Carbon News

Tuesday 09 March 2010

Bob Pegler said CCS had a role to play in industry as well as the energy generation sector

Carbon capture and storage must expand beyond the energy sector into construction and manufacturing if it is to truly figure in reducing emissions, according to the senior vice president of the Global CCS Institute, which aims to spearhead the development of the technology worldwide.

Bob Pegler told NewEnergyFocus.com that, while carbon capture and storage (CCS) was "not a silver bullet," and was unlikely to make any more than a minor contribution to 2020 emission reduction goals, it would play a major part in the future energy mix if deployed in industry as well as the energy generation sector.

Mr Pegler was confident that CCS technology is not far from a wider deployment: "We've already got projects that are operating in a commercial sense and are storing CO2, so in terms of commercialisation of the technology I think we're there."

However, he admitted that the real challenge was to accelerate and broaden that commercialisation into the industrial side.

"Most of the focus around CCS has been on power-related projects. But there's a lot that can be done and needs to be done on the industrial side," he said.

"On the power generation side there are renewables, there are nuclear and other alternatives, but for iron and steel, for cement, for chemicals processing, for some gas processing there aren't alternatives. Carbon is an intrinsic part of the chemical process.

"You can't avoid CO2 so you've got to have CCS if you're going to do anything in that sector. And half the CCS effort will be in the industrial side and that's often underestimated," he added.

Opportunities

Estimates vary as to how large a fully functioning CCS sector could actually be. The G8 has a target of 20 full scale projects by 2020, which equates to around one million tonnes of CO2 stored per year. More ambitiously, the International Energy Agency has a target of 100 projects by 2020.

Mr Pegler's view is that to meet the target of limiting global emissions to half of 1990 levels by 2050, between 3,000 and 4,000 projects will be needed worldwide at a cost of "something like $33 trillion" (£22 trillion) - a figure which does not include the work on the industrial side.

The Global CCS Institute - a brainchild of the Australian government that was only established in its own right in July 2009 - is tasked with making this a reality

The Institute has a broad remit to accelerate the deployment of CCS worldwide by offering advice and enabling collaboration between its 190 members. Currently, 25 governments, including the UK, are members, with the remainder primarily made up of corporations.

One of the messages it is keen to relay to its members is that the scale of the challenge represents a massive opportunity for the pioneering organisations willing to start building a sector roughly equivalent in scale to oil and gas.

Mr Pegler said: "There are some significant first mover advantages from industry groups actually getting out there and taking the lead in terms of the deployment of the technology. There's a huge scope for industrial growth in this area - and economic growth.

"If you look at the total quantities of CO2 that would need to be stored under most of the models you're talking about an industry the size of the current oil and gas industry by 2050. And that's a huge global industry. So there are significant first mover advantages for companies to steal a march on that."

Barriers

However, Mr Pegler said a number of impediments still need to be overcome before this vision can be achieved, in particular making the sector more attractive to investors.

Whilst the UK, Netherlands, Norway and Germany had an initial lead, Mr Pegler said he thought these nations were now being caught up and even overtaken by North America and Australia.

Mr Pegler said much depended on getting the policy and legislative frameworks right and that some governments were acting in the policy space already. For example, a number of governments including the UK have said all future new coal plants are going to have to be CCS-ready or introduced competitions (see this NewEnergyFocus.com story), which Mr Pegler is slightly dubious about.

"I think governments need to be careful not to get too bogged down in competitions. They've got to keep the process moving and come to decision points that allow companies to go forward."

However, he acknowledged that the first projects will need public funding and added that governments have significant role to play in de-risking the investment to allow public money to flow into the sector.

"The first major projects, you're going to have to have some public financial support. You're going to have to have a public-private partnership and probably the fairest way of doing that when you're spending public money is through a competitive process that's open and transparent.

"By the same token, it's important that you don't spread that funding too thinly or you'll end up with a lot of projects getting a little but none getting enough to actually move to the next step. There's some political, pragmatic and technical judgements there and it's a challenge bringing all that together."

Support

As well as finance, Mr Pegler identified issues around public support - not just nimby-ism but also those people who doubt that fossil fuels should be involved in the future energy mix.

He admitted this was a problem common to most large energy projects and said that part of the Institute's role should be to learn from other industries.

"It's certainly a priority for the Institute to work with governments and work with projects to address public support and public acceptance issues.

"I think unless we can get that right that could become a significant barrier."