Carbon capture and storage, coal’s saviour or too little too late?

Carbon capture and storage (CCS) has been bandied about as the salvation of carbon intensive industries particularly the coal sector, which has seen its fortunes continue to dip.

So just what is CCS?

CCS involves the capture of carbon dioxide emissions and then transporting it to a suitable storage site for long-term storage deep underground, often by injection into a spent oil or gas field.

A similar process is used in enhanced oil recovery where carbon dioxide is injected into an oil field to boost oil production.

But implementing CCS into each coal-fired power station is a costly solution that their owners would undoubtedly baulk at.

So perhaps plans to turn brown coal, widely seen as the dirtiest fossil fuel for electricity generation, into hydrogen and capture the carbon emissions at this stage and inject them into storage might be a wiser option.

After all this appears to address all the issues, not only will it keep the coal industry running, it allows Australia to continue producing an export product — hydrogen — while capturing all the nasty emissions without passing the buck onto the consumer.

A pilot project at AGL’s Loy Yang facility is already chugging along to test this process.

Similar plans include the use of coal-fired plants to power the electrolysis process needed to turn water into hydrogen and oxygen. CCS will allow the carbon emissions of these plants to be captured on site.

Australia’s chief scientist Dr Alan Finkel is a proponent of this option, saying earlier this year that while some might be sceptical due to CCS being uneconomical for the electricity generation industry, capturing carbon dioxide when it is produced as part of the hydrogen production process would mean little added cost for its extraction and storage.

It is not certain if Dr Finkel is justified in his belief that CCS can be economically implemented in this instance, but the costs of doing so will have to be factored into these options.

That might well be behind BP — one of the world’s largest oil and gas producers — looking to use renewable energy for a hydrogen to ammonia export project in Geraldton, Western Australia.

The current Australian government also appears to be lending its weight to CCS after agreeing with most of the recommendations of a recent review into the Climate Solutions Fund led by former Origin Energy boss Grant King, whose appointment has been questioned by green proponents.

These include amending the legislation to “enable a method to be developed for carbon capture and storage” as well as recommendations that the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) be opened up to allow funding for projects and technologies outside renewable energy – including CCS.

Meanwhile, Norwegian state-owned energy company Equinor and its partners Total and Shell will invest almost 6.9 billion kroner ($1.06bn) in the Northern Lights CCS project, the first in Norway.

However, CCS is not without its issues.

Institute for Energy Economics and Financial Analysis (IEEFA) Australasia director of energy finance studies Tim Buckley notes that there isn’t a single unsubsidised CCS project in the world and that without a price on carbon, there is no commercial justification for fossil fuel companies to invest in CCS.

And while the concepts are known and proven, implementation can still be tricky with the CCS operations for Chevron’s giant Gorgon LNG project only starting up last year after years of delays, which the supermajor blamed on technical issues.

The IEEFA also noted that the New Mexico Public Regulation Commission recently approved two record low power purchase agreements with renewable energy producers that made life just that much more difficult for proponents by refitting the San Juan Generating Station, which already charges about twice as much as the two renewable projects, with CCS technology.

A recent study also warned that the impact of CCS on water supplies had not been widely explored.

Perhaps a measured, balanced approach might be best where combined generation parks incorporating CCS for their non-renewable generation are set up to produce hydrogen.

Clear plans would also need to be in place outlining the shift towards renewables as their cost drops and their ability to sustain continuous operations through energy storage improve.