The UK Government’s Approach to CCR and Regulation of CCS

IZEC Symposium 2009Tokyo, 19 November 2009

Bronwen Northmore

Head Cleaner Fossil Fuels Policy

Department of Energy and Climate Change

AGENDA

CARBON CAPTURE READINESS

OTHER ASPECTS OF REGULATION OF CCS IN UK

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DIFFICULT TO DEFINE CCR …..

Could be:

Very broad policy approach, eg preparing a country for CCS

Or

Project specific

UK takes project approach, assumes CCR is site specific

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WHY CCR? (1)

• UK requires significant new investment in electricity generation over next decade

• Fossil fuels – coal and gas – likely to remain important for security of supply and to back up intermittent renewable generation, particularly wind

• UK has set legal objective to reduce CO2 emissions by 80% by 2050, and established interim targets

• Meeting this target will require decarbonisation of electricity by 2050 –which means CCS on fossil generation

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WHY CCR? (2)

Purpose of CCR is to design combustion power stations to allow retrofitting of CCS once CCS technologies have been proven.

It is a way to address the practical issues that will enable CCSfacilities to be installed at a later date.

Without retrofit of CC, stations constructed now will continue to emit CO2 unabated for the lifetime of the plant – 40 years or more –described as “carbon lock-in”.

By facilitating retrofit of CCS, CCR helps to avoid “carbon lock-in”and is therefore valuable preliminary step towards CCS.

Government expects CCS retrofit on new coal plant by 20254

THE STORY SO FAR (1)

UK approach built on IEA Greenhouse Gas Programme study (“CO2 Capture Ready Plants”, May 2007)

Developed in parallel with discussions on EU Directive on the Geological Storage of Carbon Dioxide

Consultation on draft CCR provisions in EU Directive (“Towards Carbon Capture and Storage”, June 2008)

UK Government response April 2009

Consultation on guidance on CCR (“Guidance on Carbon Capture Readiness and Applications under Section 36 of the Electricity Act 1989”, April 2009)

UK Government response 9 November 20095

THE STORY SO FAR (2)

Early industry recognition of need for CCR

Recent gas generation plants voluntarily set aside sufficient space to retrofit CCS before CCR became mandatory

Source: Ecoworldly.com

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CCR IN UK (1)

Incorporates the requirements of the EU Directive but goes further

Since April 2009 CCR mandatory for all new large combustion power stations at or over 300MWe: biomass, coal, gas, oil and CHP

Kingsnorth Power Station - UK

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CCR IN UK (2)

CCR requirements are implemented through the consent process for a new power station

Applicants for consent are required to demonstrate:sufficient space is available on or near the site to accommodate carbon capture equipment in the futuretechnical feasibility of retrofitting their chosen carbon capture technologysuitable area of deep geological storage offshore exists for the storage of captured CO2 from the proposed power stationtechnical feasibility of transporting captured CO2 to the storage arealikelihood that it will be economically feasible within life of power station to link it to full CCS chain

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CCR IN UK (3)

If proposals involve use of hazardous substances, applicants may be required to apply for Hazardous Substances Consent.

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CCR IN UK (4)

If consent is granted operators of the power station will be required to:

Retain control over sufficient space for carbon capture equipment

Submit reports on whether it remains technically feasible to retrofit CCS to the power station every 2 years

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HOW MUCH SPACE? (1)

Indicative guidance from IEA GHG “CO2 capture as a factor in power station investment decisions”, 2006

USCPF with post-comb

capture

IGCC with capture

USCPF with oxy-combustion

Site dimensions Generation eqpt m

400 x 400 400 x 400

Site dimensions CO2 capture m

127 x 75 475 x 375 80 x 120

Total plant footprint m2 170,000 180,000 170,000

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HOW MUCH SPACE? (2)

It is the responsibility of the applicant to demonstrate in their consent application that sufficient space is available.

The site plans should be sufficiently detailed to show:

Footprint of combustion plantLocation of capture plant including any air separation unitsLocation of CO2 compressor equipmentLocation of any chemical storage facilitiesExit point for CO2 pipelines from site

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TECHNICAL FEASIBILITY OF RETROFITTING CARBON CAPTURE EQUIPMENT

Assessed by Environment Agency

Likely to take the form of a written report which identifies capture technology and demonstrates there are currently no known technical barriers to subsequent CCS retrofit

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STORAGE

Only offshore storage

Identification of possible storage area including identifying 2 oil or gas/gas condensate fields or saline aquifers listed as “viable” or “realistic” for CO2 storage

Data source for these areas

Short summary including storage requirements and potential of selected area

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TRANSPORT

Marked up map showing proposed route corridors and written report detailing any major pre-existing obstacles to CO2 transport within a 10km radius of the station.

Allows the degree of flexibility that may exist over the eventual pipeline route to be ascertained.

Up to 1 km wide route corridor for first 10 km off the site

Thereafter up to 10 km broad corridor for pipeline route

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ECONOMIC FEASIBILITY OF CCS

Single economic assessment covering retrofitting of capture, CO2 transport and CO2 storage

Recognise that this will entail wide range of assumptions with inherent uncertainties

One method would be to calculate lifetime price of electricity against a range of carbon prices

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POLICY IS INTENDED TO BE LIGHT TOUCH

Recognise that technology may have moved on by the time retrofit is implemented, need to keep options open

Cost of implementing CCR is low:

Approx £1 – 1.7m per power station £20m in total over 10 years for 10-14 GW of capacity

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LINK TO GUIDANCE

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www.decc.gov.uk/consultations

Guidance on Carbon Capture Readiness and Applications under Section 36 of the Electricity Act 1989

Other aspects of CCS Regulation in UK

A FRAMEWORK FOR DEVELOPMENT OF CLEAN COAL (1): POLICY ANNOUNCEMENT 9 NOVEMBER 2009

Regulatory and financial framework to enable UK transition to coal with CCS

Key policies outlined within the framework are:Regulatory requirement for any new coal power station to demonstrate full

CCS chain at commercial scale (300MW net) ie no new coal without CCSProgramme of up to four commercial-scale CCS demonstrationsFunding for demonstrations by a new CCS incentive, with an extension of

the incentive to fund, if necessary, the retrofit of the balance of the plant (which will already be CCR)

Ambition for any new coal plant built today to be expected to retrofit CCS by 2025

Ambition for any new coal plant constructed from 2020 to be fully CCS from day one

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A FRAMEWORK FOR DEVELOPMENT OF CLEAN COAL (2)

New policy framework designed to contribute to:

Decarbonisation of power sector in UKUK’s climate change goal to reduce CO2 emissions by 80% by 2050

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A FRAMEWORK FOR DEVELOPMENT OF CLEAN COAL (3)

Objectives of new policy framework:-

Advance the global development of CCS technology to accelerate the development of CCS with ambition for wider deployment by 2020 Improve the affordability of CCS investment. By investing in CCSdemonstration now we expect to reduce significantly the cost of CCS in 2020sDeliver a diverse and secure low carbon energy mix in the UK to enable coal to continue to play a role in our energy security as we make progress towards our target to reduce UK emissions by 80% by 2050.Help create jobs and economic opportunities for UK-based businesses in a new industrial sector.

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CO2 STORAGE (1)

UK established legal powers to permit storage of carbon dioxide offshore during 2008.

EU Directive set out further detail in April 2009.

Now working up detailed arrangements that will provide guidance to applicants. They will require both a lease for the storage space and a licence to inject CO2

Expect to be in a position to consider requests for storage licences in April 2010.

UK legislation also gave The Crown the right to store carbon dioxide offshore. Leases will be issued on commercial terms.

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CO2 STORAGE (2)

Preliminary identification of potential storage areas in 2007. More detailed assessment to be completed March 2011.

No plans to permit storage onshore.

Government will accept long-term responsibility for stored carbon dioxide once the site has closed, the facilities have been decommissioned and available evidence indicates permanent containment.

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