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January 1, 2010

Coal 2.0?

Will 'clean' coal power dominate the UK's burgeoning green tech economy?

Carbon-LARGE

As scientists and now our political leaders insist we ‘go green’ to save the planet, you’d think that coal, the filthiest of all fossil fuels, would naturally be condemned as a relic of the industrial revolution – after all, extracting and burning the black stuff to produce electricity is responsible for nearly a tenth of the world’s total carbon emissions. So why are countries all over the world, including these fair isles, ready to carry coal into the 21st Century to power our energy future? It’s because they think they’ve found the solution to the problem of coal: Carbon Capture and Sequestration (CCS).

CCS is actually an umbrella term for a number of complex processes all designed to ‘clean coal’. This can involve chemically washing coal or turning it into a gas before removing minerals and impurities, or chemicals can be used in the flue (big chimney stack) of a power plant to separate the carbon dioxide. Whatever the method, the result is the same – electricity from coal with fewer harmful emissions. The separated CO2 can then be transported through pipes or in containers and pumped into old oil wells or deep under the ocean floor where it can’t leak into the atmosphere and heat our planet. This process transforms the most damaging fuel into one of the cleanest.

There’s certainly no doubt that the world needs to tackle emissions from coal, and soon. The United States produces half of its electricity burning coal and China a staggering 80%; it’s no coincidence that they are the world’s two biggest polluters. Coal is abundant and relatively cheap to extract and as a result the Independent Energy Agency predict a heavy rise in coal use over the next twenty years – China is building new coal-fired power plants at a rate of two a week. The problem of emissions will only get worse unless coal can be cleaned up.

But, whilst the energy production of the United States and China is alarming, it doesn’t explain why Britain is pursuing a ‘clean coal’ future. Having announced a CCS competition in 2007, with a potential prize of £1 billion to fully-fund a demonstration CCS plant, Gordon Brown went further in his latest, and probably final, energy bill by including a fund of £9.5 billion (levied from our electricity bills) to encourage CCS in the UK.

Although coal has long been marginalised on these shores in favour of cheaper and cleaner gas, there hasn’t been a new coal-fired power station built here for thirty years. Why return to the dark arts of coal energy now?

David Kidney, Parliamentary Undersecretary of State for the Department of Energy and Climate Change (DECC) tells me that aside from being in the international community’s best interests, “Virtually all of the expert advice available suggests that CCS will be necessary as an option for electricity generation if carbon dioxide emission targets are to be met.” So the Government insists it’s acting on advice, no doubt from the energy corporations like Scottish Power and E.On who are leading the drive for CCS in the UK.

Jonathan Smith, E.On’s Media Relations Manager, told me that to ensure the lights stay on we will need some coal energy. With gas and oil prices becoming increasingly volatile the UK is aiming for a third of its electricity to come from renewables by 2020 and Labour recently announced plans for 10 new nuclear power stations. But, there’s still a problem when the wind doesn’t blow and what to do if the substantial investment for 10 nuclear plants fails to materialise, which is where CCS comes in to play; “It’s not about putting all of our eggs into a coal basket… our aim is to ensure we provide cleaner and more secure energy supplies,” Smith tells me.

Let’s not kid ourselves though, companies like E.On are not only concerned about securing a clean energy future for the UK, and Smith revealed an ulterior motive: “There’s undoubtedly money to be made from clean coal, if it was perfected by (E.On) then clearly we would be the experts in CCS.”

But it’s not just the energy companies who could profit either, and the scale of CCS could mean new opportunities for the UK economy. Jeff Hardy, from the UK Energy Research Centre, explains: “The supply chain to deliver [CCS] is a very broad one… there will be opportunities for all players, large and small, [in] engineering, chemical, oil and gas companies, compression specialists, gas and fluid specialists, pipeline companies and research expertise.” AEA, an independent energy research group, submitted a report to the DECC in December last year stating that the UK could benefit by £1 billion to £2 billion a year from CCS and other capture technologies from now until 2030, with CCS creating nearly 30,000 jobs in the process. New business and possibly new jobs is the kind of positive economic news the Government has been desperate to hear since last year.

So, it appears CCS solves the problem of coal. We can reduce emissions, provide everyone with enough electricity and create new jobs and business as well; great, let’s all go home and sit in front of a roaring (coal) fire.

Of course, it isn’t that simple. Joss Garman, nemesis to the aviation industry and now a Greenpeace spokesperson, has a very different view; “‘Clean coal’ doesn’t exist. CCS technology is often presented as a silver bullet to the problem of emissions from fossil fuel plants. Yet CCS has never been proven at a commercial scale anywhere in the world.”

The Government launched a CCS competition in 2007 offering full-funding for a 300MW clean coal plant by 2014 to encourage development; the idea being that as technology and efficiency improve, CCS will be commercially viable by 2020. They have tried to allay environmental fears by insisting that any new coal plants must be built ‘capture ready’ with at least a quarter of emissions captured from day one. This isn’t enough for most environmental groups, who claim that the Government’s plans are too not strict enough. Martin Cullen from Friends of the Earth says: “Proposals to approve new coal stations that are ‘capture ready’ are a dangerous distraction. The emissions from new coal plants would lock the UK into a high carbon pathway for many decades.”

The Government’s position wasn’t helped when Stuart Haszeldine, a geologist at Edinburgh University and a leader in carbon capture research, said the CCS competition was “dead on its feet.” Two of four original competitors have quit; BP pulled out of the competition last November because it couldn’t find a ‘power generator’ to partner with, whilst RWE npower cited ‘timetabling’ problems ruling them out of the race. Of the remaining two competitors, E.On’s controversial Kingsnorth plans have been fiercely challenged by environmental groups since day one, halting any meaningful progress. The aforementioned £9.5 billion levy announced a few days after Haszeldine’s outburst was designed to allay fears and reignite the UK’s CCS investment – but if the 2014 target for a working plant is missed, it’s unlikely that CCS will be considered ‘viable’ by anyone come 2020. Only Scottish Power’s Longannet bid is currently still in the competition; the episode shows how prohibitively expensive CCS infrastructure can be.

A 200MW clean coal plant in Tianjin, China is due to be completed next year at the cost of US $1 billion – a standard coal plant of 800MW, producing four times the energy, only costs around $1.4 billion. It’s not just building expenses either; because of the energy intensive ‘cleaning’ processes, CCS plants use more coal to produce the same amount of energy as their dirty counterparts. E.On estimates that even with a carbon tax of €40 per tonne, like that of Norway (the highest in Europe), CCS would still be more expensive than nuclear power and only slightly cheaper than onshore wind power. ‘Clean coal’ requires large corporate and state investment to become a reality and, as BP found, finding partners wealthy enough to support you isn’t easy.

And with no plans for a UK carbon tax, prepare to shell out a few more pennies for your energy bills: “The costs will be passed on to consumers. A low-carbon energy system is not a cheap energy system in the short-term, but it’s cheaper in the long term when the costs of climate change are built in”, Hardy explains.

The business opportunities for ‘all players large and small’ might be some way off too, despite the fact that CCS will rely on collaboration between industries. Let’s take Scottish Power’s partnerships for example: they fund CCS research at Edinburgh University and are trying to secure a similar relationship with Imperial College in London which is great from an academic perspective but does little in the short-term for the economy. Its consortium partners for the Longannet bid include Shell, National Grid and the Norwegian-based engineering firm, Aker Clean Carbon. These companies are global leaders and none could be described as ‘small’ players. Yet, these corporate powerhouses still need financial backing to make CCS a reality. The new jobs and economic benefits of CCS promised in the AEA report, rely on the UK being a leader in the field and doing it quickly – which will mean more pressure on our wallets for some time yet. Environmentalists say that subsidies and investment would be better spent on developing proven renewable technologies and could also provide new jobs and industry immediately – the recently unemployed workers from Vestas would probably agree with them.

With Britain committed to a carbon captured future, environmentalists have asked, what happens if the new coal fired power plants fail to meet expectations and never live up to the ‘clean coal’ billing? You can’t simply turn the power station off if CCS turns out to be an expensive mistake. David Kidney told me that there were various contingency plans being considered including an annual cap on emissions or running coal plants for a limited number of hours but went on to add that “[these] measures should be determined following an independent review to be completed by 2020.” Or, a problem to be dealt with by the next Government.

Everyone, including environmental groups, recognises the need to tackle the problem of dirty coal. Aside from the potential environmental benefits CCS carries the prospect of employment and could invigorate the UK’s burgeoning Greentech economy. For others, including our electricity producers, the issue is more prosaic; without coal we won’t keep the lights on. But, there are a lot of uncertainties; not least that nobody knows how successful ‘clean coal’ will be, or how quickly it will become cost-effective. The Government has sided with the prospect of economic benefits in the long term and has wrapped it up in a need for a global solution for coal as soon as possible. With nearly £10 billion of our money invested in the experiment already, and time running to make the UK a leader in carbon capture and, more importantly, to avert catastrophic climate change, the hope is that CCS turns out to be the solution and not a costly, carbon-belching mistake.

Photography by wknight94