CCS axe threatens future of coal
1 Nov 2011
The UK government has decided not to construct carbon capture and storage (CCS) facilities at the Longannet coal-fired power plant in Scotland. The decision was linked to the cost of running a pipeline from the plant to the storage areas of the North Sea, which pushed the project over its £1-billion budget.
The project consortium, comprising ScottishPower, National Grid and Shell, had completed a £20-million study into the potential of CCS at Longannet. This estimated total project Capex at £1.3-1.5 billion.
The overrun was due mainly to the work required to connect Longannet to a CO2 feeder pipeline, including tunnelling under the Firth of Forth river, instead of horizontal directional drilling as was originally proposed.
Energy and climate change secretary Chris Huhne said he will now pursue “a number of other promising project bids” for the £1-billion fund. Projects could also qualify for another £0.5 billion from an EU support fund for CCS.
But the future of most of the UK’s 19 coal-fired power stations for which CCS offers a lifeline in the face of tightening emissions regulations still hangs in the balance. These units currently generate around 28GW, about 28% of the UK’s electricity requirement.
UK policy is to start up the first CCS plant by 2015, with three others to start by 2018. Any delays in these plans will result in existing coal stations closing before CCS plants are ready to replace them, the industry has warned.
Even if all four CCS projects were at coal-fired facilities, they would cover less than 2GW of the UK’s coal-fired power. Much greater investment in CCS will, therefore, be required.
The UK’s Electricity Market Reform (see News Analysis p8) includes a carbon floor price regime that will add 30% to the price of coal by 2015, with a significant knock on effect on the price of power generation. New feed in tariffs will heap further pressure on generators, as will the Emissions Performance Standard, which favours unabated gas at the expense of coal.
Meanwhile, five UK coal stations, representing 8GW of power, are to close by 2015, having opted out of the Large Combustion Plant Directive. Moreover, from 2016, the Industrial Emissions Directive will require heavy investment in NOx reduction equipment. Only one station E.ON’s 2,000MW unit at Ratcliffe has so far been earmarked for this investment in NOx reduction technology.
