Carbon capture: the quest for clean energy

22 February 2013

Coal accounts for a dominant share of global power generation. However, many economies, especially developed ones, are shifting towards increasing their renewable energy sources and gas power generation in order to provide cleaner power. GlobalData reports.

The total installed capacity of global coal-fired carbon capture and storage (CCS) amounted to 238MW at the end of 2011. In 2008, the 30MW Schwarze Pumpe plant came online, which uses an oxy-firing capture process. Two more pilot projects came online in the US in the same year. Following this, Australia, France, Italy, the Netherlands and Spain also completed the construction of CCS pilot projects. On the basis of the CCS demonstration projects that have already been announced globally, 10GW of capacity is expected to have come online by 2020.

Once large projects start to become operational and other countries increase their focus on CCS technology, many more projects and capacity additions are expected by 2020.

Globally, there has been a rapid increase in carbon emissions, due primarily to the increased use of fossil fuels in growing economies. This has resulted in an increase in the average global temperature, which is being accelerated by the rate of emissions. This global rise in temperature is expected to adversely affect living conditions. To address this concern, international collaboration has been discussed and sought over recent decades.

Developments have included the formation of the Kyoto Protocol, which sets targets for emission reduction from its member countries, the climate change group, and other initiatives. Global targets, aimed at reducing emissions in order to limit global warming to less than 2oC by 2050, have been adopted by around 100 economies. There has been an increased trend in the adoption of renewable energy sources to reduce dependency on fossil fuels, which will produce clean energy.

Coal accounts for a considerable portion of global power generation. However, many countries, developed ones in particular, are moving towards increasing their use of renewable energy and gas power generation to offer cleaner power. In order to reduce emissions from coal power plants and achieve the emission targets set, CCS technologies must be implemented on a large scale.

CCS is the technology of capturing carbon dioxide (CO2) before or after the combustion of fossil fuels (gas or coal), transporting it, then pumping it into underground geological formations. This process prevents large quantities of CO2 from being released into the atmosphere by securely storing it underground.

This technology has been used in the oil and gas industry for enhanced oil/gas recovery for the past few decades. However, only recently has it been viewed as a means to reduce the amount of carbon emissions released into the atmosphere. A number of economies currently depend upon coal-fired power plants, which account for a high share of carbon emissions. The adoption of CCS would mean that carbon emissions could be drastically reduced and global emission targets would be achievable.

Market drivers

According to the Intergovernmental Panel on Climate Change, CCS technology could help to reduce cumulative emissions by 15-55% by 2100 and, according to International Energy Agency (IEA) estimates, attempting to reduce emissions without employing CCS would prove around 70% more expensive than attempts made using CCS by 2050. The IEA also estimates that removing CCS as an option for reducing emissions in electricity generation would increase by over 40% the capital investment required containing the temperature to within 2°C.

Total carbon emissions increased from 25.5t billion in 2000 to 34t billion in 2011, at a rate of 3% between 2010 and 2011. Growing carbon emissions are a serious concern because they are causing an increase in temperature, leading to rising sea levels, which in turn are causing a number of adverse effects globally. Currently, there is a target to contain the temperature increase to within 2oC. Australia, China, the US and countries in the EU have set targets for mandatory energy cuts and are improving efficiency in order to curtail the increase of carbon emissions. The Kyoto Protocol was established in order to set targets and measures for countries to reduce emissions. Currently 192 countries are signed up to it.

"On the basis of the CCS demonstration projects that have already been announced globally, 10GW of capacity is expected to have come online by 2020."

CCS technology offers a solution for the reduction of carbon emissions, while enabling the continued use of fossil fuel resources. The development of this technology would ease the process of achieving lower emissions.

Overall, there are 863.9t billion of available coal worldwide as of the end of 2011. However, due to environmental concerns, a number of countries are increasing the share of power generation held by gas or renewable installed capacity, as these generation methods produce relatively clean power. In many European countries, and in North America, coal installed capacity is expected to decline.

Power generation in many countries is expected to be dominated by coal capacity, causing substantial difficulties regarding the security of fuel supply if they phase out coal-fired plants. Using CCS will result in the generation of clean power from coal-fired power plants, while making use of coal reserves.

There are a number of carbon storage sites available throughout the world. Some countries, such as the UK, the US have evaluated their potential carbon storage capacity. There is strong potential to store the carbon produced by coal-fired plants underground.

Due to the continuing rise of demand for electricity, global installed capacity is also continuously increasing. Thermal installed capacity accounts for a dominant share of the installed capacity and global thermal installed capacity is expected to grow from 3.75TW in 2012 to 4.69TW in 2020.

Coal accounts for the highest share of installed thermal capacity. As countries become more environmentally conscious, they are expected to adopt CCS in their coal-fired plants in order to reduce the emissions produced by coal-fired plants.

Market restraints

One of the key restraints for the development of CCS technology is the difference between the cost of developing and implementing CCS technologies and the revenues generated. There are no feed-in tariffs or other incentives offered for generation using CCS technology as there are for renewable energy sources. The cost avoided through the price of emission credits and other carbon taxes is not enough to offset the cost accumulated through power generation from CCS power plants. This discourages private investors from investing in this technology.

The regulatory framework used to promote and support CCS is still being formulated in many countries and does not exist in others. A small number of nations, including Canada, the UK and the US have passed CCS legislation. This covers geological surveys and other procedures required to implement CCS technology. Many are looking into research activities relating to CCS technology, and are in the process of implementing the framework required to incorporate CCS technology.

A small number of countries have studied carbon storage potential, which is essential to employ CCS technology. Demonstration of project with injected CO2 must also be conducted on a larger scale.

There are currently no large-scale CCS projects in operation and no large-scale carbon capture or carbon storage projects are yet commercially employed worldwide. As a result, there is uncertainty over the performance that can be expected of large scale CCS projects. The technical performance of large-scale integrated CCS power plant must be studied if these projects are to be developed. Furthermore, the cost of technology can only be estimated when a number of large scale projects can be studied.

There is a certain amount of potential risk associated with the underground storage of carbon and the mitigation of this risk poses a major challenge for the development of CCS technology and the growth of the market. Currently, geological formations represent potential sites for carbon storage. However, there is uncertainty regarding the security of long-term underground storage, and the risk exists that carbon dioxide might leak from storage sites into the atmosphere. Researchers are identifying various trapping mechanisms in order to reduce the risk of leakage.

Various offshore basins and aquifers around the world represent substantial storage potential. Where research is being conducted on marine sites, there are risks relating to marine pollution and the feasibility of storage under the sea bed. This cannot be determined until the research has been completed and the results are known. Japan, Norway and the UK are leading countries in terms of the work being done to determine the risks related to the storage of CO2 under the sea bed.

There is a strong focus on the development of renewable and gas installed capacities, because they are cleaner than coal-fired power generation. Most developed nations and developing countries such as Brazil, China and India are investing heavily in subsidising and supporting the growth of renewable installed capacity. Countries such as the Germany, the UK and the US have reduced their dependence on thermal installed capacity and are focused on increasing the share of installed capacity held by renewable power.
However, even among countries with increasing thermal installed capacity, gas is gaining prominence over coal. This is because gas is a much cleaner fuel than coal, and CCGT is a proven technology with higher energy efficiency than coal-fired plants.

Gas plants are increasingly viewed as a cleaner, more environmentally friendly alternative to coal-fired power generation.

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