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CCS: investment in futility?

By Mike Pope - posted Thursday, 23 July 2009


The mention of carbon capture and storage (CCS) often conjures up the need to reduce CO2 emissions from coal fired power stations. However, CCS technologies have the potential to do the same for gas production, oil refining, smelting and cement industries which also emit significant quantities of carbon dioxide. Australia is the largest coal exporter in the world and, per capita, its largest polluter.

Coal mining and handling employs 30,000 Australians, is a major source of foreign exchange earnings, government revenue and is a growth industry (PDF KB). Further, coal is used in most developing and developed economies as the cheapest and preferred fuel for generating electricity. CCS technologies have the potential to reduce CO2 emissions world-wide.

For all of these reasons, the Australian government has established the Global Carbon Capture and Storage Institute (GCCSI) in Canberra, provided it with $100 million per annum to fund its recurrent costs and allocated $2 billion in the next nine years to achieve its prime function: to accelerate development of CCS technologies globally and have 20 commercial applications in place by 2020.

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No simple task. On its success depends continued growth of the coal industry (actively encouraged by government); coal’s dominance for generating electricity (safeguarding Australian exports); and a major reduction of CO2 both in this country and overseas. A high risk strategy for the world if ever there was one, since timely development of CCS is by no means assured of success. Further, it ignores the imperative of preventing an increase of 2C in global temperature.

Several technologies are already well understood but must be further developed to capture CO2 prior to combustion (for example, when heating oil in the refining process) and when fossil fuels are burned (capturing CO2 from flue gases). Capture may involve the use of membrane filters, chemical scrubbers using amino solvents, or the use of metals which form carbonates. When captured, the CO2 has to be stripped from the agent used and safely transported to a point where it can be securely stored.

All technical problems can be overcome if given sufficient resources and time. The Australian government believes that 10 years and $2 billion from itself supplemented by additional resources from other GCCSI members will achieve the required outcomes. Whether this investment is prudent and will produce desired results is quite another matter. Questions which immediately spring to mind are:

  • Can outcomes be pursued efficiently?
  • Will they be effective and affordable?
  • Are cheaper, cleaner ways of generating electricity likely to emerge?
  • Would GCCSI funds be better allocated to developing solar technology?

Brazil, Russia, India - growing, major CO2 polluters - and China - already the worlds’ largest polluter, known as the BRIC countries, are not founding members of the GCCSI. Does this indicate that any of those countries will pursue their own priorities for reducing CO2 emissions? If so, will that involve duplicating the work of GCCSI members, working in areas which reduce use of fossil fuels or simply ignoring the need to reduce emissions? China is pursuing the course of increasing its use and dependence on fossil fuels.

Will the BRIC countries be engaged in a race to produce no carbon electricity while GCCSI tries to produce low carbon electricity using fossil fuels? Commercially and environmentally, no carbon is the more attractive approach, except of course to those with a vested interest in coal and oil. This raises the question of just how determined BRIC and other countries will be in opting for a CCS solution in the future, if it emerges?

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The challenge facing GCCSI members and non-members alike is: can technology be developed which is able to capture all CO2 emissions, liquefy and transport it, then inject it into a secure storage area and undertake these processes in an affordable manner?

A seemingly insurmountable problem with CCS is that these processes are expensive and require a lot of energy, between 25-40 per cent of power station output. This significantly increases the cost of electricity generated from burning fossil fuels, particularly coal and reduces its ability to compete with energy produced from renewable or nuclear sources.

Further, the current state of technology only enables capture of 80-90 per cent of CO2 emissions where they are mixed with other flue gases. This is not good enough since uncaptured emissions must be paid for at the market price for carbon, a price which will rise and add to the cost of using CCS. By burning coal in pure oxygen it is possible to produce flue gasses which consist of CO2 only, ensuring 100 per cent capture but provision of oxygen further increases the cost of CCS.

Transporting CO2 can only be undertaken efficiently by piping it from the power plant to identified suitable underground storage sites. Since few existing power plants are located anywhere near these sites it will be necessary to construct pipelines to them and thereafter maintain them and monitor for leaks.

Carbon dioxide in the presence of water is corrosive so pipes will have to be made from materials which resist this action, adding to the cost of CCS technology. Moreover, the technology developed will have to be capable of being retrofitted to existing power stations, further adding to costs.

The GCCSI may well be able to develop the technology but can it do so in a way which makes its use affordable? Will the cost of using CCS increase the cost of electricity generated from fossil fuels so much that it needs to be subsidised in order to remain competitive with electricity produced from renewable sources? Why would any country reliant on electricity generated from coal use CCS technology rather than switch to cheaper pollution free electricity - or simply continue polluting?

It should be expected that during the next 10 years battery technology will vastly improve the ability to store electricity. This will promote the use of photovoltaic cells (PVC’s) by domestic and small business premises, reducing national demand for fossil fuel generated electricity. Although an expanding economy will increase overall demand for energy, in Australia more of it will come from renewable sources, particularly geothermal and solar.

Geothermal heat will be more extensively used to replace coal in the next decade because, being emission free, it does not need to use CCS technology or pay for emission licences. It can therefore generate base load power and supply it more cheaply than that sourced from fossil fuels - see Geodynamics 2007 Annual Report, page 16.

The cost of solar power will fall in the next decade relative to the cost of using fossil fuels. Development of heat and electricity storage technologies will enable solar thermal power stations to supply electricity on an almost continuous basis by 2020. Some improvement in the efficiency of PVC’s can also be expected, lowering the cost of power produced by power stations using PVC-heliostat technologies.

Renewable energy technology is not going to stand still while GCCSI tries to grapple with capture of CO2 emissions from increasingly expensive electricity produced from fossil fuels. Countries which are endowed with accessible geothermal deposits, such as Australia, will develop them in order to generate cheaper pollution free electricity. They must and will do so to maintain a competitive commercial edge over other countries.

Most countries, particularly those now dependent on the use of imported fossil fuels to produce their energy needs, will opt for solar energy as soon as technology demonstrates that this is the more cost-effective way of reducing CO2 emissions - and dependence on costly imports. Pressure to move away from fossil fuels will come from the rising cost of coal accompanying global economic recovery, peak oil price escalation, the increasingly severe consequences of climate change and the threat this poses to human habitat.

Questions to be asked are: why invest more than $2 billion in CCS when it can do little more than prolong the uneconomic use of fossil fuels? Why allocate scarce resources to development of technology which increases the price of energy to uncompetitive levels? Why not allocate greater resources to speed-up development of more efficient renewable energy production?

Knowing that CO2 emissions must be stopped, isn’t investment in CCS technology an investment in futility? Eight CCS commercial applications to be in place by 2020 is a pointless target which will do nothing to reduce CO2 emissions in a meaningful way. On the other hand use of free and far more widely available sunshine could achieve so much more.

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About the Author

Mike Pope trained as an economist (Cambridge and UPNG) worked as a business planner (1966-2006), prepared and maintained business plan for the Olympic Coordinating Authority 1997-2000. He is now semi-retired with an interest in ways of ameliorating and dealing with climate change.

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