen (Work Leader, CLIMIT Secretariat) outlined how the work of CLIMIT had begun with a focus on R&D, evolving to also address demonstration of capture technologies and the advanced monitoring techniques required for offshore storage. With these as the start point, and in line with much of the discussion over the previous day and a half, the following will be the focus for CLIMIT in the period 2017-2022:
- Technical risk and cost reductions for current technology
- Enabling large scale storage
- Development of next generation technologies with significant cost reduction potential
The Members Meeting finished with a visit to the waste recovery plant at Klemetsrud (Klemetsrudanlegget AS), one of the three industrial plants in Norway about to undertake a funded FEED study. I really enjoy these practical visits as part of a conference/ meeting, as they help to ground the theoretical conference discussions in reality – making those of us with an industry mentally much more comfortable.
This visit in particular emphasised how small(er) scale applications can fit within a wider and larger cluster development (and whilst also demonstrating key technologies). Having looked myself at CO2 transport by rail for larger volumes, the option to use road tankers for this smaller volume is very interesting and seems to me to open up access to larger (volume) infrastructure systems to a significantly greater number of smaller point sources. As a final personal note I would also say that Klemetsrudanlegget is the cleanest waste recovery plant that I have ever visited!
So, what to say in summary?
The main themes that arose were:
- The need to reduce costs
- The need to deploy tailored public-private partnerships to address the lack of commercial drivers, revenue streams, risk-reward sharing and bankability
- The need to be both more vociferous and creative in our engagement (as a community) with both politicians and the public
- And that we should be prepared to support any and all projects that are in a position to address the above issues, even if (for now) they are relatively small in scale
And I hope that I have backed up my initial claim that this was a great event to attend. I look forward to future ones and hope that you will seriously consider participating in the next one if you haven’t done so already.
Davey Fitch of SCCS has also blogged on the GCCSI forum – read his thoughts here.