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CCS challenges can be overcome with more support - UK report

20th April 2012

New report assesses the technical, economic, financial and social uncertainties facing CCS technologies, and analyses the role they could play in achieving UK energy policy goals.

UK has launched a GBP 1bn competition to develop commercial scale CCS projects.

Challenges encountered by previous technologies similar to those affecting CCS technologies today have been resolved sufficiently, allowing the technology to succeed, concludes a new report for the UK government.

Given the right actions by government and industry, uncertainties surrounding CCS can be dealt with, says the report by the UK Energy Research Centre (ERC).

The publication follows the announcement earlier this month of a new long-term strategy for CCS by the UK Department of Energy and Climate Change (DECC), including the re-launch of a GBP 1 billion competition to develop commercial scale CCS projects.

Report author, Professor Jim Watson, Sussex Energy Group director at the University of Sussex said: “We still don’t know when CCS technologies will be technically proven at full scale, and whether their costs will be competitive with other low-carbon options.

“So it is vital that the government’s commitment to these technologies leads to several full scale CCS projects as soon as possible. Only through such learning by doing will we know whether CCS is a serious option for the future, and how the technical, economic and legal uncertainties currently facing investors can be overcome”.

Even if rapid progress is made with the UK’s re-launched demonstration programme, which aims to have CCS plants operational later this decade, difficult choices will remain for government and other decision makers, said the authors.

The report points to the French government’s decision to focus on one technological variety early for its nuclear programme and recommends this should be replicated by CCS, despite “a risk of picking inferior technology”.

The authors caution that it is too early for government and industry to close down on a particular variant of CCS technology. They welcome the plans for several substantial demonstration projects which will help to identify which variants of CCS technology can be scaled up successfully.

Better financial support must be designed for effective CCS demonstration and deployment, adds the report. “A regulatory approach that makes CCS compulsory for all fossil plants will only work if the technology is more advanced, and the additional costs can be passed onto consumers,” it states.

However, CCS technologies are not yet at this stage. In the mean time, the government should ensure that industry maximises efficiency and minimises costs of new CCS plants, recommend the authors. “History shows that not all demonstrations will perform as expected, and government should ensure that lessons are learned from successes and failures”.

The report also shows that costs do not necessarily fall in the way supporters hope – and can rise for several years before they come down, as technologies are scaled up. Government needs to ensure it has an “independent capability to assess costs to inform future decisions about whether to continue with public funding for CCS or to divert resources to other low carbon options”.

Lessons from UK nuclear waste management policy are highlighted to show how complex liability arrangements for CO2 storage could be. For CCS, a balance needs to be struck between limiting liabilities for investors and protecting the interests of future taxpayers, claim the authors.

Watson said: ‘It will be vital to keep options open in the government’s CCS commercialisation programme. Whilst it is welcome that the government has learned from the mistakes of the past, and now plans to support a number of CCS technologies, there is a long way to go before CCS is a reality at full scale. Complex negotiations with industry lie ahead. As the National Audit Office argued recently, such negotiations require substantial capacity and skills within government to bring such negotiations to a successful conclusion.’

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