According to the International Energy Agency (IEA), 70% of the energy used between now and 2050 will originate from fossil fuels, and CCS could contribute to cutting carbon dioxide (CO2) by 20% in order to meet reduction targets needed by 2050. Yet to meet the IEA’s forecast, it would take additional 3,000 plants to be constructed by industry, along with underlying support needed from both private investors and government.
CCS works by taking emissions and separating out the CO2 through solutions of amines, and then storing the gases underground once it has been separated out from the other medley of emissions. There are other methods of carbon capture through gasification and oxy-combustion that require little treatment before burial, but consume a significant amount of energy.
In short form, the ability for the market for CCS to grow will require making the technology less expensive. The fact that there is no restriction on CO2 emissions, or that carbon prices as part of existing carbon mitigation policy schemes in many jurisdictions is too low – with no sign that the price will rise is not helping to push for investment in emissions reduction.
In the UK, the Chancellor George Osborne announced in the 2011 budget that a carbon price floor would be introduced from April 2013, “to provide support and certainty to the price of carbon” and “encourage investment in low-carbon electricity generation”.
Yet if recent events in Canada are any warning, the need for strong government regulation for CO2 pricing along with development of CCS technology is essential as R&D may not seem viable otherwise. Recently, investors pulled out from a TransAlta CDN $1.4 billion CCS project called Pioneer in the province of Alberta that was also set to receive CDN $778.8 million in federal and provincial subsidies. Upon the announcement, the vice-president of policy and sustainability for TransAlta, Don Wharton, stated what is really required is a regulatory framework that puts a significant value on the price of CO2.
Three other projects in Alberta with future support from federal and provincial governments are also awaiting final investment decisions this year. They too could befall the same fate as Pioneer. In remains to be seen whether the IEA’s ambitious forecast will be met, while plants like Mongstad attempt to develop new cheaper methods for CCS testing and storage.
