| Focus on the UK
business models that will be attractive enough to keep industry in the country.
The new CCS customer base In some respects the false starts in the UK’s programme have reflected the changing nature of the CCS challenge. The UK first opened a CCS competition, with ‘up to’ £1 billion of government funding on offer, way back in 2007. At that stage investment was directed at technology for capturing the carbon dioxide from power plant emissions – pre or post combustion – for transport and disposal. The competition was cancelled in 2011. A second attempt at a competition launched the following year was cancelled in 2017, leaving two shortlisted bidders, centred around power stations in eastern Scotland (Peterhead) and Yorkshire (White Rose consortium), out of pocket. The UK’s strategy now is no longer based on the premise that CCS would be led by the electricity industry, with a fleet of coal or gas fired power stations fitted or retrofitted with carbon capture. That assumption has gone, at least in the UK and Europe. Coal fired stations are becoming rare, replaced by a mix of renewables and gas fired plant. But the latter are operating only partly on baseload.
Increasingly, a proportion of the gas plant in systems with a high proportion of renewables operate on an intermittent basis, either to fill in the supply gaps in the mix of wind, solar and hydro, or to provide inertia and other grid services. Gas plant operating hours now vary considerably, but in the UK annual running hours for some plants have been down in the 20-30% level – low enough for operators to replace some large gas turbines with fleets of small gas engines.
Running for such low hours makes it hard to justify investment in new unabated gas plant. To bring new gas plants forward, a capacity market was set up in GB a decade ago and other countries have followed suit. And the new reality of the energy market makes investment in gas fired stations equipped with CCS, at extra cost, even more difficult. No country has been able to fund a CCS-equipped gas fired power station simply on avoiding the cost of carbon dioxide emissions (set via emissions trading schemes like those of the UK or EU) and ongoing payments from a capacity market. Instead of being led – and funded – by the power sector, the UK’s new CCS strategy is based around industry that cannot reduce carbon emissions inherent in the process or
switch from gas to electricity to provide heat and energy. Those companies are faced with the cost of carbon emissions, and when in 2019 the UK raised its legislated 2050 climate target from 80% carbon reduction to net zero emissions, it was clear they would require carbon capture. Now, although the power sector will remain a key user of CCS infrastructure, the UK’s strategy is based around emissions from a suite of major industries. Such industries are typically sited together in regions with access to transport, water and energy infrastructure and the UK has followed other countries in encouraging industry to self-organise in ‘clusters’ that can share pipelines and have access to storage sites offshore.
The UK government’s new target is to capture and store 20-30 Mt of carbon dioxide per year from these clusters by 2030 and it has pledged to invest £20 billion to do that. It has consulted on business models for all the steps in the value chain, from capture to transport and storage. In contrast to other countries it aims to build a competitive market for both capture and storage, while the pipeline will be operated as a monopoly regulated asset in a similar way to gas and electricity networks. It has also announced support for the first four industrial clusters,
Teesside including Alpek, Ensus, MGT, Anglo American, NSMP and Venator are exploring the potential to use the infrastructure. Meanwhile a second group of projects around the Humber estuary, around 100 km to the south, may take advantage of the store with a second transport pipeline. That includes the huge Drax power station (although Drax Power said it had an alternative potential disposal route via the Viking cluster, see below), three gas power stations (Keadby 3,
C.Gen Killinghome and VPI Humber Zero), two blue hydrogen projects (H2H Saltend and Uniper Humber Blue Hub) and a half-dozen industrial sites including two fuel refineries.
• HyNet
HyNet aims to reduce industrial carbon dioxide emissions by 10 Mt annually by the mid 2030s. In this cluster Eni will gather, transport and store emissions from industrial and power sites in the Northwest of England and North Wales to its depleted gas reservoirs in Liverpool Bay. (Eni is also planning a second UK CCS hub, the Bacton Energy Hub, to decarbonise the Thames Estuary region. It has been granted a licence to store carbon dioxide in the depleted Hewett gas field in the Southern North Sea but the project is not among the current supported clusters.) In the Heads of Terms, five HyNet partners were announced
by government. They are Hanson Cement (Hanson Padeswood Cement Works carbon capture and storage project in North Wales, which aims to capture 800 kt of carbon dioxide annually, Viridor’s Runcorn Industrial CCS project (which aims to capture 900 kt of carbon dioxide annually from its energy from waste plant), Encyclis (which is developing plans for a CCS plant at its energy from waste at the Protos energy innovation hub in Cheshire), Tarmac’s Buxton Lime Net Zero (which aims to use CCS to capture and store up to 20 kt annually of process carbon dioxide produced during the manufacture of lime) and Vertex Hydrogen (a joint venture between Essar Oil UK and Progressive Energy which will use Johnson Matthey’s LCH SMR technology
to produce hydrogen at the Stanlow Manufacturing Complex in Ellesmere Port).
In addition, HyNet hopes that producing 1 GW of hydrogen locally will allow industry to move away from high-carbon fuels. Potential hydrogen customers include companies such as Heinz, Kellogg’s, Encirc, ESB, Essar, Novelis, Tata Chemicals and Pilkington Glass.
The UK CCS clusters, ‘Track 2’ (the second wave) In July 2023, it was announced that the Scottish cluster and the Viking cluster, in the Humber, would move forward to the next stage of deployment as ‘Track 2 clusters.’ It was also announced that the Acorn and Viking transport and storage systems, due to their maturity, remain best placed to deliver government objectives for Track 2 at this stage. The government has started initial engagement with the Acorn and Viking T&S systems, and in early 2024 was planning to ask for plans for an ‘anchor phase’ of initial capture projects provisionally targeting deployment from 2028-2029, and a provisional cluster expansion plan. Acorn transport and storage is a joint venture of Storegga, Shell UK, Harbour Energy and North Sea Midstream Partners. Viking T&S is Harbour Energy (with non-operator partner bp). It built and operated an onshore terminal and offshore pipeline infrastructure for the Viking gas field, 140 km out in the southern North Sea and plans to repurpose it, together with depleted reservoirs in the Viking field. The Scottish cluster is a group of industrial, power and hydrogen businesses in the Central Belt and North-East Scotland, including SSE, INEOS and ExxonMobil. The Viking cluster plans to store 10 Mt of carbon dioxide per
year by 2030. The first phase of the project is a consortium between Phillips 66 Limited and VPI Immingham LLP and aims to remove up to 3.8 Mt of CO2
from the Immingham industrial area every year by around 2027.
www.modernpowersystems.com | May 2024 | 13
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