Press & Media Relations
Tel.: +32 2 515 10 71
06 December 2007
There are now over twenty known CCS demonstration projects in
Europe, which is a highly "positive sign from the
industry", said Jan Panek, Head of Unit for
Coal and Oil at the European Commission's Directorate-General for
Energy and Transport, as he outlined, for the audience at the
EURELECTRIC conference on Carbon Capture and Storage
in Brussels on November 29, the awaited Communication from the
Commission on supporting early demonstration of sustainable
electricity production from fossil fuels. While the European
Emissions Trading Scheme (ETS) should be the key incentive for
market deployment of CCS, Mr Panek stressed that the technology
chain requires early demonstration to test and prove its
"viability and practicability". The Commission intends
to help early "risk-takers" overcome the key hurdles - ie the need
for an enabling regulatory framework, completion of technology
development, the significant size of investments required,
increased power plant operating costs and the current lack of any
Of three possible approaches to the demonstration phase: relying on national and industry initiatives with a "hands-off" policy by the Commission; coordinating and complementing national and industry initiatives, which Mr Panek called a "solicited commitment" approach; and a centralised EU-programme with public-private partnerships, the Commission sees the second approach as probably the right way to go. A centralised, public-private partnership-type programme might have advantages as regards reaching the critical mass of demonstration projects needed, but would probably be slow because of the political and financial agreement needed. If CCS is to be a working solution that can contribute to the overall policy framework, we need it in place by 2020. That means having demonstration projects up and running by 2015, to give time for fine-tuning, he said, which in turn means starting construction around 2010.
The Commission proposes to help committed project developers coordinate and exchange information by creating a "network" to support carbon capture and storage demonstration. This would also enable collective action on issues such as public acceptance, Mr Panek explained. "It will be easier if we group projects and present them as a concept." Acting at EU level would also make it easier to convince high coal consuming countries, such as China, India and South Africa, of the benefits of using CCS, he pointed out.
Although issues surrounding financial support schemes will be left to later discussions, Mr Panek answered a key EURELECTRIC concern when he declared that financial schemes, if any, would only complement the ETS, not replace it. However, the ETS would not be sufficient in itself to bring on the early demonstration projects. The Commission intends to clarify state aid rules on support for environmental technology so that governments will be able to assist the CCS projects with the extra costs incurred and also sees the strategic energy technology research plan as vital to help reduce those costs. However, Mr Panek stressed that CCS was only one of several CO2 mitigation technologies. "We don't want to be seen to be pushing CCS to the detriment of others such as renewable energies," he said.
Pierre Dechamps of the Commission's Directorate-General for Research told the delegates about the ongoing EU research projects related to CCS, such as CO2SINK, CO2GEONET, CO2ReMoVe and HYPOGEN. Under earlier EU Research Framework Programmes, some €170 million were spent, mainly focussing on the safety of CO2 storage "on relevant timescales". The current 7th Framework Programme has provided some €300 to 400 million for clean coal and CCS research over its seven-year period.
"A lot of things are happening and industry is taking initiatives", emphasised Lars Strömberg of Swedish-based power company Vattenfall, pointing to his company's pilot plant at Schwarze Pumpe in Germany as a prime example. The company has set out to halve its CO2 emissions by 2030 and believes it "can be done at reasonable costs". Mr Strömberg acknowledged that the learning curve for carbon capture was "extremely steep", but warned against expecting a breakthrough technology "waiting around the corner" before 2020. He was confident that technological development, increasing cost-effectiveness and new technologies will arrive but bearing in mind the planning permission needed for the infrastructure, "it will take at least seven years to achieve a demonstration plant including capture, transport and storage". That means starting in 2008 -to be ready by 2015, he said.
With regard to different segments in the CCS chain, Mr Strömberg said that although 70-80% of the overall costs of carbon capture and storage will fall on the capture phase, the critical element for putting the whole chain in place will be laying pipelines, which can take seven years to complete even where the plans are not challenged on environmental grounds or opposed by local communities.
The International Energy Agency predicts that some 1,600 CCS plants will be needed worldwide by 2050. In its energy technology outlook, the IEA expects CCS to deliver about a fifth of all global CO2 reductions, explained Tom Kerr. In an upcoming publication, the IEA will designate CCS as a key global carbon abatement option. In order to enable speedy deployment, Mr Kerr suggested fast-track demonstration with adaptive regulation, where the regulatory framework is finalised during its operation, a process of "learning together with the technology".
Looking beyond the demonstration of the technology, Gregory Cook of environmental consultancy ERM outlined the key preconditions for the technology's long-term success in a competitive environment. He systematically explored questions along the whole CCS chain, which policymakers, investors and operators will have to face and answer to make the different segments from capture to storage work together. Mr Cook pointed to promising experiences with previous technology deployments; in one case where nitrogen oxide abatement (deNOx) was deployed on an industrial scale, costs dropped by nearly 50% over a 25-year period. He believed that for CCS, "cost reduction through learning by doing will prove crucial in the next 20 to 25 years". The long-term success of the technology, Mr Cook concluded up, will boil down to the key question "can investors get a payback?".
It is a basic fact that each CO2 storage facility must be located somewhere, and must be accepted by the local communities above and around them. Municipalities will have to play a key role. At the moment, however, "there are more questions than answers", Martin Andersen from the Danish municipality of Kalundborg, pointed out.
During the question & answer session, speakers expressed their belief that CCS will play its role in abating CO2 emissions in Europe but were clear that "it will take time". Regarding the number of demonstration plants expected to be built by 2015, speakers emphasised that the actual number of projects running will not be the main determinant of the success of demonstration of the technology. They found it important, though, that by 2015 a "robust and convincing demonstration effort" should be on its way in Europe. Mr Panek said that "CCS must come, one way or the other" as without it, the electricity industry will not be able to go on using fossil fuels. At the same time, the Commission recognises that "it is not realistic for the industry to go ahead with demonstration alone". When it comes to market deployment, Mr Cook argued that the Commission's key task is to give "clear signals that CCS is happening", but it will be for Member States authorities to contribute by securing long-term loans as banks "tend to be reluctant" to finance such projects. Mr Strömberg estimated the extra costs related to CCS to be €400 to 800 million for each large demonstration plant.
Press & Media Relations
Tel.: +32 2 515 10 71