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Carbon capture – yet another green white elephant


AMBITIOUS ‘Net Zero’ plans by the Government for Carbon Capture Usage and Storage fail to withstand close scrutiny. 

Four carbon capture clusters (CCS) are planned to support the Government’s other costly aims to decarbonise industry and power. These are: HyNet in north-west England, East Coast in Teesside and the Humber, Viking, also in the Humber, and Acorn in Scotland.

While decarbonising industries such as cement might indeed be possible and desirable, applying the same logic to the electricity generating sector and its gas-fuelled power stations is problematic to say the least, both technically and financially. There is no evidence to show that 100 per cent carbon capture can be achieved, either at an acceptable cost or indeed at all.

There are three main technological routes for CO2 reduction from power plants – pre-combustion (used for coal fired power plants), post-combustion (mainly used for retrofitting to existing gas power plants), and oxy-fuel combustion (the Allam-Fetvedt process for new-build gas power stations). The application of each of these ‘may reduce the net efficiency of a plant by up to 14 per cent and increase the cost of electricity by 30-70 per cent’.

There are two sources of evidence in the public domain which suggest the Government should be wary of CCS schemes for gas power stations.

The first, a report on the economics of CCS published last year by the Laurence Livermore National Laboratory, concluded that CCS for most natural gas power stations was the least economically viable application of CCS.

The second, a 2022 report from the Institute for Energy Economics and Financial Analysis (IEEFA) on CCUS, made it clear that failed/underperforming projects considerably outnumbered successful experiences.

The latter report found only two post-combustion projects to draw on. The Petra Nova project, now shut, cost a cool $1billion for a 240MW unit (i.e. £3.25million per MW of capacity) for the prize of capturing just 28 per cent of emissions. The target capture rate for the Boundary Dam, the only currently operational post combustion CCS plant, is 65 per cent. The actual capture rate is unreported. Yet the cost has been exceedingly high – $1.3billion for 115 MW of capacity (i.e. £8.8million per MW).

There is one promising technology that could improve on these rates, but it cannot be used in existing gas power stations. New gas power stations using the Allam-Fetvedt process aim to capture up to 97.5 per cent of the CO2. Even here a note of caution is needed. Since the thermal efficiency of a plant declines with increasing carbon capture rates, it may not prove economic to have capture rates of above 90 per cent. A 50MW Allam-Fetvedt pilot plant was linked to the local grid in 2018 and a large-scale plant (300MW) using the process is due to start construction in 2024.

However, we should still be careful about accepting claims of such a high capture rate. A recent study found that theoretical capture rates in the range 95 to 99 per cent are based on steady state operation but that when gas power stations have frequent start up and shut down (SUSD) cycles, rates above 90 per cent will be challenging. As the penetration of intermittent renewables increases, such cycles are expected to increase. If the CO2 emissions increase considerably during SUSD, this will make the target of carbon-free electricity by 2035 unachievable. It remains to be seen whether this technology can live up to the general hype surrounding CCS. There have been no recent updates about Keadby 3, a proposed Allam-Fetvedt power station to be built on Humberside, and the company has not responded to requests for information.

As with all the proposed green technologies, there are the costs to the consumer to be considered. According to another recent report, electricity from CCS gas power stations is likely to be at least one and a half to two times above current alternatives. No up-to-date information is available about the costs of CCS for the Drax wood-burning power plants. The Drax CEO was quoted in 2022 as saying that electricity from Drax with CCS would cost £150/MWh. 

While wind and solar are carbon-free (if the lifecycle of the technologies is discounted) they still need back-up for the many hours in a year when these sources fail to meet 20 per cent of demand (over 3,200 hours in every year). The best method of back-up will be the next generation of small modular reactors such as those produced by Terrestrial Energy, X-Energy and Arc Cleantech. These SMRs have the ability to ramp up and down to meet demand. However, until they are rolled out in large numbers back-up will primarily have to come from natural gas power stations as batteries are prohibitively expensive.  

It is true that widespread rollout of CCS in all power stations would theoretically enable the Government to reduce emissions in the power sector without compromising current output and consistency of energy demand. A 90 per cent capture rate of CO2 might be achievable for new-build power stations which use the Allam-Fetvedt process. However, there is no evidence that this capture rate will be possible for retrofitted gas power stations and  retrofitting CCS to existing gas power stations could add at least 50 per cent to costs.

In conclusion, governments are always keen to talk up technological fixes that will solve seemingly intractable problems and make their job easier. However, CCS is an unproven technology in terms of a substantial reduction of carbon emissions and it is likely to be hugely expensive in the electricity generating sector. Like the many virtue-signalling green policies and technologies that have preceded it, the costs and benefits of CCS don’t currently add up as a worthwhile endeavour.

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Simon Clanmorris
Simon Clanmorris
Simon Clanmorris is a retired Chartered Accountant

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