Overcoming barriers to CCS
through international
collaboration
Toby Lockwood
IEA Clean Coal Centre webinar, 27 Sep 2017
Status of Carbon Capture and Storage
• 21 projects in operation or construction phase (~40 Mt/y)
• Includes 2 coal power plants (Boundary Dam, Petra Nova)
• 5 projects in advanced planning stage
• 11 more in earlier stages of planning
• Deployment is slowing – most planned projects now in China
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Projects in 'Operate' or 'Execute' Projects in 'Define'
Secrets of success
• 10 of the operating projects are related to natural gas processing
• Nearly all projects are commercial EOR projects
• Only 5 active projects use dedicated saline aquifer storage of
CO2 (Sleipner, Snøhvit, Quest, Illinois Industrial, Gorgon)
• 4 of these are led by oil and gas (O&G) companies
• The two successful coal power projects (and recently halted
Kemper) involve EOR and low-cost fuel supply
• Challenging for fossil power sector to invest in current climate
(low load factors)
What are the barriers to
broader applications of
CCS?
Technical challenge to reduce cost
• CCS is technically mature for a number of CO2 sources
• But, >70% increase in COE, capture cost of $60-80/t CO2
• Potential for technological advances to lower the capital cost or
energy penalty (operating cost) of the process – $30/t CO2
Economic barriers and potential drivers
Project financing
• High entry costs and lead times relative to other low-carbon
technologies: large plant (not modular), storage appraisal, need for
substantial transport and storage infrastructure
• High cost of finance for first-of-a-kind projects
• Most demonstrations have relied on state grants or loan guarantees
• Export credit agencies can play a role (e.g. Petra Nova)
Regulatory drivers
• Power purchase agreements, e.g. feed-in tariffs (UK)
• Tax credits for stored CO2 (USA)
• CO2 markets (EU ETS, Quebec, California, Chinese pilot schemes)
• CO2 emissions tax (Norway)
• CO2 cap (Canada, UK – usually promotes gas-fired generation)
Carbon price insufficient for early demonstrations – need targeted
incentives (like renewables) to overcome ‘valley of death’
Many successful CCS projects have also been driven by long-term
company strategy to preserve fossil fuel markets
Regulatory and risk
CCS implementation requires regulations governing issues such as:
• Site selection, monitoring, and closure
• Long-term liability of stored CO2 (usually transfers to government)
These are largely in place in USA, Canada, Australia, EU.
Less-developed legislation in Asia may be a barrier to investment.
Problematic risks for CCS industry
• ‘Cross-chain’ risk – when the emitter defaults on obligation to
storage company or vice versa
• Leakage risk – potentially unquantifiable and uninsurable risk of
CO2 leak, e.g., future cost of EU ETS credits
• Policy uncertainty – will financial support remain?
Reasons for market failures
• Infrastructure: Challenging to promote shared transport and storage
infrastructure without certain emission sources and vice versa
• Multi-sector nature: ‘Full-chain’ projects often need complex
partnerships between O&G industry and power industry – different
expertise
• Oil and gas industry companies are uniquely able to manage some
‘full-chain’ projects alone (Shell, BP, Statoil, Chevron)
• However, even this sector is reluctant to engage in a high-risk
enterprise when returns are small
• Characterisation of new storage sites is time-consuming, expensive,
and needs to take place before any final investment decision or
revenue stream
New approaches
• Stronger government backing of problematic risks such as leakage
• Decouple storage and capture as separate industries
• State enterprise, regulated agency, or public-private partnerships to
manage the industry and develop infrastructure through:
• Mechanism to guarantee stable income to CO2 storage sector
• Provide grants for storage exploration
• Or, start with less ambitious full-chain projects – shipping CO2, find a
utilisation market
IEA, 2016
Public acceptance
• Strong public opposition was encountered 2009-2011 in the
Netherlands and Germany
• Improved public engagement strategies (and perhaps lack of
onshore demos in Europe) have avoided significant further
opposition
• However, CCS is a relatively unpopular climate change solution –
political action and investment may require stronger public backing
COP20 in Lima
International collaboration
Collaboration can be multilateral or bilateral, involving
governments, academia, or private sector
May involve shared funds, resources, knowledge, or in-kind support
Motivation
• Joint research and knowledge sharing
• Mobilise political resources
• Promote CCS-favourable policy and regulations in new regions
• Promote dissemination and uptake of CCS R&D
• Capacity building
• Enable manufacturers to invest in new regions
• Build mutual trust (nations not acting alone on CCS)
• Improve the global image of CCS
Barriers to international collaboration
• Intellectual property rights
• Conflicting motivations and goals
• Administrative and organisational differences across borders
Forms of international collaboration
• International organisations
• Membership of national governments (and other sponsors)
• Often focus on capacity building in countries with little experience
of CCS
• Advocate favourable regulations and policy
• Suggest R&D directions for global research community
• Improving awareness and understanding of CCS
Many of the new approaches and policies described for CCS have been
developed by international organisations
• Bilateral agreements
• Project-specific collaboration
• Research networks
Carbon Sequestration Leadership Forum
26 country ministerial-level initiative for encouraging CCS
development by identifying and managing multilateral research
collaborations. Current goals:
• Enhanced communications for CCS
• Global collaboration on large-scale CCS projects
• Enabling financing for CCS projects
• Development of 2nd and 3rd gen. CCS technology
• Global collaboration to assess geological storage resources
Key achievements:
• Financing framework for CCS in developing
world
• Report to 2008 G8 summit led to CCS
deployment targets
• Technology roadmap
• Promoting knowledge exchange between
key projects
• Capacity building fund and academic
community task force
Global CCS Institute
• Set up in 2009 by Australian Government
• Now a private organisation with diverse membership
(national/regional governments, industry, research institutes, NGO)
• Provides advice and knowledge sharing to improve acceptance of
CCS, increase commercial opportunities, grow political support
• Annual Global Status of CCS and online databases track deployment
of new pilot and demonstration projects
• Communication, education, and capacity building initiatives, e.g.
provides ‘CO2degrees’ educational material
• Prepares reports (project case studies etc.) and runs numerous
workshops and meetings
International Energy Agency
• A leading provider of information on all energy issues and policy
advocate – aims to satisfy the ‘energy trilemma’
• Funded by 29 OECD member countries
• Leading advocate of CCS – maintains that it should account for
~12% of the total emissions reduction required in its ‘2 degree
scenario’ to 2050
• Key reports: 2009 CCS roadmap based on G8 target of 20
demonstrations (updated 2013), ‘20 years of CCS’ (2016), 2014
regulatory review
• Runs a number of workshops and meetings on CCS
IEA Energy Technology Networks
IEA Greenhouse Gas R&D Programme
• Established 1991, a collaborative research programme with a
focus on CCS technologies
• Produces technical studies and other reports
• Runs the major biennial GHGT conference, as well as smaller
conferences and network meetings on specific areas of research
• Sponsored research at the Weyburn-Midale demonstration project
• Runs a CCS summer school for young researchers
IEA Clean Coal Centre
• Established 1975, looks at all technologies enabling cleaner use of
coal, including CCS (as applied to coal power plant and coal-using
industries)
• Produces technical reviews and market reports
• Runs the biennial CCT conference (CCS and other coal
technologies), and a series of workshops on specific research
areas
Zero Emissions Platform (ZEP)
Since 2005, a EU-based stakeholder group representing energy
industry, research institutes and NGOs. Goals are to:
• Enable CCS as a key technology for combating climate change
• Make CCS technology commercially viable by 2020 via an EU-
backed demonstration programme
• Accelerate R&D into next-generation CCS technology and its
wide deployment post-2020
ZEP has driven EU policy on CCS, through reports and political
engagement.
Key achievements:
• Contributed to EU’s Strategic Energy Plan (SET)
• Contributed to EU CCS Directive
• Proposed 12 demo target adopted by the EU
• Recommended European Energy Programme for Recovery and
NER300 funding schemes
Mission Innovation
• Launched at COP21, 23 participating states pledged to double
their funding to clean energy R&D to 2020
• Carbon capture is one of seven ‘Innovation Challenges’ (leads:
USA and Saudi Arabia)
• Focus on developing new, low TRL, ‘transformational’
technologies (complement CSLF focus on demonstration)
• Workshop for 200-300 CCS experts in Houston, 25-29 Sep 2017
• Will look at capture, storage, utilisation, and cross-cutting themes
• A workshop report will identify establish current state-of-the-art,
identify key research priorities and gaps, opportunities for
collaboration, and help direct R&D funding
Bilateral initiatives
• Based on memorandum of understanding (MoU) between
governments
• Many examples feature an OECD country active in CCS research and
China:
• Could allow highly developed research programmes and
technology providers access to China’s cheaper manufacturing
and larger CCS market
• Help build CCS capacity in China
• Increased access to real project experience for researchers on
both sides
• Bilateral collaboration also exists between OECD countries wishing
to pool research resources and knowledge, e.g. US-Norway
collaboration on CCUS:
• Generally involve knowledge sharing or collaborative research
projects rather than funded demonstration projects
USA-China Clean Energy Research Centre
Advanced Coal Technology Consortium
Established in 2009 as a collaboration between large US and Chinese
consortia of academic and industry players (19 US, 16 Chinese)
Phase I: 2011 - 2015, Phase II: 2016 -
• Established ‘Technology Management Platform’ for protecting IP
• Collaboration between Huaneng and Duke Energy on IGCC demo and
post-combustion pilots
• Collaboration between Yanchang Oil and US universities evaluating
the Ordos basin and EOR pilot – leading to Yanchang demo
• Gemeng International and LP Amina collaboration to build 50 MW
demo coal-to-chemicals facility in Shanxi
• Raised political awareness of CCS, helped collaboration within China
Issues (from WRI analysis, 2016):
• Many research papers resulted, but few patents or products
• Mismatched goals – e.g. US companies seeking to enter Chinese
market, Chinese companies seeking engineering data
• Some US companies withdrew
• Needs to be more industry driven to realise large projects
UK-China (Guangdong) CCUS centre
2013 MoU between UKCCSRC, Scottish CCS, Guangdong Low-
carbon Technology and Industry Research Centre and the Clean
Fossil Energy Development Institute. Aims to:
• Promote joint research and development
• Provide advice for local and regional governments
• Move rapidly towards demonstration of CCUS in China
Most work on CRP’s Haifeng coal
plant in Guangdong
• GEPDI and U Edinburgh
completed CCS ready design for
two new units at Haifeng
• Planning joint test centre at
Haifeng for new solvent and
membrane technologies and
operator training
• Conducted public outreach in the
province
Australia-China Joint Coordination Group on Clean
Coal Technology
• Established in 2007 to facilitate the mutually beneficial
development, application and transfer of low-emissions coal
technology
• Post-combustion capture project conducted a feasibility study for
a CCS demonstration in Jilin (CSIRO and Huaneng) – now plan to
look at a project in Queensland
• ATSERI-CERI programme facilitated numerous academic
exchanges and workshops
• CAGS – Runs joint research projects in CO2 storage and has
helped develop several suitable regions in China
• Future work will include collaboration on high-efficiency (HELE)
coal technology – growing focus on how Chinese technology can
benefit Australia
Near Zero Emission Coal Project
Began in 2005/6 as two separate projects and agreements – China-UK
NZEC and EU-China COACH project:
• Both initiatives had broad coalition of industry and academic
partners
• Phase 1 addressed capacity building, regulatory and funding issues
• EU and UK programmes combined for Phase 2
• Norway joined in 2009 to fund Phase 2a – Pre-feasibility studies
conducted for three possible CCS projects
• Two projects selected as promising candidates, but funds not
forthcoming for final FEED and construction phases
Issues:
Perceived imbalance in distribution of funds due to differing labour costs
Shortage of funds following global financial crash
Project-specific cooperation
Some large-scale pilot and demonstration projects have received
funding from outside the host country
Often linked to technology providers from the funding country
FutureGen: US DOE-sponsored IGCC/CCS project (cancelled 2010)
• Originally formed an ‘international partnership’ including Korea, India,
China, Japan, and Australia: ~US$10 million contributions
• Aimed to help spread CCS globally
• Partners expected to benefit from project knowledge and experience
• Intellectual Property may have caused issues with this approach
Japan-funded projects:
• Callide oxyfuel project (Australia) –
IHI technology used
• Gundih Field CO2 storage project
(Indonesia)
• Petra Nova (financing from Japan Bank
for International Cooperation) –
MHI technology used
International research networks
• International Test Centre Network
• Shares operational experience
from large pilot plants (led by US National
Carbon Capture Centre and TC Mongstad)
• CO2 Storage Data Consortium
• New initiative to assemble an
open database of storage datasets
• European CCS laboratory (ECCSEL)
• Optimise value of EU funds by
pooling access to CCS research
facilities
• CO2Geonet
• European expert network on CO2
storage
Closing remarks
• CCS faces some unique and challenging barriers to wider
deployment
• Transformational technology can play a role in reducing costs.
However, CCS will still require favourable policy, appropriate
regulations and better structuring of risk
• Strong incentive for countries to act together to avoid a competitive
disadvantage and pool limited resources
• CCS is also a highly cross-discipline technology – collaboration
between different industry sectors is critical
• International organisations have played a crucial role in
championing CCS and driving CCS policy around the world
• Many initiatives are research focussed – need still greater
coordination on more significant challenge of gaining sufficient
public and political support to harness adequate funding
Closing remarks II
• Research and major tech. providers are centred in regions with
declining fossil fuel use and high deployment costs, so need to
work more closely with Asia and coal-dependent, developing
countries
• Bilateral projects with China have largely been insufficiently
funded to result in CCS demonstrations, but may have paved the
way – raised awareness of CCS and established project expertise
• However, difficult to expect action from China alone, when
deployment is slowing in the OECD
• Is the time right for an internationally funded demonstration in the
developing world?