Building a basis for successful CCS rollout – the essential Value for Money justification for the next wave of UK CCS projects

There is already significant progress on Final Investment Decisions (FIDs) for delivering CCS infrastructure elsewhere in Europe: the Northern Lights project in Norway, Rotterdam’s Porthos transport and storage project in the Netherlands and Denmark's Kalundborg Hub project.? It seems unlikely that the UK government funders and project developers will not also make FID on at least some projects soon, given the inherent advantages that UK has for implementing CCS, i.e. existing groupings of high-emitting industrial sites with ready access to the very large fraction of Europe’s CO2 storage potential owned by the UK.? But in the past, while CCS has always been recognised as critical for achieving net zero, the projects on offer (Longannet plus Goldeneye in the first UK CCS competition, Peterhead with Shell’s capture retrofit and Goldeneye in the second), given how they had been conceived and given the circumstances at the time government FID was required, demonstrably did not constitute sufficiently convincing Value for Money (VfM) cases and funding was not offered for either project.

Just dealing with the issues around each of the UK’s first CCS projects in isolation is a big enough problem, but the VfM argument for these projects to justify public support lies at least as much in their role as a basis for further CCS development in the UK as in the projects themselves.? Some aspects of this wider context are fairly obvious for the transport and storage networks, with pipeline sizing to cope with foreseeable future investment and the provision of tie-ins for likely connection both obviously useful.? It is also fairly obvious that adequate geological storage capacity must be there when required, despite the inevitable uncertainties about feasible injection rates and capacities in saline aquifers that, unlike depleted gas fields, have no history of large-scale fluid flow characterisation. ?Hopefully government funders understand that adding costs to build in optionality and, if things go well, temporary redundancy into CO2 storage systems is fully justified.? Even if private industry were to fully take the financial risk for storage performance the impact for the future of CCS in the UK of seeing investments stand idle for perhaps years while alternative storage sites are investigated and developed would be extremely damaging.

The ‘good basis for future UK CCS development’ VfM case for capture projects may be less obvious but is also very definitely there.? Some examples are perhaps most easily given from a ‘glass-half-empty’ perspective, for problems that detract from the VfM of capture projects for society.

• Duplicating FOAK test risks – if there are multiple identical or similar projects using new technologies for the first time then no additional learning is being obtained but costs and risks are being increased.? An example in the past is Longannet proposing to build two identical, and relatively small, 50% absorbers to meet an arbitrary throughput target set in the competition rules (see image above from the FEED reporting).
• Laying out an initial demonstration retrofit capture project so that subsequent retrofits on the same site become impossible.? Space is often constrained on existing sites so it is obviously tempting to take the path of least resistance for the first stage, but this only makes subsequent stages more difficult.? Looking at the unfunded Shell amine post-combustion capture plant at Peterhead that was retrofitted to one of the three gas turbines, it is hard to see how capture could have been applied later on the other two gas turbines – potentially at very low marginal costs if they could have been repeat units sharing the same pipeline.
• Using up most of the environmental limits for emissions associated with amine capture plants (i.e. amines, ammonia, other volatile degradation products) in a cluster region means that this first project can be technically within regulatory limits and not ‘waste’ money on ‘unnecessary’ additional emission reduction features, such as a high efficiency second water wash or an acid wash, as recommended in the Environment Agency’s guidance.? But this may make it infeasible to add many more amine capture projects in this cluster, even if they use these BAT options.
• Impressive-looking ‘key’ knowledge transfer deliverables that actually miss out much of the information that will allow a general industry-wide reduction in costs or risks because it is – more or less by definition – commercially valuable and the projects and their suppliers naturally wish to keep it for themselves if they can.? Virtually all descriptions of capture projects, notwithstanding how much public support they have received, contain many examples of where the VfM to the public has been reduced by omissions and redactions.? The only reliable way to overcome this problem is to define essentially fully open reporting, using knowledgeable and fully-independent external experts to drive the process, and agree up-front, before FID, very specifically what, very limited, information – if any – is not going to be available to be reported.

Fortunately it is relatively straightforward to avoid possible societal VfM pitfalls in most cases and present strong arguments for government support.? The biggest risk is probably a formulaic approach to the evaluation of projects that cannot cope with the multiple – and in some cases not readily quantifiable - routes for them to contribute to future UK CCS deployment and make it better, faster and cheaper.? But, as the great enthusiasm and sense of purpose in the sector at the moment shows, most people involved obviously want to see the next wave of UK projects contributing to the bigger CCS picture, in the UK and globally, as well as being successful in themselves.

(This article also appears in the June UKCCSRC Newsletter)