CCS Cost Reduction - Final Report

A week or so ago the CCS Cost Reduction Task Force published its final report. To those of you who have been following the work of this group the overall findings will have a familiar ring - particularly the reaffirmation that CCS can become cost  competitive with other low CO2 generation technologies with levelised costs approaching £100/MWh (real 2012 monies) by the early 2020s. Indeed, the report itself states "The contents of the Interim Report of the CRTF remain largely unchanged".

The report lays out 7 key next steps which are worth repeating:
1) Ensure optimal UK CCS transport and storage network configuration;
2) Incentivise CO2 EOR to limit emissions and maximise UK hydrocarbon production;
3) Ensure funding mechanisms are fit-for-purpose;
4) Create bankable contracts;
5) Create a vision for development of CCS Projects in the UK from follow-on projects through to widespread adoption;
6) Promote characterisation of CO2 storage locations to create maximum benefit from the UK storage resource;
7) Create policy and financing regimes for CCS from industrial CO2.

You could be forgiven if your first reaction is that this is all motherhood and apple pie but actually I think this illustrates a very important point - we are still in the very early stages of developing this industry and there are some big, fundamental issues still to be resolved.

For instance, consider transportation network configuration. Optimising this (or getting as near as possible to an optimum position) is a vital element of cost reduction. However, as with any network, there are all the issues that arise from the possibility of monopolistic action, and the problem of making "over-sized" transport systems (i.e. to some extent future-proofed) bankable.

I had to smile (wryly) at key step 2, having been on the margins of a project proposing an EOR element. As is well known, in its competition DECC selected 2 projects to take forward to FEED and potentially full development neither of which will enable EOR.

Step 6 is also an interesting one. Many storage locations, especially those that might be candidates for EOR are licenced to private organisations. How these organisations are incentivised to characterise their holdings for CCS potential is quite a question. I shall follow this aspect with interest.

The Task Force will now disband but it recommends the establishment of three "national leadership groups" to take forward its recommendations:
1) A UK CO2 Storage Development Group;
2) A UK CCS Commercial Development Group;
3) A UK CCS Knowledge Transfer Network.

As well as the 7 key steps noted above the report outlines a further 26 supporting steps. I sha'n't go into detail here - suffice it to say that many of the headings begin with "Ensure" or "Facilitate" or "Continue". 'Tis quite a read.