APPENDIX 17
Memorandum from British Nuclear Fuels
(BNFL)
EXECUTIVE SUMMARY
1. Carbon Capture and Storage (CCS) could
have an important role to play as part of the solution to mitigating
greenhouse gas emissions. However, it is as yet a relatively unproven
process that would require demonstration of its technical effectiveness,
its economic and practical viability and public acceptability.
2. Opportunities for CCS to make use of
existing infrastructure built to recover the UK's North Sea oil
and gas reserves are relatively short-term and it may not be possible
to deploy CCS in time to exploit synergies related to using CO2
for Enhanced Oil Recovery.
3. CCS is likely to require some form of
financial support to make it financially viable. The EU Emissions
Trading Scheme could be one mechanism for providing a value to
emissions avoidance. However, the current structure of the EU
ETS does not provide sufficient certainty to incentivise capital-intensive
projects.
THE VIABILITY
OF CARBON
CAPTURE AND
STORAGE AS
A CARBON
ABATEMENT TECHNOLOGY
FOR THE
UK
4. Carbon Capture and Storage could play
an important global role in climate change mitigation, particularly
in countries such as China or India, where enormous growth in
fossil fuel combustion is likely. However, it still needs to be
demonstrated that CCS technology can safely sequester carbon dioxide
(CO2) and that it can achieve this at an acceptable
cost.
5. In principle CCS could be used with a
wide range of large-scale industrial sources, including fossil-fired
power plants. This would require capture of CO2 at
source, pressurisation and transport to suitable deep geological
structures where it would need to be stored for many thousands
of years.
6. It is important to note that current
technologies only allow for capture of 85%-95% of CO2
emissions from combustion plant.[11]
For a coal-fired power station this would mean that between 50,000
to 150,000 tonnes of CO2 would be emitted for each
terawatt hour produced.
7. The main concerns regarding CCS are:
— Demonstration of the technological
process.
— In the UK, the limited availability
of existing North Sea oil and gas infrastructure that could be
integrated with CCS.
— The environmental sustainability
and social acceptability of CCS.
— The lack of clarity in national and
international policy regarding the value of carbon avoidance as
part of climate change policy. Such clarity will be needed to
assure the economic viability of CCS and other climate change
mitigation options.
— The legal obstacles relating to sub-sea
disposal of carbon dioxide (a "waste" product) and uncertainty
over ongoing long-term legal liability for "ownership"
of the carbon dioxide).
8. Therefore, whilst CCS could be an important
part of the solution to climate change mitigation, it may take
at least 10 to 20 years to demonstrate its potential and to be
confident over the extent of the role it can play.
USES OF
CARBON CAPTURE
AND STORAGE
9. The two main criteria for CCS to be feasible
are:
— Availability of large CO2
sources and the ability to capture the CO2 emissions.
— Availability of suitable CO2
transportation infrastructures linked to the geological storage
sites.
10. Fixed CO2 source locations
in the UK are already well documented as a result of legislation
regarding industrial CO2 emission reduction measures.
These are primarily the fossil-fuelled electricity generating
stations, oil refineries with their neighbouring petrochemical
factories, cement production plants, and ammonia synthesis plants.
11. Large-scale transportation of CO2
would require an extensive pipework infrastructure, on the same
size and scale as that used today for the large-scale natural
gas supply network.
12. In some cases it is conceivable that
the same routes as the natural gas transmission system could be
used, especially where these already connect to gas fuelled power
stations, these being prime candidates for CCS. However, it is
clearly impossible simultaneously to use the same stretch of pipework
both to transport gas to a power station, and to transport carbon
dioxide away from it. It is therefore unlikely that large sections
of the existing natural gas transmission system will become available
for CO2 transportation use from clean coal plant until
natural gas is no longer used for power production and industrial
heating.
13. It is also possible that industrial
emission sources located at the coast could use gas tankers to
transport CO2 to storage sites, which could be depleted
offshore oil and gas fields. Potential geological storage features
in the UK are known to some extent via the work of the UK Geological
Survey. This organisation is further refining its knowledge through
being involved in exploring CCS options for specific clean coal
projects.
14. Both on-shore and offshore CCS options
will need to be considered. The following table shows one assessment
of potential UK storage options.[12]
|
| Type | UK Capacity (Gt CO2)
|
|
| Depleted Oil Fields | 2.6
|
| Depleted Gas Fields | 4.9
|
| Deep Saline Aquifers—Closed | 8.6
|
| Deep Saline Aquifers—Open | 240
|
|
15. The order in which these CCS sites would be used would
depend primarily on their relative costs. At present these assessments
are in their infancy. Note that the least cost option of using
the existing offshore oil and gas field infrastructure either
for simple gas storage or for Enhanced Oil Recovery will start
to diminish after about 2010 as the window of opportunity closes
and the facilities begin to be decommissioned.
PROJECTED TIMESCALES
FOR PRODUCING
MARKET-READY,
SCALABLE TECHNOLOGIES
16. CCS could, in the long term, be an enabler for the
growth of the "hydrogen economy" whose primary energy
sources will include fossil fuels, renewable energy systems and
nuclear power.
17. However, in the short-term CCS could have a more
important role to play in Enhanced Oil Recovery. This could benefit,
both in terms of time taken to implement a CCS approach and in
terms of economics from having pipeline connections already in
place plus available detailed geological information.
18. However, once an oil or gas field has been exhausted,
there is no incentive to maintain the pipe work infrastructure.
Therefore as oil fields increasingly become exhausted there will
be pressure to take advantage of the relatively narrow window
of opportunity before the pipe work infrastructure begins to degrade,
around 2010 in the case of the North Sea.[13]
19. It should be noted that linkage between Enhanced
Oil Recovery and CCS not only makes CCS more economically attractive,
but also makes oil available at a lower cost. Whilst this may
have advantages at time of constraints in oil supply it may ultimately
lead to higher greenhouse gas emissions.
20. The timescale for implementing CCS is determined
in part by the following factors:
— The economic and commercial drivers arising from
CO2 emissions legislation and markets.
— The availability or otherwise of industrial CO2
sources suitable for CCS technology.
— Fitting of any necessary technology to make such
sources suitable for CCS.
— Resolution of the legal obstacles and uncertainties
— Agreement on planning and other regulatory criteria.
— Results from CCS demonstration projects.
21. The complete set of technologies and economic conditions
necessary for large-scale implementation of the CCS option is
unlikely to be in place before 2020. However, there may be good
reason to prepare for this by requiring any fossil-fuelled replacement
of electricity generation capital stock in the meantime to be
suitable for carbon capture to allow a rapid uptake when the conditions
are right. In the UK, such replacement for coal-fired plant is
likely to be required to be commissioned between 2005 and 2015.
ECONOMIC VIABILITY
OF CARBON
CAPTURE AND
STORAGE
22. Current estimates of the economic impact on power
generation using Combined Cycle Gas Turbines indicate that in
the UK the cost of such power generation could rise by between
1 and 2.3 p/kWh.12
23. On this basis the economic case for electricity generation
from fossil fuels using CCS would require financial support based
on one or more of a range of mechanisms. Such mechanisms could
include new mechanisms or modifications to existing measures such
as the EU Emission Trading Scheme.
24. If emissions trading is the basis of valuing the
cost of carbon emissions then, based on the current structure
of the EU ETS, there would be uncertainty over long-term emissions
allowance prices, and therefore uncertainty over whether CO2
mitigation through CCS would provide acceptable returns commensurate
with the capital exposure and consequent risk.
25. Whilst the intention in most policy frameworks is
to allow market forces to determine the path to CCS, the lack
of long-term certainty in the EU ETS is likely to slow the uptake
of many options for carbon mitigation.
September 2005
11
IPCC Special Report on Carbon Dioxide Capture and Storage
Summary for Policymakers. As approved by the 8th Session of
IPCC Working Group III, 25 September 2005, Montreal, Canada. Back
12
Review of the Feasibility of Carbon Dioxide Capture and Storage
in the UK, DTI Report 2004. Back
13
Energy White Paper-Our Energy Future-Creating A Low Carbon
Economy, February 2003. Back
| 
