UK Government Delivering Carbon Capture Storage Louise Barr

UK Government – Delivering Carbon Capture & Storage Louise Barr Head, Outreach and Collaboration Office of CCS, Department of Energy and Climate Change

Why Does Carbon Capture and Storage Matter? ‘With Global population is set to rise from 7 to 9 billion by 2050, world energy demand is expected to increase by 50% over the next 20 years alone’ ‘Zero Emissions Platform’ ‘Unless the rise in average global temperature is kept below 2 degrees C devastating and irreversible climate changes will occur’ ‘Today renewables provide 13% of our energy and this could climb to 30% by 2030. Fossil fuels will remain our main source of energy for decades to come. ’ ‘CCS is an essential part of the portfolio of technologies needed to achieve substantial global emissions reductions’ ‘International Energy Agency’ ‘CCS will provide up to 20% of the reductions we need to make by 2050’ ‘International Energy Agency’ 2

Why CCS is important… Tackling Global Climate Change 3

What is Carbon Capture and Storage? CAPTURE We can capture at least 90% of the CO 2 emitted by power plants and heavy industry SAFE TRANSPORT Liquid CO 2 has been transported by pipeline for decades SAFE STORAGE Using natural storage mechanisms, CO 2 is trapped between 700 m and 5, 000 m underground

CAPTURE Pre-combustion capture CO 2 is captured before fuel is burned

CAPTURE Oxyfuel capture CO 2 is captured during fuel combustion

CAPTURE Post –combustion capture CO 2 is captured after fuel has been burned

TRANSPORT • CO 2 is already transported by pipeline, and also by ship when the distance between the CO 2 source and storage is too far • Widespread deployment of CCS will therefore require a CO 2 pipeline network

SAFELY STORING CO 2 The liquid CO 2 is pumped deep underground into one of two types of CO 2 storage reservoir (porous rock) Cap rock 700 m - 3, 000 m Deep saline aquifer Cap rock up to 5, 000 m Depleted oil and gas fields 9

Safety of Stored CO 2 Increases Over Time Residual Trapping Some of the injected CO 2 becomes trapped in the tiny pores of the rocks and simply cannot move, even under pressure Dissolution Trapping A portion of the CO 2 dissolves into the surrounding salt water Mineral Trapping After dissolution, some of the heavy CO 2 -rich water sinks to the bottom of the reservoir, where over time it may react to form minerals such as those found in limestone.

Why CCS is important for the UK… Ensuring domestic energy security 11

Why CCS is a major opportunity for the UK: oil and gas expertise and potential storage locations Map showing the location of offshore hydrocarbon fields and the major oil and gas-bearing sedimentary fields • UK is ideally placed for offshore CO₂ storage; • The estimated CO₂ storage capacity of the UK and its continental shelf ~ 22 GTonnes; • Approximately 100 years of capacity at UK current rate of emissions. Source: British Geological Society 12

The UK Government’s Commitment to CCS • No new coal fired power stations without CCS • Two Front End Engineering (FEED) Studies, undertaken to inform the 1 st CCS demonstrator • Established the Office of Carbon Capture and Storage • Committed up to £ 1 billion for the first CCS demonstrator • Committed to continuing public sector investment in three further CCS demonstration projects • Opened up the selection process for demonstrations 2 -4 to include gas • Wider regulatory reforms introduced to underpin deployment of CCS: Electricity Market Reforms, Carbon Price Floor, Emissions Performance Standard, Infrastructure Consultation

Maintaining the focus on Delivery …. . Demo 1 • FEED studies continue - expected to complete in spring 2011 - currently considering how best we disseminate this knowledge • Outcome of the procurement of ‘Demo 1’ expected to be announced in second half of 2011, subject to agreeing terms which are acceptable to the Government and the bidder • Pending successful selection, operation to start shortly after construction (201415) • 1 st demonstration is intended to bring invaluable technical, regulatory and commercial knowledge with an explicit commitment to knowledge transfer • First stage of a process to enable wide deployment in 2020 s • Demos 2 -4 will build on arrangements created to enable demo 1 to succeed

Commercial scale demonstration: Demonstration 1 • Scottish Power are the remaining bidder in the first CCS demonstrator project, subject to due diligence and satisfactory terms; • Scottish Power Consortium seeking to take forward Longannet demonstration project. • Scottish Power Consortium which also includes Shell (for the storage) and National Grid (for the transport); • This demonstration project would be retrofitting around 300 MW postcombustion capture technology; and • Will be one of the first commercial scale coal fired CCS projects in the world.

Commercial scale demonstration: Demonstration 1

Working together and sharing knowledge is key… Knowledge Transfer • Our aim is to provide key information to facilitate the development of other CCS projects in the UK and internationally • To deliver this, the Knowledge Transfer from projects is expected to go significantly beyond normal commercial practice • We will deliver Knowledge Transfer from the E. ON FEED and Scottish Power FEED • And Knowledge Transfer will be integral to the first demonstrator project • Knowledge Transfer will feed into the EU Project Network and the Global Carbon Capture and Storage Institute’s (GCCSI) knowledge sharing programme. 17

Maintaining the Focus on Delivery …. . Demonstrations 2 - 4 • Market sounding process signalled a good appetite of further demonstrators and several well developed proposals • Also signalled the need to include a demonstration of CCS on gas • EU launched the New Entrants Reserve funding (NER 300 funding) launched on Tuesday 9 th November 2010. This will provide funding (some £ 300 m EU ETS allowances) towards some 34 renewables projects and 8 CCS projects in the EU • The call for proposals for NER 300 funding was launched on 9 th November 2010, with responses due by 9 th February 2011 • Decisions on funding arrangements for demonstrations 2 -4 are being considered in the context of the March budget 18

Challenges to overcome… • • • Regulatory – Regulatory environment for key elements of the CCS chain not yet finalised (particularly relating to the consent for storage facilities and the treatment of liabilities associated with the storage of carbon dioxide) Technical – Challenges in, for example, scaling up of capture technologies, identification, characterisation and operation of storage, integration of the full chain Commercial – Need to develop frameworks that successfully integrate all elements of the chain into a commercially viable entity Reform of the electricity market – Emissions Performance Standard, carbon floor price, capacity guarantees Access to finance – Current economic circumstances, uncertainty over the future shape of the energy markets, challenges and risks associated with ‘first of a kind’ – all make for a difficult environment within which to secure finance Public acceptance OCCS role is to address these challenges to make CCS a reality in the UK

Maintaining the Focus on Delivery … Developing a Roadmap • • • Scale of challenge Market measures required for commercial deployment Demonstration to deployment How much CCS and by when? Roadmap will: • focus on actions to 2020 to enable commercial investment decisions in the early 2020 s • look at multiple roll-out scenarios to 2050 and identify longer term issues to be addressed 20

Maintaining a focus on delivery – What the Roadmap needs to address Learning from Demonstration Innovation & R&D Industrial CCS Infrastructure Public Engagement Commercial & Financing Skills & Supply Chain Regulatory Framework Scenarios & Trajectories 21

Other activities: International Global • Research and Development projects: progress under a UK-US Mo. U on Energy R&D; working towards launch Phase II of the EU-China Near Zero Emissions Coal (NZEC) project; • Capacity building: making operational the Carbon Sequestration Leadership Fund (CSLF) capacity building fund • Global leadership: joint lead with Australia on the Clean Energy Ministerial CCUS Action Group, support for CCS in Cancun (December 2010) • Knowledge Transfer through the GCCSI EU • Progressing work under the North Sea Basin Taskforce • Working with European partners through the European Industrial Initiative • New Entrant Reserve • Knowledge Transfer through the EU Project Network

The prize from CCS is potentially enormous… • CCS will provide up to 20% of the CO 2 reductions we need to make by 2050 • Wider deployment of CCS will build on the Demonstration Programme. CCS will be applied to gas fired power plants and industrial sources • CCS also has the potential to retain or create 70, 000 – 100, 000 high value jobs in UK • The CCS sector alone could be worth £ 1. 5 -3 billion a year by 2020, rising to 3 -6. 5 billion a year by 2030

Where Do I Find Out More About CCS? • www. decc. gov. uk/occs • www. zeroemissionsplatform. eu • http: //www. globalccsinstitute. com/ • http: //www. iea. org/subjectqueries/cdcs. asp • http: //www. bellona. org/ccs

Louise Barr louise. barr@decc. gsi. gov. uk