Examination of Witnesses (Questions 106
- 119)
WEDNESDAY 7 DECEMBER 2005
MR COLIN
SCOINS, MR
RODNEY ALLAM,
MR NICK
OTTER AND
MR GARDINER
HILL
Q106 Chairman: Good morning and thank
you for attending the oral hearing of our inquiry on carbon capture
and storage. We welcome members of the public this morning. This
is a very exciting morning for us because we are all anxious,
at 12 o'clock, to see the new battle of the giants within the
Chamber! May I start with a general question to all of you? The
Government has launched its new energy review. We had nuclear
talked up two weeks ago. This week it is carbon capture and storage.
The Chancellor made reference to it within his pre-Budget statement.
Is it an essential part of the UK's future energy portfolio? If
so, why is it?
Mr Otter: I believe it is. Personally,
I think that if we are going to meet the 60% reduction CO2 targets,
say, by 2050, the huge reductions in CO2, we are going to need
all technologies. I would say that the clean fossil issue, which
really means subsequent capture and storage, will be an essential
part of that mix. I firmly believe that because fossil fuels are
not going to go away. They are here in the UK and they will be
part of the mix. This well certainly be true world-wide. That
means that we really do have to address urgently zero emissions
this year associated with fossil fuel, be that coal or gas.
Q107 Chairman: In terms of the recommendations
that the Government should be making at the end of its energy
review in order to hit the 2050 target of a 60% reduction that
cannot be achieved, in your view, without serious engagement with
CCS as part of that?
Mr Otter: I believe it should
be part of the mix. That is my view.
Q108 Chairman: Do you agree with
that?
Mr Hill: I agree with that. I
think it is important that a portfolio is available to meet the
energy needs. I think CCS is a very important option to combat
the impacts of climate change from anthropogenic sources. Importantly,
it has the potential to extend the useful aspects of the North
Sea, creating employment and enhanced oil recovery. Hence, it
can actually add to the diversity and security of energy supply
for the UK. I think also importantly it is an option that is available
in the short to medium term. If we are looking at securing energy
supply and tackling climate change, we can do this in the short
to medium term with the CCS technology.
Q109 Chairman: Surely, are we not
really fitting in to George Bush's view that you can continue
burning fossil fuels ad nauseam because this is a technology
which allows you to clean up the mess in your way?
Mr Allam: We certainly cannot
sustain our economy or our way of life without burning fossil
fuels, which are providing 70% of our total energy requirements
in this country and similar amounts in other countries. The other
thing of course about carbon capture and storage is that it allows
you flexibility in terms of the pricing mechanism for different
types of fossil fuel. There is quite a large divergence between
the price of coal on a heat content basis, for example, and the
price of oil and natural gas. Once you have carbon capture and
storage, you can choose different types of fuel with confidence,
based on a price mechanism. There is much more carbon emitted
with coal combustion, for example. It is a cheaper fuel. With
carbon capture and storage, you have freedom to choose fuels with
different prices.
Q110 Chairman: Are not you as a group
of companies between a rock and a hard place in that you are actually
investing or being asked to invest in renewables and renewable
technologies and there is very little left over for CCS?
Mr Scoins: We have about 40GW
of plant as an industry to replace over the next 20 years. We
need all the options available to us. We need choices and to be
able to make those choices between different technologies to keep
prices down and get diversity of supply. We need that framework
that gives us the ability to choose between the different technologies,
all of them.
Q111 Bob Spink: Could I ask Colin
Scoins to put on the record what proportion of power generation
there will be in 20 years' time that the 20GW represents?
Mr Scoins: It is 20GW in each
of the next two decades, so 40GW over that period. I think our
present capacity is about 70GW.
Q112 Bob Spink: We have the three
different broad types: pre, post and oxyfuel. Which of these types
is looking most likely to be helpful in the medium term, and that
is the next 10 years?
Mr Allam: The technology which
is most fully developed at the moment is the gasification of coal.
A number of plants have been built world-wide over the last 30
years or so for chemicals production using modern coal gasification
technologies. Of course coal gasification is an older technology,
which extends back to the 19th century in the more primitive types
of plants. The use of hydrogen as a gas turbine fuel is also a
fully developed technology. The production of hydrogen is well
established world-wide. Hydrogen as a gas turbine fuel as an alternative
to natural gas with CO2 removed is technology that is practised
commonly in the oil industry and in the ammonia industry world-wide.
The interesting point is that now, with the huge numbers of power
stations being built, particularly in China and India, which use
pulverised coal technology, we also have to concentrate very much
on technology which is applicable to pulverised coal firing as
well. There are two types of technologies, the oxyfuel and the
amine scrubbing, and both of those are being developed in parallel
at the moment. They both have their problems and they both have
their advantages. You have to look at both of those technologies
in parallel until proper selections will be made. I can anticipate
that different situations will require either one of those technologies
in the future.
Mr Hill: My sense is that pre-combustion
and post-combustion are available for short to medium term application.
Aspects of each technology are currently used in industry but
have not been brought together to form a pre-combustion or a large-scale
post-combustion application. The facts are that for post-combustion
it requires an order of magnitude scale-up 10 times over what
is done today. For pre-combustion, the scale-up required over
what is typically done today to produce hydrogen for refining
and for other chemical processes is only a matter of perhaps one,
two or three times. So there is less scale-up risk with pre-combustion
technologies because of the experience industry has with that
than with post-combustions. My sense is that both will be required.
The scale-up required is quite different and there is more experience
with the hydrogen scale-up than there is with post-combustion
today.
Mr Otter: If I may add another
equipment supplier point of view, clearly at the present stage
we have active programmes that cover all three. We firmly believe
that there will be different applications in different parts of
the world. I think the technologies are at different stages. There
are certain technical issues to be addressed; for example, on
the pre-combustion we still have some work to do on the burning
of hydrogen in gas turbines. These are quite soluble problems.
It is just a matter of having a development programme to do that.
That is what we are actively doing at the present time. Which
ones are going to be ready? I think there is a confidence issue.
There is a need to demonstrate technologies, as Gardiner was saying,
and that this is one of the key points. The integration of all
these different parts into the overall system is an issue. I am
sure the generating companies want to see the most optimum use
of the components in an integrated way because clearly there is
a detrimental impact on efficiency of the plant through the adoption
of these technologies. Therefore, you continue to need to have
the most efficient plant, even without capture. That is a particular
issue. There needs to be a continuing drive for efficiency improvement
in components and system in order to meet the detrimental impact
that will be coming from the CO2 capture.
Q113 Dr Iddon: I just want to pin
Nick Otter down on the burning of hydrogen. Could you indicate
what the possible problems are? Is it that the heat produced by
the hydrogen is a lot higher or is it the explosive capacity of
hydrogen? What is it?
Mr Otter: It is the issue of the
combustion and the fuel. This is done at high temperature; also
you have a propensity for flash-back and there is a degree of
instability in the combustion process. I think this is soluble.
It is a modification of existing combustion technology that we
certainly have, and we are very confident of being able to do
that. Of course it burns hot and you have to satisfy the NOx limits
as well. The higher the temperature you have traditionally higher
NOx too, so it is not just CO2, and I think that is an issue that
we would say, as a supplier, requires a balance. Clearly you have
to hit the CO2 for climate change reasons but there are other
issues like NOx, for coal SOx and all the other things.
Q114 Dr Iddon: By NO2 you mean oxides
of nitrogen, I presume?
Mr Otter: Yes.
Q115 Dr Iddon: Is the hydrogen burnt
raw or is it diluted?
Mr Otter: It is diluted.
Q116 Dr Iddon: What is it diluted
with?
Mr Hill: It is diluted with nitrogen.
Q117 Dr Iddon: That is where the
NO2 problem comes from?
Mr Otter: Yes. It is a about the
mixing, what proportions there are. You can come up with different
solutions with different mixing. That is one of the issues that
we have to address. Clearly, as an equipment supplier, we have
then to negotiate with our customers, sitting to my left and right,
about what they would like to see and what guarantees we can supply.
Q118 Bob Spink: Nick, you were just
saying that there is some scepticism about retrofit. When we took
evidence from, for instance, the Royal Academy of Engineering,
they thought that economically and practically there are problems.
Do you accept the Royal Academy of Engineering's analysis and
what can be done to overcome the technical functionality, scale
and the economic problems of retrofit?
Mr Otter: Let me say first that
you do need a retrofit solution.
Q119 Bob Spink: I think we have about
40GW to 50GW that will not be carbon captured unless we do retrofit.
Mr Otter: I think a cost-effective
retrofit solution is definitely required. Clearly that will impinge
on the stations. One of the issues that I think is probably of
great concern to the generators is that if you are going to fit
these technologies, you have to take the station out, and again
there is a loss of income in that. One of the ways forward that
we have been discussing is clearly there is an opt-in and opt-out
situation with certain bar actually opting out stations and then
bring them back in when subsequently there is an economic argument
to satisfy it.
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