Coal is the dominant fuel of the electricity generation, with China, the largest user, burning 3.5 billion tonnes in 2012. But its long-term use demands capture of highly polluting carbon dioxide emissions which has indeed been demonstrated at laboratory-scale. However, in July 2013 Shell and SSE failed to secure EU funding for the Scottish Peterhead power station carbon capture & storage project. In 2007 previous plans had collapsed after BP withdrew from the £1bn ($1.6bn) venture. And now in September 2013 it has been announced that development of full-scale carbon dioxide capture at Norway’s Mongstad oil refinery had been discontinued following increasing costs and delays.
Is CCS priced out of the quest for low-carbon energy? In 2011 the UK’s Committee on Climate Change estimated that electricity generated by coal with CCS would cost twice that of natural gas without CCS and in 2012 America’s EIA reported similar numbers. So it seems that CCS is only viable with massive subsidies – however, so is offshore wind. But the other key issue is that (unsubsidised) natural gas power plant emits less than half the CO2 of coal-fired plant. It is therefore no surprise that the UK Government aims to replace old coal-fired stations with up to 30 new gas-fired power ones by 2030, with the remainder of power generation needs coming from a mix of nuclear and renewables. So is CCS buried for good, or is there something out there that could economically resurrect it?
John Westwood, Douglas-Westwood, London
+44 203 4799 505 or John.Westwood@DouglasWestwood.com