EURELECTRIC conference explores how to make CCS a success story

07 December 2007

If power generation companies are going to invest in carbon capture and storage, then "CCS must go hand-in-hand with efficiency improvements" emphasised Johannes Heithoff of German-based RWE Power. The key issue identified by Dr Heithoff ahead of the concluding panel at the EURELECTRIC conference on Carbon Capture and Storage on November 29 is the amount needed to be invested in CCS over and above what would be invested in alternative carbon abatement technologies. The industry is prepared to make substantial investment in order to make CCS happen, but "would appreciate the financial support of the EU". About two thirds of the audience agreed with the conclusion that it was not realistic to expect demonstration projects to happen without some degree of state support.

Stephan Singer of environmental organisation WWF designated CCS as a "necessary evil" for the coming era as it is vital to ensure global emissions of greenhouse gases peak and decline within the next ten to fifteen years, and CCS has a role to play in achieving this. However, we must do more to move to a low-carbon economy as soon as possible, he stressed, pointing to the transport sector, which should, he said, become CO2-free through electrification. Arguing that many power-generation options based on renewable energies can be cheaper than the expected cost of CCS, Mr Singer urged the industry to "get real on costs". At the same time he wanted to see companies investing more of their own money in the technologies rather than asking for public funding. He also insisted that mandatory CCS retrofit must become part of the regulatory framework for coal-fired power plants, for "if the maximum 2°C global warming of the atmosphere is to be achieved, coal without CCS is a non-option".

Bill Kyte, the Chairman of EURELECTRIC's Committee on Environment & Sustainable Development, moderating the panel discussion, saw a bright future for electricity, which "can be the fuel of the future, if decarbonised". Invited to identify the single greatest challenge for CCS, the majority of the panellists pointed first to the battle to win public acceptance of CO2 storage and transport infrastructure, and secondly to the need for a robust, long-term framework leading to adequate carbon prices.

Addressing the option of using part of the revenues from auctioning of the Emissions Trading Scheme allowances to co-finance CCS demonstration projects, Mihai Tomescu of the European Commission's Directorate-General for Environment said this would probably be acceptable under EU state aid rules, a formal communication on which is due to appear in January as part of the awaited "green package". Mr Singer preferred to see the cap on emissions set tight enough to ensure a carbon price that would make CCS competitive, instead of the state-aid route, as the public "looks carefully at where its money goes". According to Dr Heithoff, this "breakeven price" would be somewhere between €40 and 60/tCO2. Radek Gnutek of Netherlands-based NUON agreed that CCS will have to become viable in the market in the long-run, but saw demonstration as "different, with significant risks" which need to be mitigated.

Dr Kyte then asked the panellists to assess how the deployment of CCS technologies would affect the competitiveness of the European economy in the global arena. Mr Gnutek agreed with Andy Kelly from Centrica Energy that a "low-carbon future has its price" and acknowledged that "leadership does cost, but we have to pay the price". Mr Kelly suggested that if any protection was deemed necessary for some energy-intensive industry, it be done outside the carbon market mechanisms. Mr Tomescu rather saw the key to the competitiveness challenge in how Europe manages to engage others - he believed that if Europe develops good technologies and successfully demonstrates them, it will be easier to persuade major emitters to implement those technologies. Thomas Schneider of the Commission proposed "extra tariffs" on products from countries that are unwilling to take action. However, Mr Singer accused the energy-intensive industry of "crying wolf" regarding high energy prices while refusing to disclose relevant data as to how their businesses were being affected.

Finally, Dr Kyte asked the panel to give brief advice to the industry on how to achieve public acceptance. Messrs. Kelly, Gnutek and Heithoff said that transparent debate, open explanation and convincingly sound science will do the job. Mr Schneider called on the industry to engage with NGOs as the public is more likely to believe them rather than industry or politicians. Mr Singer also called for a constructive debate, transparency, safe geological storage and independent monitoring.

Closing the debate, the overwhelming majority of the audience expressed the belief that if the conference re-gathers in one year, it will be able to discuss a couple of ongoing concrete projects under construction in Europe.


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