Global learning is needed to save carbon capture and storage from being abandoned, says David Reiner of Cambridge Judge Business School.
Carbon capture and storage, which is considered by many experts as the only realistic way to dramatically reduce carbon emissions in an affordable way, has fallen out of favour with private and public sector funders. Corporations and governments worldwide, including most recently the UK, are abandoning the same technology they championed just a few years ago.
In a commentary published today (11 January) in the inaugural issue of the journal Nature Energy, David Reiner of Cambridge Judge Business School argues that now is not the time for governments to drop carbon capture and storage (CCS). Like many new technologies, it is only possible to learn what works and what doesn’t by building and testing demonstration projects at scale, and that by giving up on CCS instead of working together to develop a global ‘portfolio’ of projects, countries are turning their backs on a key part of a low-carbon future.
CCS works by separating the carbon dioxide emitted by coal and gas power plants, transporting it and then storing it underground so that the CO2 cannot escape into the atmosphere. Critically, CCS can also be used in industrial processes, such as chemical, steel or cement plants, and is often the only feasible way of reducing emissions at these facilities. While renewable forms of energy, such as solar or wind, are important to reducing emissions, until there are dramatic advances in battery technology, CCS will be essential to deliver flexible power and to build green industrial clusters.
“If we’re serious about meeting aggressive national or global emissions targets, the only way to do it affordably is with CCS,” said David Reiner, Senior Lecturer in Technology Policy and Director of the MPhil in Technology Policy Programme at Cambridge Judge, the paper’s author. “But since 2008, we’ve seen a decline in interest in CCS, which has essentially been in lock step with our declining interest in doing anything serious about climate change.”
Just days before last year’s UN climate summit in Paris, the UK government cancelled a four-year, £1 billion competition to support large-scale CCS demonstration projects. And since the financial crisis of 2008, projects in the US, Canada, Australia, Europe and elsewhere have been cancelled, although the first few large-scale integrated projects have recently begun operation. The Intergovernmental Panel on Climate Change (IPCC) says that without CCS, the costs associated with slowing global warming will double.
According to Reiner, there are several reasons that CCS seems to have fallen out of favour with both private and public sector funders. The first is cost – a single CCS demonstration plant costs in the range of $1 billion. Unlike solar or wind, which can be demonstrated at a much smaller scale, CCS can only be demonstrated at a large scale, driven by the size of commercial-scale power plants and the need to characterise the geological formations which will store the CO2.
“Scaling up any new technology is difficult, but it’s that much harder if you’re working in billion-dollar chunks,” said Reiner. “At 10 or even 100 million dollars, you will be able to find ways to fund the research and development. But being really serious about demonstrating CCS and making it work means allocating very large sums at a time when national budgets are still under stress after the global financial crisis.”
Another reason is commercial pressures and timescales. “The nature of demonstration is that you work out the kinks – you find out what works and what doesn’t, and you learn from it,” said Reiner. “It’s what’s done in science or in research and development all the time: you expect that nine of ten ideas won’t work, that nine of 10 oil wells you drill won’t turn up anything, that nine of 10 new drug candidates will fail. Whereas firms can make ample returns on a major oil discovery or a blockbuster drug to make up for the many failures along the way, that is clearly not the case for CCS, so the answer is almost certainly government funding or mandates.
“The scale of CCS and the fact that it’s at the demonstration rather than the research and development phase also means that you don’t get to play around with the technology as such – you’re essentially at the stage where, to use a gambling analogy, you’re putting all your money on red 32 or black 29. And when a certain approach turns out to be more expensive than expected, it’s easy for nay-sayers to dismiss the whole technology, rather than to consider how to learn from that failure and move forward.”
There is also the issue that before 2008 countries thought they would each be developing their own portfolios of projects and so they focused inward, rather than working together to develop a global portfolio of large-scale CCS demonstrations. In the rush to fund CCS projects between 2005 and 2009, countries assembled projects independently, and now only a handful of those projects remain.
According to Reiner, building a global portfolio, where countries learn from each other’s projects, will assist in learning through diversity and replication, ‘de-risking’ the technology and determining whether it ever emerges from the demonstration phase.
“If we’re not going to get CCS to happen, it’s hard to imagine getting the dramatic emissions reductions we need to limit global warming to two degrees – or three degrees, for that matter,” he said. “However, there’s an inherent tension in developing CCS – it is not a single technology, but a whole suite and if there are six CCS paths we can go down, it’s almost impossible to know sitting where we are now which is the right path. Somewhat ironically, we have to be willing to invest in these high-cost gambles or we will never be able to deliver an affordable, low-carbon energy system.”