Energy companies eye UK's billion-pound bet on carbon capture

Several leading energy companies are expressing interest in working with the British government to make carbon capture and storage (CCS) commercially viable.

“This high level of interest proves that the UK is back on track with CCS,” a spokesperson for the Department of Energy and Climate Change (DECC) was quoted as saying. “From the outset, we are working through collaboration with industry to ensure we make CCS a reality and importantly create the maximum return for what is one of the best offers anywhere in the world.”

CCS is considered a crucial strategy for controlling carbon emissions while allowing the continued use of fossil fuels, especially coal for electricity. The UK’s CCS commercialization program, which builds upon an earlier effort to kickstart the technology, offers £1 billion in direct funding support for the design and construction of CCS projects.

Companies chosen in this latest competition will also benefit from the government’s planned CCS feed-in tariff payments and other electricity market reforms designed to encourage low-carbon power.

Among the companies indicating their interest in the new CCS competition are Air Liquide (consortium lead bidder)/Progressive Energy (registered bidder), Alstom/Portland Gas Storage, Centrica/SEQ, Costain Energy & Process/Shell, CO2 Deepstore/SSE, Doosan Power Projects/SSI, National Grid/Summit Power and Peel Energy/2Co.

Under the latest program, winning projects need to be operational by sometime between 2016 and 2020 … “though earlier is desirable,” according to DECC.

While CCS technology has been proven to work, only a few projects capable of capturing and storing emissions on an industrial scale (more than one million tons a year) have been installed and, as the International Energy Agency  (IEA) notes, “(n)o large-scale installations exist yet in electricity production.”

The IEA says CCS will have to provide around one-fifth of all the carbon emissions reductions necessary by 2050 to prevent catastrophic climate change. To meet that goal, some 100 large-scale CCS projects would need to be operating by 2020, and more than 3,000 would have to be built by mid-century.