Carbon capture and storage technology as an emissions reduction strategy is like slapping a band-aid over the fossil fuels industry – a last ditch attempt to keep coal-fired generation alive.
The debate around carbon capture and storage as a means to reduce carbon emissions has been reignited with its support promoted as a centrepiece of the federal government’s recent Technology Investment Roadmap discussion paper.
The King Review on the source of lowest cost abatement has also recommended funding for CCS be included in the scope to receive funding from the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC). This has also, in principle, been endorsed by the federal government.
But does CCS truly stack up from an economical, technical and environmental perspective? And, how does it compare with already scalable clean large-scale energy generation sources such as wind and solar?
CCS is not cheap
The total costs of CCS are a double whammy, made up of the combined costs of building and operating the CCS technology and the generation source, such as coal or gas.
Coal is already one of the most expensive sources of large-scale energy generation. Lazard’s latest global analysis finds that the short-run marginal costs (operating costs) of coal are $26 to $44 a MW/h. This directly impacts consumers, with analysis from AEMO and Aurora attributing higher short-run marginal costs of coal-fired generation to driving up wholesale prices of electricity.
Long term, coal still comes out as the most expensive source of energy generation. In the same report, Lazard’s modelling showed that the long-run marginal costs (or, levelised cost of energy) of utility-scale solar PV and wind are $32-44/MWh and $28-54/MWh, respectively. Conversely, recent estimates show that coal (without CCS) has a low-end cost of $66/MWh.
Including carbon capture and compression nearly doubles the cost to $152MW/h. Significantly, the cost modelling does not take into account the additional costs for carbon dioxide transport and storage or the ongoing costs of regulatory licensing, monitoring and compliance.
The cost of CCS alone debunks any economic argument for CCS as a clean technology alternative. Without market mechanisms to incentivise (or subsidise) emissions reduction from energy generation, a generation process with CCS will always be more expensive than one without CCS. And, where wind and solar, alone, come out as cheaper forms of large-scale power generation in both the short and long term, there is no economic case for processes dependent on CCS.
Drinking the CCS KoolAid
CCS has failed for decades on the diffusion of innovation. From 1998 to 2017, only about 200,000 tons of CO2 had been captured and sequestered at a cost of over A$1 billion. The cost per ton sequestered was an absurd A$4300, with the Australian government footing 70 per cent of the bill. If these pilot projects have failed to prove the technology, why should we give it another go?
Federal Minister for Energy and Emissions Reduction, Angus Taylor is behind the latest reinvigoration of CCS technology into Australia’s emission reduction policy. The Minister believes that “the techniques behind carbon capture and storage have been used for decades” and cites the Chevron Gorgon CCS project as an example of CCS “actually working”.
It’s an odd choice for the federal government to champion Chevron’s project as the CCS poster child, as it has been an unquestionable failure.
The project aimed to capture emissions from the Gorgon liquefied natural gas (LNG) plant in northern Western Australia, but it only started operations in 2019 after a three year delay, despite Chevron operating the LNG trains since 2016.
Both the WA Environmental Protection Authority and the Department of Water and Environmental Regulation are holding Chevron liable for these emissions that are equal to more than half the emissions increase for Australia in 2018-19, which would come at a remediation cost of up to $200 million. Even today, the plant is not operating at full capacity.
The Australian government already contributed $60 million to the capital costs of Chevron’s project through its Low Emission Technology Development Fund. With this track record, any future government supported CCS projects must be subject to greater diligence and accountability, particularly when the risk to Australia’s already tight carbon budget is at stake. It is no surprise that fossil fuel heavyweights like BP, Shell, and Santos are pushing for CCS to justify continued emissions – and “greenwash” their low emissions future.
CCS is risky for the planet
The economic and technical case for CCS doesn’t stack up, however, some argue that CCS offers potential environmental benefits. But could CCS create more risk than benefit to the planet?
CCS is not a risk-free operation. It is so energy intensive that a power plant with CCS will burn 15-25 per cent more fuel than a conventional plant.
Transporting and handling of carbon dioxide offers unique risks, as the by necessity may be far from the source of generation. The transport of any dangerous good can impact human and ecological communities. Unlike the gases we most often transport, CO2 is heavier than air and can accumulate in dangerous concentrations in low lying areas.
Carbon dioxide leaks are of concern, particularly given that there have been no long term examples of CCS in action. Leaks can migrate through to aquifers and contaminate fresh water supplies. The CO2 acidifies fresh water and eventually weathers the geology resulting in further water contamination with metals and earths including manganese, barium and uranium amongst others.
Ultimately, it’s just a band-aid solution
There is no way around the facts – CCS technology as an emissions reduction strategy is like slapping a band-aid over the fossil fuels industry, as a last ditch attempt to keep coal-fired generation alive.
The advent for CCS is a red-herring and a sly political manoeuvre: by presenting a so-called “solution” to the carbon emissions of the coal industry and detracting from solutions that are more economical, technologically sound and environmentally sustainable.
The Technology Investment Roadmap is a perfect example of this, with the federal government intending to commit part of its $2.5 billion emissions reduction scheme to CCS technologies. In pumping taxpayer money into CCS technologies, we are diverting government spending from investment in reliable, proven, cost-effective and clean technologies such as wind, solar and green hydrogen.
This has further ripple effects on industry. For example, $50 million of government funding was allocated to support the Kawasaki hydrogen project to produce hydrogen from coal with CCS technologies (aka brown hydrogen).
Further highlighting the economic cost of CCS, the total project cost came to $500 million to produce a measly three tonnes of hydrogen (making up just 0.0000043 per cent of current global hydrogen production).
Rather than focusing on coal-derived hydrogen, investment should support the many green hydrogen projects which are already being proposed around Australia.
It is important to see CCS for what it is – a desperate attempt to maintain the status quo.
Propagated by those with vested interests in the fossil fuels industry, the revival of CCS technologies as a key player in the climate war arena is a costly approach to emissions reduction. With large-scale solar and wind generation coming out as winners from an economical, technical and environmental perspective, we truly wonder what rationale is behind the current government’s celebration of CCS technologies.
Gina Zheng and Rynhardt Grove are part of Bright Sparks Australia, a community for engaged, motivated and passionate young people working in clean energy across Australia.
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