Carbon Capture & Snorage UK
November 15, 2009
With the big nuclear announcement now out of the way for the UK the nascent UK CCS sector is hoping to get some kind of caffine jolt to wake it up.
The competition to get 4 pilot plants up and running has gone off the boil. Big players have dropped out and the anticipated cross-Europe rush to start burying CO2 has lost some momentum. Lets look at why.
Demand
The recession has hit demand. No doubt about it. UK manufacturing (what was left of it) has gone into hibernation and is not expected to get back to 2007 levels for another 2 or even 3 years. That means the forward demand curves have all been shifted by up to 5 years backwards from where they were in 2008. This really works against the shorter lead times in building new coal, compared with nuclear. The big wind projects that have already been approved, but are waiting for finance or grid connections, have been given £1.3bn in loan guarentees and a new planning regime to work under, further eroding the argument for new coal with CCS as a stop gap until the baseload new nuclear is online. DECC has ruled out any new coal without CCS.
Simply put, why try and prove up the new CCS systems to plug a supply gap that is no longer really there when the proven wind and nuclear options will provide much, if not most, of the mid-term replacement capacity ?
This is very much a UK specific situation and the case for CCS in the UK, to my mind, hinges on quick deployment. Any delays will reduce the potential for a self-sustaining CCS industry in the UK.
From this perspective it looks like new gas-powered peaking plants (or possibly biomass) will be needed to bridge the gap between baseload nuclear and intermittent wind, unless the UK can raise its efficiency substantially over the next 5 years or so.
Enhanced Oil/Gas Recovery
One of the big supporting economic arguments for developing CCS in the UK is its potential to replace the oil and gas industries as a major technology and skills exporter. I think that this is a justified argument as far as it goes. Having worked offshore myself I can see most of the skills being transferable between the two industries and there are a lot of workers looking to CCS as a way to sustain their livelihoods until oil and gas are no longer a mass market source of energy.
One of the ways that oil companies in the US and Canada have been coupling the two industries is by Enhanced Oil Recovery (EOR). Pump CO2 down into the oil reservoir and the additional pressure and viscosity drop (increased runniness of the oil) increase total recovery. The amount of the increase is very dependent on the age of the reservoir and its extraction history. For example a brand new oil field that has CO2 pumped into it from its very first production could give up as much as 50% more oil than without the addition of CO2. Older fields that have had a prior history of water injection may only give up an additional 10% or so.
This is a problem for the UK. Most of the North Sea fields are old meaning that the application of CO2 for EOR is limited. That means that returns are limited in both time and amount, which in turn means that the majors don’t see the 20-30 year profit lines they need in order to support their administrative and development burdens. The mid-tier and junior oil companies were excluded from the UK’s competition by the requirement to prove that finance was available for full development of the pilot plants and allied storage sites.
So the big guys are too flabby to be able to operate CCS at a profit in UK waters and the smaller guys can’t finance it. Bit of a hitch there.
There is a slightly bigger issue with CO2-EOR. Well spacing. Where Canada and the US (and Saudi, and others) have onshore oil fields where well spacing can be very close and access is not a major issue, the North Sea is not a location that allows close well spacing. This will push EOR to the limits technically and it will not be as effective as in onshore oil fields. Developing the new technologies in this challenging environment would be worth it for a permanent industry, the way we saw North Sea oil in the 70s as providing a new frontier, but not for an industry that has only ever been seen as a stop-gap we have to question what that new frontier is for when considering CO2-EOR and CCS together. Investing in an industry that will migrate away from the UK within a generation, or possibly two at the outside, doesn’t seem like a sound long-term strategy to me.
Intellectual Property and Licensing
If CCS is to be implemented in the North Sea, with or without EOR, the current oil and gas fields are the logical place to start. That means using IP from the oil and gas companies to fast-track development. Unfortunately the mechanisms for doing this are not yet in place. Likewise licensing is only just getting beaten into shape after the recent EU directives to allow CO2 storage under the seabed. Previously it would have been considered as the dumping of waste at sea.
So while those things are eminently do-able, they take time. They will be challenged and discussed, and re-drafted. Go around that loop a couple of times and you’ve lost a year to bureaucracy. That essential quick deployment doesn’t look so achievable and the investment risk escalates. The investors get more and more nervous and we see a situation where even the syndicates left in the UK’s competition start to ask whether its worth carrying on.
So, while I’m sure we will see a demo plant or two on the east coast of the UK in 5-10 years time, I’m starting to doubt whether the North Sea will be centre of a new industry. If I were an investor looking at CCS, I’d be looking at countries that are wedded to coal and that had large onshore sedimentary basins (for example USA, Canada, China, Germany, Poland & Australia, possibly South Africa). I would not be looking at countries that have mulitple energy sources, those with a big commitment to nuclear or those without large onshore sedimentary basins (for example the UK, Norway, Japan, France, Benelux, South Korea).
Update
The new UK Energy Bill 2009 (read on the 19th Nov 2009) includes enabling legislation for CCS in the UK. It allows financial aid for CCS development, without specifying limits, and it provides for DECC to provide regulation for the industry. So either Ed Milliband reads this blog and his officials at DECC are really quick off the mark or I wasn’t the only one to notice that things had gone a bit quiet. I’m not taking bets on the former.
A word to the wise – never be in London when there is a tube strike about to start, things get a bit crazy.
Anyway Day Two of the discussion meeting covered: Hydrogen storage, cerium oxide (for synfuels and hydrogen production), nuclear fission & fusion, more fuel cells, some super-capacitors and a bit of policy.
Interesting stuff that I noted down:
Zuttel
Each kWh provides €25c of full-cycle economic advantage while the current average cost to European consumers is about €5c/kWh.
The oil price spike in 2008 took those prices towards parity meaning, that no net economic advantage was effected by the energy expended, contributing in a large part to the economic crash.
I’d not heard it put in those terms before, and if there is a real and verifiable corelation between delta energy cost/benefit and the occurrence of economic crises, then we have a really powerful preventative tool. My guess is that this relationship is much less clear cut and that the materials scientist who proposed it isn’t fully up to speed on behavioural economics, but that’s only a guess.
Hydrogen carries 39kWh/kg
Recent regulations against the use of asbestos have effectively killed the prospects of using electrolysis of water as a large scale hydrogen production method in Europe. Asbestos was used in industrial electrolysis as a membrane.
Hydrogen storage tanks are now made of a thin blown aluminum shell, wrapped with kevlar or carbon fibre.
Hydrogen storage in metal hydrides can be twice the amount that can be held in tanks as the hydrogen is adsorbed onto the metal hydride in a very densely packed fashion. However, you need one metal hydride per hydrogen, so the storage media gets really heavy, really quickly as the tank size increases. There is an option to combine both hydride and liquid storage to get the best of both worlds.
Even with hydrogen stored in metal hydrides, the energy density is still only half that of gasoline.
Haile talked about ceria (cerium oxide) – a wonderful material apparently (she got her mineral economics all out of whack of course, but was better than most on the resources side).
Full cycle ceria-mediated synfuel production is currently 13% efficient, 23% efficient if you recover 50% of the process heat. The inputs are sunlight, water and CO2 as far as I can tell.
She quoted ceria availability at 40Mt – enough for >50,000 100MWe power plants operating 6hrs a day. Cost $140/MW installed using $20/kg of ceria. She didn’t mention that in Feb 2008 cerium price was $9.50/kg, so I will.
Cerium (for the uninitiated) is the least rare of the Rare Earth Elements (REEs), but that doesn’t mean that is is geologically more readily available than, for instance, lead which has a similar crustal abundance. The geochemistry of REEs means that there are very few deposits rich enough to be mined at a profit. Deposits are generally rich in either ‘light’ REEs or ‘heavy’ REEs, but not both. This limits a mine’s ability to fully service a customer with a mixed REE product, so limits its profitability. There are three main REE deposit types as far as I know; carbonitites (igneous intrusions such as that previously mined at Mountain Pass, California), ionic clays (where the REEs have been adsorbed onto clay minerals from groundwater) and REE-enriched iron ores. These last two are the forms seen in China, which currently provides 95%+ of the world’s REEs. Anyway, yes they may be relatively abundant, but they are not very available.
Grimes showed some nice animations on defect modeling in radiative environments.
Duffy talked on fusion. Apparently the bigger, the better with fusion (less losses through reduced surface area of the plasma per unit volume). ITER should be a net power producer giving up 10x the energy put in (50MW in – 500MW out), but it won’t be set up to extract that energy from the system because that isn’t what its for. It is primarily a materials test lab since the plasma physics is pretty much sorted (they think). The demo plant, to follow in 30 years or so, is sketched out to be a 3,000MW monster producing 50x energy input. First electricity to grid sometime after 2050.
For Paul; the fusion boys are not in the least worried about lithium availability for the tritium breeder jacket because there is ‘loads of it around’. As you know I tend to agree, lithium availability is energy price sensitive and not geologically constrained.
However other elements in the reactor vessel may be resource constrained – beryllium & tungsten specifically and they are looking at these very closely.
Hirose (a bit of a legend apparently, now works for Toyota Fuel Cells division)
The Japanese always have a different angle on things and it was fun to hear the debate between the Japanese view and the Californian when it came to transport availability. Hirose stresses the Quality of Mobility (QoM) and the role of fuel cells in maintaining or extending QoM, whereas Haile warned against generalisations of social conformity in development of scientific solutions. The point was actually raised several times that social science needs to be engaged in progressing societal change and the roll-out of these new technologies. I agree, why else would I be here ?
Toyota’s well to wheel efficiency for fuel cell vehicles using hydrogen is about 40%
Simon on Supercapacitors – ‘supercaps’ in the biz
They are a complimentary technology, not a disruptive one to batteries. They have a short discharge time ~10sec at high power, so have applications in acceleration of mass, quick deployment mechanisms and the like, but the most interesting applications were in energy harvesting from mechanical systems to time-shift that energy back into later acceleration. Effectively its the regenerative braking that is talked about in Formula One.
But you will never run transport just on supercaps, they just make the system more efficient, ~30% more efficient at present. Good news, but not a stand-alone solution.
Foxon was the only speaker to come in under time, brought no new data and was dull. I’m just all-round glad he’s not coming down to speak at our conference 
