This week, on 25th July 2016, the Scottish Centre for Carbon Capture and Storage released an important new report on the potential for Industrial CCS in Scotland. In particular the report deals with the role that the repurposing of the 36 inch diameter, 358km long FEEDER 10 gas pipeline from St Fergus to Avonbridge might play. The report combines a vision and business case for the progressive decarbonisation of Scotland’s industrial base that contributes to meeting both UK and Scottish Government CO2 reduction objectives through smart investment in infrastructure.
The potential role of FEEDER 10 as a critical piece of national CO2 transportation infrastructure has been well understood since the Longannet CCS project was proposed in 2009. Currently, it is also critical to the future of the Caledonia Clean Energy Project concept at Grangemouth. The new report highlights the significant number of large industrial emissions points that lie within a 40km corridor of the FEEDER 10 line.
Whilst the economic attractiveness of clustering CO2 capture locations to share common transportation and storage infrastructure is easy to appreciate, industrial emissions are commercially complex to deal with. This is because industrial sources do not directly benefit from the Contract for Difference market support mechanism which is potentially so helpful for power generators (see Teesside Report). The report highlights that the capture cost and therefore the motivation for the operators of different industrial processes can vary extremely widely. Effective clustering therefore depends upon an initial anchor project from the most highly motivated operator to get things moving. This will inevitably have to pick up a disproportionate share of the initial costs. The KT package from the recent UK CCS Commercialisation programme highlighted that whilst both Peterhead and White Rose projects were carrying oversized transport infrastructure for their needs, the White Rose project was carrying the full cost of the 850% oversizing of the new pipeline construction. This was the case without any firm assurances that this spare capacity would have been taken up by third parties in the timeframe required to justify the incremental oversizing investment. As FEEDER 10 is existing infrastructure, this first mover burden is significantly reduced.
The SCCS report catalogues a series of CO2 emissions points along the FEEDER 10 corridor which illustrates the potential of the system. This data also demonstrates that the pattern of CO2 emissions around Scotland is changing very quickly with major emitters such as Longannet and Cockenzie closing and the majority of the Peterhead power plant having been mothballed due to high grid connection charges. Similar challenges are present around the country with key potential anchor projects for other clusters being removed very quickly due to plant shutdowns in both power generation and heavy industries such as steelmaking. This potentially represents export of emissions and “economic carbon leakage”. Furthermore, these changes are working on a shorter cycle than the development cycle of CCS projects and this must change. This demonstrates that historical carbon footprints are not always a good guide to the future requirements which are uncertain.
What is certain however is that systems such as FEEDER 10 are pieces of key national infrastructure which must be re-purposed and enabled for CO2 transportation in the national interest. Their re-use as CO2 transportation systems for early anchor projects will enable “forward looking” heavy industry who understand the business benefits of decarbonisation to “Locate in Scotland” close to these systems. This will attract and build renewed and preferred centres of industrial growth around these low carbon corridors perhaps including large scale hydrogen production from fossil fuels.
All this highlights the continued urgent need for governments (national or devolved) to establish CO2 Storage businesses in partnership with industry to build upon the recent (but now abandoned) work of others and kick start industrial offshore storage operations for Scotland and the UK where there is a mature and significant resource available. This, together with careful selection of carbon utilisation opportunities will make a positive contribution to repairing the broken market for CCS.
The SCCS report can be downloaded here.
Peter A. Brownsort, Vivian Scott, R. Stuart Haszeldine, Reducing costs of carbon capture and storage by shared reuse of existing pipeline—Case study of a CO2 capture cluster for industry and power in Scotland, International Journal of Greenhouse Gas Control, Volume 52, September 2016, Pages 130-138, ISSN 1750-5836. (http://bit.ly/2a8D9RV)
KPMG International – Carbon Footprint Stomps on Firm Value – September 2013
Teesside Collective and Pale Blue Dot Energy – Teesside Collective Business Case – June 2015
More information on Progressing Development of the UK’s Strategic Carbon Dioxide Storage Resource can be found here.
This article was written by Alan James.