Sunday, April 29, 2012
Meanwhile, a showcase CCS project in the Canadian province of Alberta has been abandoned. The CAD$1.4 billion ($1.4 billion) Pioneer Project would have augmented a new 450 MW coal-fired power plant with an advanced CCS system for use in EOR. Participants had included TransAlta Corporation, Capital Power Corporation, and Enbridge, Inc., and significant funding was to be provided by both federal and provincial governments. TransAlta CEO Dawn Farrell explained: "The key for these projects is you need to be close to oilfields that can then use the CO2, and then you have to have enough of a price on the CO2 for the reduction offsets. And it was those two other pieces that wouldn't work at this time." Despite this setback, Alberta still plans to move forward with three other CCS projects.
Friday, April 27, 2012
Sunday, April 22, 2012
The issue with DAC and EOR derives from the fact that the dominant market for pure CO2 is for use by oil companies in EOR operations. DAC start-ups such as Carbon Engineering, Global Thermostat, and Kilimanjaro Energy seek to build machines whose primary output is pure CO2 scrubbed from the ambient air. As such, several of these firms are looking to supply oil companies with CO2 as an initial source of revenue as they develop more advanced and less costly DAC technologies. To critics, this looks like a "deal with the devil," insofar as it amounts to collaboration with the fossil fuel industry and will lead to GHG emissions that would not have occurred were it not for the additional oil recovered using CO2 supplied by DAC.
This view is both simplistic and impractical. The reality of DAC today is stated succinctly by Gunther: "air-capture technology has become a solution in search of a market, while its backers wait for the world to get serious about climate threat" (boldface original). And the reality of the CO2 market today is that it is dominated by demand for use in EOR--there are currently more than 100 EOR projects in operation paying $20-40 per ton of CO2, and the key constraint on future growth is lack of CO2 injectant supply. Like any other firm, for DAC start-ups to be successful they will need to be financially viable, and the surest road to financial viability in the foreseeable future is supplying CO2 to the EOR market. Other markets are either too small (for example, greenhouses) or too embryonic (algae-based biofuels), and support from the carbon allowance market is essentially nonexistent. Right now, EOR is the only meaningful game in town, and represents the only realistic option for DAC technology developers and their financial backers. To swear off involvement in EOR would deprive DAC of its most powerful motive force, and may well permanently consign DAC technology to the drawing-board.
Wednesday, April 18, 2012
The "Plantar Project" is expected to be the first of several A/R projects receiving credits under the CDM this year. CDM regulations permit the issuance of CERs to A/R projects only once per Kyoto commitment period, and the current (first) commitment period ends in December 2012. This rule creates incentives for A/R project developers to delay requesting credits as long as possible in order to maximize the amount of carbon sequestered and hence the amount of carbon credits issued. It is hoped that practical experience gained from these maturing A/R projects will inform the proceedings of the CDM Policy Dialogue, meeting throughout this year with the goal of making recommendations for reform of the CDM.
Monday, April 16, 2012
- The Commercialization Program - This £1 billion funding program is premised on the argument that, in order for CCS to make a meaningful emissions abatement impact, it will need to be widely adopted by the 2020s, which in turn requires that "final investment decisions for commercial-scale CCS will need to be made in the early 2020s" (p. 3). To meet this objective, the government plans to support multiple offshore storage projects in the power sector scheduled to begin operations between 2016 and 2020.
- A 4-year, £125 million ($199 million) R&D program including the establishment of a new UK CCS Research Center.
- Electricity market reform, including the introduction of pre-arranged "contracts for difference" to ensure cost recovery for utilities.
- The removal of key market barriers such as gaps in the supply chain and the absence of suitable industrial applications.
- International engagement to help position British firms as global CCS market leaders .
The CCS Roadmap is accompanied by a detailed Action Plan, shown here.With its new Roadmap, the UK has cemented its place as a world leader in the push for CCS deployment, which is essential for the development of CDR technologies such as DAC and BECCS. Of course, whether CCS is widely adopted in the UK by the 2020s remains to be seen, and there are many obstacles that stand in its way, as demonstrated by last year's failure at Longannet. Nevertheless, DECC and the government deserve credit for redoubling their efforts to support CCS, particularly given the current climate of fiscal austerity.
Thursday, April 12, 2012
Tuesday, April 10, 2012
On a related note, last week the UK government relaunched its £1 billion ($1.6 billion) CCS funding competition, which had been suspended following the breakdown of talks over the proposed Longannet plant last year (see CCS Stumbles in the UK, 10/30/11).