CCS works but the economics do not appear to stack up at present. Vattenfall

According to the International Energy Agency, the world will need 100 carbon capture and storage (CCS) plants by 2020 and 3400 by 2050 in order to reduce greenhouse gas emissions by half. That equates to building a CCS plant every three days from 2020. At present, however, there is not a single large-scale CCS facility at a power station anywhere in the world.

While renewables continue to receive generous state subsidy, CCS is in danger of becoming the forgotten weapon in the war on carbon, the rusty spanner in the climate change toolbox, as an increasing number of projects are spiked or scaled back.

Last month in the US, American Electric Power (AEP) postponed Phase II of a commercial-scale deployment of Alstom’s chilled ammonia carbon capture process at its Mountaineer coal plant in New Haven, West Virginia. This was particularly frustrating to the CCS industry as in June Alstom and AEP had successfully validated Phase I, which captured up to 90 per cent of the CO2 from a slipstream of flue gas equivalent to 20 MW, injecting it into geologic formations for permanent storage 1.5 miles below the surface.

Mountaineer II would have captured at least 90 per cent of the CO2 from 235 MW of the plant’s 1300 MW capacity, but as a regulated utility, AEP needs regulatory approval to recover its share of the costs without federal requirements to reduce greenhouse gas emissions already in place. This uncertainty also makes it difficult to attract partners to help fund the industry’s share, says AEP.

This is symbolic of the state of play with CCS. There have been numerous successful small-scale demonstration projects like Mountaineer I, mostly funded by the state, but large-scale CCS needs serious cash. And in the long-term, it can only come from the private sector. Unfortunately, profitable CCS plants appear to be a long way off.

Alstom’s Senior Vice President for Power and Environment Policies Joan MacNaughton says the cost of electricity generated by coal and gas plants with CCS is competitive with other low or no-carbon energy sources, such as wind, solar, geothermal, hydro and nuclear. That may be so in the future, with a high carbon price, but in the here and now, CCS looks very expensive.

Vattenfall’s 500 MW demonstration project at Jaenschwalde, Germany, which will utilize a new 250 MW Oxyfuel boiler and see another 250 MW boiler retrofitted with a post-combustion capture unit, will cost an estimated €1.5 billion. In comparison, the recently Alstom-built CCGT in Langage, UK, with a capacity of 885 MW, cost just €460 million.

Alstom believes, just like with NOx, SOx and particulates, that carbon capture will become just another cost of generating power, as standards and regulations dictate, in order to do business. If the IEA’s scenario of 3400 CCS plants by 2050 is to be anywhere close to being achieved then the costs need to come down rapidly. And costs will only tumble when governments force utilities to build CCS not just for new coal plant, but, crucially, for new gas plant too.