Select Committee on Science and Technology Written Evidence


Memorandum from the Government


  1.  The Government welcomes the Committee's interest in Carbon Capture and Storage Technology. We are pleased to provide the Committee with copies of the reports we have undertaken over the last three years investigating this topic and look forward to appearing before the Committee in due course.


  2.  Government's responsibility for Carbon Capture and Storage (CCS) Technologies rests with the Minister for Energy in the DTI with the Energy Group taking overall responsibility for the development of Government policy to stimulate the Research, Development and Demonstration of these technologies so that they can eventually be brought to market by industry. The Office of Science and Technology (OST) allocates Science Budget funding to the Research Councils[1] who are responsible for decisions on the scientific merits of specific investments in basic, strategic and applied research in universities and Research Council institutes including those into CCS which leads eventually through to industrial R&D. DEFRA also has an interest in these technologies from the point of view of their potential to reduce carbon emissions both here and elsewhere in the world from the use of fossil fuels.


  3.  Over the last three years we have undertaken a number of studies into the feasibility of CCS. These have resulted in three reports being published which are available on the DTI's website. These reports were:

    —  Review of the Feasibility of Carbon Dioxide Capture and Storage in the UK (published September 2003),

    —  Implementing a Demonstration of Enhanced Oil Recovery Using CO2 in the North Sea (Published May 2004), and

    —  Carbon Abatement Technologies Strategy for Fossil Fuel Use (published June 2005).

  All were developed in consultation with industry, academia and the NGOs. The third report, the Carbon Abatement Technology (CAT) Strategy for Fossil Fuel Use, drew on the work of the first two studies and from a Consultation exercise undertaken during 2004. The Advisory Committee for Carbon Abatement Technologies (ACCAT), a Nolan body comprising of industry and academic experts as well as representatives from DEFRA and the Treasury, oversaw the development work of the CAT Strategy (a list of ACCAT membership is at annex A). To obtain expert advice for the production of the other reports special ad hoc advisory groups were established.


  4.  The "Review of the Feasibility of Carbon Dioxide Capture and Storage in the UK" was backed up with a number of studies into various aspects of CCS. The output from these studies can be found at: The Report concluded that fossil fuels will continue to be a major source of energy for both the UK and the rest of the world for decades to come and that a means for radically reducing the carbon emissions from their use will be needed if the UK is to meet its target of a 60% reduction in emissions by 2050. CCS offered a way to make radical cuts in these emissions. The report's key findings were:

    —  The UK has substantial geological storage capacity for CO2 in its sector of the North Sea with depleted oil and gas wells and also deep saline aquifers.

    —  There are also opportunities for Enhanced Oil Recovery (EOR) using CO2 in the North Sea fields although the costs at the time made this uneconomic. A concern was the very narrow window for exploiting this opportunity before fields were decommissioned.

    —  The costs for CCS were estimated to add around 1.0-2.3p/kWh to the cost of electricity which still made it competitive with other large scale carbon abatement options. However, the costs need to be substantially reduced through innovation, especially the cost of capture, which is about two-thirds of the total costs of CCS. International research indicated significant potential for cost reduction through innovation.

    —  Market incentives would be required to stimulate the take-up of these technologies, including rewards for the carbon abated under the EU's ETS.

    —  International collaboration to develop these technologies will be important and the UK has a leading role to play. We are already founder members of the USA lead Carbon Sequestration Leadership Forum and active in IEA bodies which have an interest in CCS.

    —  The potential for reliable and safe storage of CO2 in the geological strata beneath the North Sea needs to be demonstrated if public concerns are to be alleviated. Despite successful storage projects at Sleipner and Weyburn, current knowledge on the long-term effects (over 100s of years) is insufficient to be totally confident that storage would be possible over millennia. Further geological modelling is required in this area to give assurances.

    —  Legal issues need to be resolved, in particular both the OSPAR and London Conventions on dumping at sea need to be either clarified or amended to allow CO2 storage. However EOR is already permitted as in this context CO2 is deemed a working gas for incremental oil and natural gas recovery and not ostensibly storage.

    —  A regulatory regime will need to be developed in collaboration with other countries around the North Sea rim to control the storage of CO2 and to monitor its behaviour and to give warning of any leakage.

    —  Public awareness at the time was low and it was important that the facts about CCS should be well understood.

    —  Although the component technologies for CCS were already available and deployed worldwide they had not been demonstrated together in an integrated power generation system.

  The Report recommended a programme of work and activities to address the above issues which would take forward these technologies.

  5.  The Report "Implementing a Demonstration of Enhanced Oil Recovery using Carbon Dioxide" arose from a 2003 Energy White Paper commitment to assess the potential for demonstrating CO2 Enhanced Oil Recovery (EOR) as a pathfinder for the commercial deployment of CCS technologies in the longer term. Copies of this report can be found at:

  This report concluded that with little industry support for such a demonstrator it would not be feasible to press ahead with such a project. This conclusion was arrived at despite its potential to provide a return on the capital investment through the extra oil recovered, and the general acceptance that it would be permitted under both the London and OSPAR Treaties. Key issues which mitigated against support for a demonstration plant were at the time were:

    —  Oil companies already had the knowledge to develop a CO2 EOR installation and that a demonstration project would not add value to this knowledge. The problem was more that CO2 EOR was not commercially viable at the time.

    —  The level of support required to bridge this economic gap was uncertain although companies thought that the EU's Emissions Trading Scheme would not be sufficient.

  The Report finally concluded that EOR was worth considering over a longer timescale as a base for demonstrating CCS and it should be included in an overall strategy for the development of cleaner fossil fuel use. It would therefore be incorporated into the new CATs Strategy being developed at the time by the DTI.

  6.  "A Carbon Abatement Technology Strategy for Fossil Fuel Use" was announced by the Minister for Energy Malcolm Wicks on 14 June 2005 and represents the culmination of the research which the DTI has undertaken over the last three years into CCS and other low carbon technologies. The Report can be found at along with the results of the Consultation which was undertaken as part of its preparation. Copies of the Strategy should also be available in the House of Commons Library.

  Besides the public Consultation and the overall direction from the ACCAT, the Energy White Paper modelling work used to forecast the energy portfolio out to 2050 was extended and updated to accommodate the various Carbon Abatement Technologies which could contribute to the Government's 2050 target of a 60% reduction in carbon emissions compared to 1990. The Strategy developed the following overview:

    —  It was certain that the UK as well as the rest of the world will continue to be dependent on fossil fuel for power generation for decades to come. In fact, IEA forecasts indicate that by 2030, world-wide demand for energy will grow by 60% with fossil fuel's share being maintained at around 80%. This implies that CO2 emissions will increase by 62% over this period. In particular power generation capacity will need to increase by 1,300GW by 2020 to meet demand.

    —  Developing economies such as China and India will be in the vanguard of this growth with fossil fuel use accounting for about two thirds of their electricity generation. In China alone this year they are building around 30GW of coal-fired capacity—that is just under half the total power generation capacity of the UK. Hence the UK taking a lead to encourage the adoption of cleaner fossil fuel technologies in the rest of the world will be important.

    —    The UK only accounts for 2% of global CO2 emissions so any domestic contribution will be marginal. Assuming 20% of energy sources come from renewables and with no nuclear build, DTI energy projections suggest that around 75% of our electricity will come from fossil fuels compared to 70% in 2000 although much of this will be from natural gas.

  The underlying conclusions from this are that fossil fuels will be a major source of energy for decades to come and that to meet our climate change targets they have to be used much more cleanly than at present and therefore technologies need to be developed and brought to market which makes them environmentally acceptable. For the UK, the modelling work demonstrated that to meet the 60% target by 2050 under a number of scenarios CCS would need to be deployed to some degree.

  The Strategy identified three technology areas which could deliver carbon savings from fossil use. These covered:

    —    Higher efficiency power generation.

    —    Co-firing with lower carbon fuels such as biomass.

    —    Carbon Capture and Storage (CCS).

  The first has the potential to yield some 20% in carbon savings. The second around 10% whilst CCS, the most radical of the options and the least commercially developed, has the potential to deliver up to 85%.

  For CCS two key threads of activity are required before it could come to market:

    —    Carbon Capture—both capital and running costs need to be reduced to make the technology commercially competitive. Also the impact on plant efficiency needs to be reduced. There is a linkage to improving power generation efficiency to offset the impact of capture. Box 1 of Chapter 3 (page 25) of the Strategy illustrates this twin track approach which is essentially a technology/commercial viability issue requiring R&D and demonstration support.

    —    Carbon Storage—provides a very different problem, which is to demonstrate that CO2 can be geologically stored both safely and reliably. This issue raises a number of issues linked to:

    —  public acceptability not just by the green NGOs but also by the public in general;

    —  gaining recognition in the London and OSPAR Conventions on dumping at sea;

    —  the need to develop a regulatory regime for the control of storage, the monitoring and verification of the stored CO2 and its long-term ownership; and

    —  earning credits under the EU's Emissions Trading Scheme which would provide some reward for abating the CO2.

  The Strategy also recognises that support from Government will be necessary if CCS is to become a viable technology and it identified a number of tasks which will be required to take this forward. These include:

    (i)  development of a roadmap (to include a sources and sinks for CO2 study),

    (ii)  support for R&D and demonstration,

    (iii)  facilitating international collaboration,

    (iv)  developing a knowledge base to support the develop and deployment of the technologies,

    (v)  examining possible measures to encourage the early commercial scale deployment of CCS,

    (vi)  developing a regulatory framework for CO2 storage, and

    (vii)  increasing public awareness and understanding of CCS.


  7.  At the launch of the Strategy the Government announced that £25 million for would be made available for one or more Carbon Abatement Technologies demonstration project which could include CCS and also be available for the other two technology areas. This is in addition to the £20 million allocated from the current spending round for R&D over the period 2005-06 to 2007-08. The Research Councils have also recently awarded £2 million towards a "UK Carbon Capture and Storage Consortium". (Further details on this and other Research Council investments in CCS research are set out in the separate RCUK Memorandum). Work is advancing on all these activities.

  8.  Many of the technologies needed to deploy CCS are already used in a number of applications although they have not been completely brought together to demonstrate the entire process. It is generally acknowledged that CCS has reached the stage where it needs to progress from small scale research and prototype development to near to full scale demonstration in order to give impetus to the innovation process and gain the benefits of "learning by doing".

  9.  CO2 capture technologies have been used in number of applications over recent years. An example is the Great Plains Synfuel Plant in North Dakota, USA, where coal gasification with CO2 separation is used, although the output is chemicals such as hydrogen rather than power generation. However the separated CO2 is piped some 330 kilometres to the Weyburn oil field in Canada for Enhanced Oil Recovery purposes.

  10.  The Sleipner gas field in the Norwegian sector of the North Sea is an example of CO2 storage where StatOil are sequestering around one million tonnes of CO2 per year into a saline aquifer. The Norwegian fiscal regime for offshore CO2 emissions provided the incentive for this project.

  11.  Likewise BP have been taking a lead in developing CCS technologies. They already have a plant in Algeria at the In Salah gas field where they are stripping the CO2 from the natural gas and re-injecting into the field. They also are in discussions with the DTI about a project they are undertaking with Scottish and Southern Energy involving the Miller oil filed and the Peterhead Power station. A feasibility study is looking at taking natural gas from BP fields, removing the CO2 to form hydrogen which would be used to generate electricity at the Peterhead plant. The CO2 would be used to enable the recovery of additional oil from the Miller field. BP say that the project can only be successful if they have a market incentive equivalent to the Renewables Obligation. The question of market incentives for CCS is currently being looked at within the Climate Change Programme Review although it is clear that such an incentive has to be generic rather than aimed at a particular project.

  12.  A complete CCS process has not yet been demonstrated in which the CO2 is captured from a fossil fuel power plant, transported to a storage site and injected. A number of projects are already being developed to demonstrate this, in particular the USA's FutureGen project which aims to generate electricity from a coal-fired power plant with near to zero emissions. The US Government estimates that this first-of-a-kind power plant will cost $1 billion although subsequent plants will cost less. The EU is also considering such a project although not as advanced as the US work. It is generally estimated that these CCS plants could be operational by 2015. The CAT Strategy estimates that a CCS plant in the UK with storage in the North Sea could be possible by 2020, assuming the issues identified in the Strategy have been resolved.

  13.  Cost estimates produced by the DTI suggest that CCS are likely to be competitive with other sustainable technologies by 2020. Significant capital investment however would be needed for both the capture technology and to develop the infrastructure for CCS. Particularly as pipe work infrastructure would be required to take the CO2 from the source to the storage site in the North Sea with installations being required for injection and monitoring.

  14.  Evidence from around the world indicates that with careful identification of storage sites it should be possible to store CO2 both safely and reliably. Sleipner has for the last nine years been using a saline aquifer in the North Sea some 800 metres below the sea bed and with monitoring technology has been able to show that the CO2 does stay put. Additionally other projects, primarily for EOR, have shown that with careful selection of the site the CO2 can be sequestered successfully. Supporting this evidence is the fact there are numerous natural CO2 fields around the globe where it has been stored for millennia. This suggests that provided the right storage sites are selected and injection wells are effectively plugged so the CO2 is permanently sealed, CO2 storage should be reliable. However more evidence may be required to ensure confidence that CO2 can be stored for very long time scales (1,000 years and longer), through appropriate demonstration projects.

  15.  It is generally considered that over the next five to 10 years considerable work will be required to address the technical and non-technical issues to make CCS a viable option for sustainable power generation. In addition to the issues covered above the legal issues arising from the London and OSPAR Conventions will need tobe resolved and the DTI working with DEFRA have already initiated studies within these conventions examining the environmental issues. Work at the EU level is also progressing on the monitoring and verification standards which would enable CCS to qualify for carbon credits. Liaison with the other countries around the North Sea rim, in particular Norway, is also progressing with a view to develop a common regulatory regime for CO2 storage.

  16.  As a result of this work the Government's view that CCS could become commercially viable by 2020 if not by 2015.

September 2005

1   The Research Councils response to the issues of this inquiry are set out in their separate memorandum. Back

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