Will Trump and Brexit bury carbon capture?
Image credit: NET Power
Rolling out energy technologies that will help to cool the planet requires a stable regulatory environment to attract the necessary investment. We look at positive developments in carbon capture and storage (CCS) and ask if the sector will suffer from the tumultuous impacts of Brexit and Trump.
For a long time, carbon capture technologies that bury harmful carbon emissions underground or use them for other purposes such as enhanced oil recovery have been the ugly ducklings of climate change solutions.
CCS has lacked ‘policy parity’ with renewable energy sources such as wind and solar. It’s had less industry and government attention, partly because some environmentalists view the process of putting the carbon underground with suspicion and want a complete move away from fossil fuels. It has also been seen by the industry as costly.
Yet a new impetus for CCS has come from fast-growing economies like India and China that need to solve their own pollution problems while simultaneously reducing poverty. China is the second largest emitter of carbon in the world after the US, and India is third.
Both the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) say the Paris Agreement to limit global warming to 2°C above pre-industrial levels by 2100 will not be met without CCS.
In a major 2013 study on CCS, the IEA estimated that the technology would account for one-sixth of all emissions reduction by 2050. However, the authors of the Technology Roadmap also stressed that governments and industry “must ensure that the incentive and regulatory frameworks are in place to deliver upwards of 30 operating CCS projects by 2020 across a range of processes and industrial sectors. This would be equivalent to all projects in advanced stages of planning today reaching operation by that time,” the report added.
2020 is now just three years away, which is why recent events in the political landscape, with the election of Donald Trump in the US and the prospect of Brexit in the UK, have sent a small shockwave through the CCS industry.
The EU generally has lagged in developing CCS operations compared to the US. According to the IEA, of the 16 large-scale CCS projects operating around the world, two-thirds are in North America. Four out of five new projects under construction are also based in Canada or the US.
The one shining star in Europe is Norway, which has been operating CCS projects for 20 years, but that is because it has substantial gas and oil fields.
The EU’s directive on the geological storage of carbon dioxide ( the ‘CCS Directive’) lays down strict guidelines on where CO2 can be buried, and other safety measures, but holds no legal binding targets.
“Due to delayed deployment of CCS projects in Europe, the overall impact of the CCS directive has been underwhelming,” according to the environmental lobby group the Bellona Foundation.
The legislation is likely to be included in a package of ‘keeps’ in the Great Repeal Bill that will replace EU law with UK law upon Brexit, preventing a legislative void.
“There should be no reason why Brexit will lead to a fundamental change in climate policy as this is largely driven by the UK’s own Climate Change Act,” says Luke Warren, chief executive of the UK’s Carbon Capture and Storage Association.
“If you look at the government’s industrial strategy consultation, the focus is on supporting sectors where the UK has a competitive advantage. CCS is one of those sectors. We have the geological stores and industrial skills to deploy the technology. CCS could give UK industry a competitive advantage as the world moves to a low-carbon economy.”
CCS in the UK suffered a major blow in 2015, when almost without warning, the UK government cancelled its £1bn competition for CCS just six months before it was due to be awarded, breaking a pledge in the Conservative party’s election manifesto.
A small compensation for this policy U-turn was the decision this April to give £6.1m to the UK Carbon Capture and Storage Research Centre, set up to coordinate research and build a knowledge base, to continue its work for the next five years.
Yet fear that Brexit is occupying all the political bandwidth appears to be well founded. One of the victims is an emissions reduction plan, due last year, that is required to set out how the UK will meet the legally-binding fourth and fifth carbon budgets it has set under the Climate Change Act. It is way off target on both.
Because of the UK’s competitive advantage in CCS, the new plan is expected to give impetus to the sector.
In April, the environmental law firm Client Earth sent a letter to the business and energy minister Nick Hurd, threatening legal action unless the plan was published on time. Following a High Court ruling, the government agreed to issue the draft before the general election ‘purdah’ period.
“Government is long overdue to bring forward an ambitious plan that will close the persistent and unlawful gap between legally binding carbon budgets and current plans and policies,” said ClientEarth chief executive James Thornton. “Businesses need certainty, investors need to know where to put their money, and people need to be protected from climate change.”
The pressure for the government also comes from within its own ranks.
“A new approach to the development of CCS can advance this crucial technology at lower cost than previous plans, and is urgently required,” the Committee on Climate Change, the government advisory body for the UK Climate Change Act, recommended in its 2016 report.
As always, economics will play a large factor in driving polices. US consultantcy Grand View Research estimates the global market in CO2 will reach $8.6bn in 2025 from $6bn in 2015, driven by rising crude oil demand. The gas is injected into depleting reserves to improve production.
This enhanced oil recovery (EOR) technology is growing in importance in the key energy producing countries of the Middle East as well as the US, and by oil companies who see the attraction of cleaning up their images and the environment, while at the same time keeping up profit levels.
Last year, some of the biggest oil companies, including Royal Dutch Shell and Saudi Arabian Oil, pledged $1bn to develop technologies to capture and store emissions of greenhouse gases and improve energy efficiency over the next 10 years.
This could be a drop in the ocean compared to around $90bn of capital expenditure by these companies every year. Yet it is an important signal of their willingness to support CCS if and when the price is right.
International competition could also spur CCS roll out. In China, for example, construction has been approved on the Yanchang Integrated Carbon Capture and Storage Project in Shaanxi Province, capable of capturing more than 400,000 tonnes of CO2 per year from gasification facilities. This scheme was listed as a cooperation project in the US-China joint presidential statement on climate change in September 2015.
In the US, at least at the time of going to press, President Donald Trump was still intending to pull out of the Paris Agreement. His hand-picked top team include oil-drilling proponent Rick Perry as energy secretary, oil executive Rex Tillerson as Secretary of State and a sceptic as to human causes of climate change, and Scott Pruitt, heading the Environmental Protection Agency, which he wants to abolish.
“The only thing on the minds of agency staff at the moment is polishing up their CVs,” one engineer has commented ruefully.
Like Brexit, the problem has been lack of focus because of tumultuous political changes. Yet some see a chance that President Trump could make CCS a priority of international climate talks, as some of his fossil-fuel allies would like.
Trump may find it is not as easy to re-open coalfields as he promised voters, or at least it will be so expensive as to be unviable. Once coal mines are closed, they quickly degrade and become unworkable without a major makeover.
However, deep in the heart of Texas, new technologies are coming on stream that could revolutionise CCS, not least because they are much cheaper.
Most CCS methods take carbon out of power station emissions by scrubbing them with chemicals. This requires expensive bolt-on equipment, the so-called parasitic load. Backed by $190m in stimulus money from previous US administration, the Petra Nova project, a joint venture between energy companies NRG and JX Nippon, retrofits an existing coal plant with a carbon-capture system, powered by a small natural gas generator. The project is now up and running and aims to capture 1.6 million tonnes of CO2 per year for use in enhanced oil recovery.
Causing even more excitement in CCS circles is NET Power, a $140m, 50MW-thermal demonstration project using a revolutionary process known as the Allam Cycle to capture carbon dioxide and water during power production rather than afterwards (see accompanying interview with Rodney Allam). NET Power is a partnership between engineering firm CB&I, power company Exelon and 8Rivers Capital. Toshiba provided the turbine.
Traditional power-generating processes use steam as the working fluid to drive the turbine. Yet when the steam is condensed back into water at the end of the cycle, heat is rejected up the stack, resulting in a loss of up to 40 per cent of the energy created by the system. Instead, the Allam Cycle uses carbon dioxide as the working fluid, recycling it in the system. It uses pure oxygen instead of air to burn the gas that drives the combustor. The carbon dioxide and steam produced is then moved to the heat exchanger.
The CO2, under pressure and heated to 1,000°C, is kept in a super-critical state, turning into a thick liquid similar to crude oil. Instead of then being churned out into the atmosphere, as is the case in traditional power stations, that CO2 is recycled in the loop, spinning the turbine that drives the rotors to make electricity. More CO2 is added by combustion, while excess is directed off into a pipeline where it can be transported for other uses or be buried at a suitable site.
NET Power says electricity produced with its method will be as cheap as modern natural gas electricity production methods.
As CCS technologies develop so that the process can become cheaper and more attractive, it is also gaining support in Washington, with Democrats and Republicans working together on two bills that could help carbon capture gain more traction - not just for coal, but also for gas, ethanol and steel plants, and other sources of pollution.
The first bill, introduced in April by Senators Rob Portman, a Republican from Ohio, and Michael Bennet, a Connecticut Democrat, aims to tackle the cost of buying and installing the equipment at power stations. It would allow local and state government to issue tax-exempt ‘private activity bonds’ to firms trying to finance CCS projects. In the 1970s this method helped coal plants buy scrubbers to mop up air pollution.
The second, perhaps even more important, bill would tackle the incentive problem. If successful, it would boost a credit tax scheme by raising the incentive production companies receive from $10 to $35 per ton of CO2 captured and used for enhanced oil recovery and $20 to $50 per ton for permanent sequestration and burial.
However, there are still many political humps to climb over for both these pieces of legislation to take hold.
The IPCC says that in the end governments will lose out financially if they don’t start adopting CCS on a large scale soon, as they will end up having to pay more to meet their Paris Agreement targets.
Meanwhile, President Trump or not, power companies, whose plans can extend beyond one, even two terms of a US President, will probably do what they want anyway, and begin to factor in CCS, if the price is right, and the ugly duckling of clean energies could finally turn into a swan.
Nobel Prize winner's mission to make carbon capture economic
Finding a way to achieve cheap, clean, carbon capture when producing energy has been on the mind of chemical engineer Rodney Allam for a long time.
His lengthy career has taken him from the icy plains of Siberia to the rust belt of the US, becoming a world expert not just in CCS, but also in air separation, oxy-combustion and power generation.
Allam’s achievements include an Order of the British Empire, the Global Energy Prize and - as lead author of the Intergovernmental Panel on Climate Change report - a co-recipient of the 2007 Nobel Peace Prize.
Growing up in wartime Britain he says his family didn’t have a proper home until he was seven, moving from pillar to post after the government took his family’s house in Hastings for coastal defences.
Today, his beautiful Victorian country home is just a stone’s throw from the famous Chippenham railway arches built by Isambard Kingdom Brunel.
Allam studied engineering at Imperial College London, where he is now a visiting professor. He took his first job in 1961 with the American company Air Products & Chemicals, based in Allentown, Pennsylvania, and stayed with the company for 44 years, holding various roles.
Allam says he realised climate change was going to be a big problem in the early 1980s when he was also already working on the beginning of the Allam Cycle, although he didn’t know it at the time.
Air Products had been commissioned to work out how to get maximum leverage from the North Sea oil industry following the oil crises of the 1970s.
“One of the ways they did this was to take the US lead in selling gases for enhanced oil recovery. The most suitable gas for doing this was carbon dioxide.”
Air Products was one of the first companies to take CO2 out of the flue gases from power stations and produce it as a high-pressure pure material. A fully-costed scheme was devised for BP on how to do this, although it never went further than the drawing board.
Allam then worked on a UK government contract with his company looking at the impact on climate change of extracting carbon emissions from the atmosphere.
“My group became very expert in this. We knew what the costings would be and we knew what the effect was on the cost of electricity.”
The British government then nominated Allam to sit as an expert scientist on the Intergovernmental Panel on Climate Change (IPCC), the body set up under the auspices of the UN to provide objective scientific studies on the causes and potential impacts of global warming, as well as options for adaptation and mitigation.
The post was unpaid and in addition to his normal job at Air Products, and involved many hours of painstaking and detailed work. There is a certificate on the wall of his home that names him as one of the IPPC panel who won the Nobel Peace Prize.
It was during his work with IPCC that Allam reached the conclusion that the methods available at the time to remove CO2 from power station gases would increase the price of electricity by around 60 per cent.
“I was convinced no-one would ever pay that and therefore the whole system was rubbish,” he says.
He tried unsuccessfully to convince bosses at Air Products to let him work on finding an alternative solution.
“They thought my work was totally eccentric, so I did it in my own time. That is when I became interested in CO2 as a working fluid.”
Allam retired from Air Products in 2005. A banker friend put him into contact with his partners at 8Rivers, Miles Palmer and Bill Brown.
“They were trying to design power systems which would remove CO2 and had designed a combustor system, but had no idea how you would use it,” says Allam.
He joined 8Rivers in 2009 and a year later the Allam Cycle was born.
The cycle is in its final stages of realisation at a demonstration natural gas plant due to start running later this year at La Porte, Texas, owned by the US company NET Power. Allam is a partner in 8Rivers Capital, which formed NET Power with CB&I, Toshiba and Exelon.
If all goes according to plan, the Allam Cycle will enable the production of electricity more cheaply without releasing carbon dioxide into the atmosphere. It will do so by using carbon dioxide as the working fuel, relooped through the system, instead of being captured when going through the stack using bolt-on equipment. Any surplus will be piped away for use or sequestration.
“The idea of using CO2 as a working fuel is not new. The Russians first looked at it around 1938 but they couldn’t make it work - the efficiency was bad.
“I thought: it has to work. I just tried to figure out how. It took several months, but eventually I managed to crack it and get high efficiencies.”
His calculations are kept not on a computer hard drive, but stacked neatly in piles of paper files stored in an antique bookcase in his study, and are all done using a pencil and paper in very neat handwriting.
“A computer won’t tell you the answer unless you tell it what the question is and you also tell it exactly how to do anything. If you want to solve anything, you have to sit down with a pen and paper and flog it to death,” he explains.
“People use Excel spreadsheets, but the trouble with that is you lose immediately, unless you are very careful, the logic of everything you have done. You end up with tables full of figures and people tend to believe them. Big mistake.”
His partners at 8Rivers were surprised at the method of delivery in the computer age, but checked out all his calculations on the computer - and found them to be spot-on.
“I managed to work out the cycle. After that it was a question of more optimisation, and applications of the cycle for natural gas, coal, petroleum and biomass mixed with coal,” says Allam.
Combustion tests at the NET Power plant start this summer and the turbine with the combustor integrated will be ready to go into production by the end of the year.
Allam says he expects large-scale commercial production of electricity using his method by 2020, which could be in the US or the UK “if there are the right incentives”.
His work on development of new processes and equipment for production of gases and cryogenic liquids also earned Allam Russia’s prestigious Global Energy Prize in 2012. He now chairs the scientific committee that oversees the awards.
There can’t be many chemical engineers who have a patented thermodynamic technological process named after them while still living.
“Rather than waiting until you are six feet under, or in a crematorium box, I’ve been immortalised, which is a bit disconcerting actually, but it does give you a punch line when you are making a speech.”
Later this month he is due to give a talk to the local branch of Greenpeace, the group that has traditionally been one of the most vocal opponents of CCS.
Punch line aside, he says his main message will be to stop using the word ‘renewables’ for wind and solar energy, which he agrees need to be scaled up as well if the planet is to survive, mix in CCS, and rebrand clean energy production as ‘CO2-free power’. It might just catch on.
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