Coal companies face an existential threat from a growing divestment movement. CCS could offer an answer to the critics
One day’s coal consumption would dwarf the UN’s HQ in New York (Pic: WBCSD/Flickr)
By Gerard Wynn
US withdrawal of funding for a flagship project to demonstrate carbon capture and storage (CCS) is bad news for a technology which has laboured to get off the drawing board.
The announcement shows why a re-think, followed by a re-launch, is needed.
CCS is expensive, consuming energy to capture carbon dioxide (CO2) from the waste gas of factories and power plants, while depending on an extensive infrastructure to pipe the greenhouse gas out of reach underground.
There is only one project up and running anywhere, operated by SaskPower in Canada.
Because it is more expensive than incumbent fossil fuel energy, it depends on some kind of climate change policy to regulate emissions, which has so far failed to be ambitious enough.
In theory, the case to support CCS remains strong, for four reasons.
First, global efforts to cut carbon emissions have failed to match the scale of the climate problem. Future emissions cuts will have to be much tougher.
Second, while low-carbon renewable energy is making great strides in adding new capacity, this is against a small base.
Notwithstanding a sharp slowdown in coal consumption growth in China, even falling last year, fossil fuels remain the dominant energy source.
In power generation, renewable energy such as wind and solar, excluding hydropower and bioenergy, grew by 22 percent in 2012, according to the International Energy Agency (IEA), but still accounted for just 3.1 % of the total.
And they accounted for just 1.1 percent of total primary energy demand (i.e. including heating and transport, as well as power generation).
To slash carbon emissions, that leaves a choice: either cut emissions from coal and gas-fired power plants, using CCS, or shut them down prematurely, at great cost.
Third, there are few alternatives for cutting carbon emissions from steel and cement, which have no obvious zero carbon substitutes.
Fourth, CCS can in theory drive negative emissions, by operating alongside biomass-fired power plants.
That is a slightly crazy idea, given the fact CCS is barely tested, and forests will need increasingly to be conserved, as carbon stores.
But growing calls for net zero greenhouse gas emissions later this century may require bioenergy with CCS (BECCS). As a report by Oxford University’s Smith School stated this week, it should therefore be trialled, at least.
The question, then, is why has CCS fallen short?
First, the fossil fuel industry has failed to craft a convincing narrative for CCS, like that developed by environmental groups for renewable energy. There is almost no public awareness of, much less broad support for, CCS.
Second, by failing to tell a good story, the industry has failed to get the kind of government support as enjoyed by the renewable energy industry, for example under a decade of feed-in tariffs in Europe.
Instead, in Europe, the CCS industry was supposed to be supported by the European Union Emissions Trading Scheme (EU ETS), through a carbon price which made it more competitive for fossil fuel power plants to invest in CCS than emit carbon dioxide.
That was a bad bet, given the track record of EU carbon prices, which are an order of magnitude too low to support such a shift.
Time for a re-think
CCS now needs a new approach. In Europe, the timing for reform seems auspicious: the European Commission is presently reviewing the EU CCS Directive.
A draft of a report, supporting the review, made useful suggestions. For example, it proposed that CCS could be made eligible for the EU’s Projects of Common Interest, an existing 6-billion-euro energy infrastructure programme including cross-border power cables and gas pipelines.
But that wouldn’t be enough to drive more than a project or two.
For CCS you have to think big. That means using a big stick, such as banning new coal plants, and forcing existing ones to retrofit CCS technology.
Or else a big carrot; that means renewable energy-style feed-in tariffs, or much higher carbon prices. Or both.
Pending this greater global ambition on climate change, CCS might see a great breakthrough in cost cutting or innovation, similar to that achieved by solar power over the past five years. In this regard, Harvard University announced on Thursday it had found a promising new approach, based on baking soda.
Alternatively, and perhaps simplest of all, the fossil fuel industry could fund CCS itself.
That would be a huge step, given the “War on coal” rhetoric in the United States and elsewhere, where mining companies reject CCS-style emissions curbs on coal plants.
But coal companies now face a large, even existential threat from a growing divestment movement.
Investing in CCS may be just the kind of public relations opportunity to differentiate from peers, and be seen to jump the fence from climate problem to solution.
This article first ran on energyandcarbon.com, where you can find more analysis on the digital energy revolution. Gerard Wynn is an energy and climate change consultant. Follow him on twitter @gerardfwynn