BARRIERS TO CCS IMPLEMENTATION in AUSTRALIA

BARRIERS TO CCS IMPLEMENTATION in AUSTRALIA

I. INTRODUCTION

It is believed that in the absence of commercially successful CCS, some coal-mining and coal-based power-generating firms in Australia might struggle to operate profitably in a carbon-constrained economy (Garnaut , 2008). On the other hand, commercially successful CCS could generate strong expansion and prosperity. It would be consistent with Australian policy traditions to support R&D and commercialization activities related to carbon capture and storage by established coal-based electricity producers (Garnaut , 2008).

Many energy agencies have noted that global power generation will continue to rely on fossil fuels, but that carbon capture and storage is vital to that continued use (Mckee, 2006). However, the technique must be environmentally sustainable, cost-effective and capable of being broadly applied. There are a number of obstacles including: technology development and deployment, financing, legal-regulatory framework, capacity building, environmental assessment, public awareness and acceptance.

II. TECHNICAL BARRIERS

2.1 Low Concentration of CO2 Emitted From Power Stations

The purpose of CO2 capture technologies is to produce a concentrated stream of CO2 at high pressure that can be transported to a storage site (Baldwin, 2008). However, Saddler et al (2004) argued that the main problem is the large volume of flue gas and the low concentration of CO2 in the flue gas. In principle, Baldwin (2004) stated that the entire exhaust gas stream could be transported and injected underground. However, the cost of doing so makes this approach impractical, therefore, it is necessary to produce a nearly pure CO2 stream for transport and storage (IPCC, 2005). The more concentrated the stream of CO2 is in the flue gases, the cheaper and easier it is to separate and capture through the pre-combustion capture of CO2 or oxy-fuel combustion.

In Australia, CO2 emissions will be captured from HRL’s research at Mulgrave in a pilot-scale project (Cook, 2008). The capture technologies will be evaluated to identify which are the most cost-effective for use in a coal gasification power plant. However, these technologies are not commonplace in existing coal-fired power generation plants (Saddler et al, 2004). While, in the Zero-Gen project at Queensland, there is a problem pertaining to a small capacity of power generator (House of Representative Standing Committee of Science and Innovation (HRSCSI), 2007).

2.2 Difficulties with Retro-Fitting

Once a base-load power station is built, very little can be done to reduce its emissions over its life, which could be from 25 to 40 years (Baldwin, 2008). IPCC (2005) proved that although the cost of retro-fitting CCS technology to existing installations varies, its existing plants with CO2 capture is expected to lead higher costs and is more significantly reduced efficiency than newly built power plants with capture.

In the case of Callide Oxyfuel Project at Queensland, it involves the conversion of an existing 30MW unit at Callide A with power generation and capture of CO2 commencing in 2010 (Cook, 2008). The second stage of the project will involve the injection and storage of a total in the order of 30,000 tones of captured CO2 in saline aquifers or depleted oil/gas fields over about three years. However, HRSCSI (2007) argued that this project has no demonstration of large-scale CCS solution

2.3 Loss of Efficiency

CO2 capture systems require significant amounts of energy. This additional energy reduces the efficiency of power plants, leading to increased fuel requirements, solid wastes and environmental impacts relative to the same type of base plant without capture (IPCC, 2005). Effectively, power plants with CCS require more fuel to generate each kilowatt-hour of electricity produced and most of this additional energy is the energy required for capture and compression of the CO2 (IPCC, 2005).

Other studies also suggest that the generating efficiency would be reduced by 10-15% based on current technology (CO2CRC, 2009). The International Energy Agency notes that the older power stations are not efficient (IEA, 2006). However, as more efficient plants with the availability of capture and replace many of the older-less-efficient plants, the net impact will be a reduction in emissions (Baldwin, 2008).

2.4 Advance Problems

CO2 is already being captured in the oil, gas, chemical and food industries. However, the existing capture technologies were not developed specifically for large scale carbon capture from power stations. To reduce emissions from a typical power plant by 75%, the equipment would need to be ten times larger. Yet, according to CO2CRC (2009), there have been no applications of CO2 capture technology in Australia at the scale required for power plants (e.g. 500 MW).

The major challenge is to mount a project at the 500 MW scales which demonstrates all stages in the process from coal conversion, carbon capture, and transport, through to sequestration and long-term monitoring (HRSCSI, 2007). This raises logistic coordination and environmental and technical challenges that are not tested or resolved by small-scale demonstrations. The high capital cost of installing the huge post-combustion separation systems is also a major impediment to post-combustion capture of CO2 (Baldwin, 2008).

2.5 Poor Source to Sink Match for Some Major Emissions Regions

Large sources of CO2 are concentrated near major industrial and urban areas. Globally, many of these emission sources are within 300km of areas that potentially hold formations suitable for geological storage of CO2 (Baldwin, 2008). However, matching of CO2 sources with geological storage sites requires detailed assessment of source quality and quantity, transport, economic and environmental factors. If the storage site is far from CO2 sources, then its storage potential may never be realized (IPCC, 2005).

In 2004, 65 Environmentally Sustainable Sites for CO2 Injection, (ESSCIs) were identified and their total risked storage capacity is 740 Gt CO2/year, while current emissions from stationary point sources in Australia are 309 Mt CO2/year (Baldwin, 2008). However, this estimate does not reflect commercial aspect where each ESSCI must be analyzed in terms of project specific economics and include the costs of compression, transport and injection (Baldwin, 2008). By merging both economic and technical viability, Bradshaw et al (2004) concluded that a realistic estimate of Australia’s CO2 storage potential is around 25% of annual emissions, or approximately 77 Mt CO2/year.

2.6 No Integrated Full-Chain CCS Demonstrated

While each of the key CCS components of capture, transport and storage have been demonstrated in various industrial applications, they did not show the full chain capability, nor at the scale required to prove its application for large-scale power generation (MacGill et al, 2006). The major components of CCS are commercially available, yet, there is relatively little commercial experience with configuring all of these components into fully integrated CCS systems at the kinds of scales which would likely characterize a future deployment in Australia (Baldwin, 2008). MIT study (2007) pointed out that the demonstration of an integrated coal conversion, CO2 capture, and sequestration capability is an enormous system engineering and integration challenge.

III. ECONOMIC COST of CCS

HRSCSI (2007) indicated that if CCS is not included, more expensive technologies will have to be utilized to reduce CO2 emissions. While, the IPCC (2005) estimated that, in the long term, including CCS in the range of mitigation strategies will reduce the cost of stabilizing CO2 by upwards of 30 per cent.

In the Australian context, ABARE (cited in HRSCSI, 2007) estimated that if early action of including CCS is taken into account, Australia’s GDP in 2050 will be 2.5 per cent less than its GDP under a business-as-usual scenario. Without CCS, ABARE (cited in HRSCSI, 2007) predicted that carbon abatement will reduce its GDP by a further 0.7 per cent. CO2CRC (cited in HRSCSI, 2007) suggested a similar scenario that, to achieve carbon mitigation without CCS, it will cost the Australian economy about $2 billion a year more than if CCS is deployed. In contrast, Greenpeace Australia (cited in HRSCSI, 2007) rejected that there is no evidence available indicating CCS is the most economical mitigation option.

Surprisingly, the Australian Government responded hesitantly (HRSCSI, 2007). This is due to the heterogeneous nature of the technical options available including capture, transport, storage; the variability of its application; the technical and financial complexity of integration; and the still largely speculative nature of the risk profiles. In addition, IPCC (2005) stated that there is still little experience in a fully integrated CCS system as it has still not been used in large-scale power plants.

IV. LEGAL ISSUES

The regulatory framework will need to cover both onshore sequestration and offshore sequestration (HRSCSI, 2007). Currently state and federal legislation only covers access and property rights of sites. A nationally consistent framework is required which comprises issues such as transport, injection, monitoring and financial liability through the stages of CCS (HRSCSI, 2007).

There has been reluctance on the part of Australia Government to share risk, particularly long-term liability (Cook, 2008). Therefore, the issue of long term liability determines whether there is a major inhibition of CCS or not. On the one hand, CSIRO and Chevron (cited in HRSCSI, 2007) proposed that liability must be shared by operators and responsibility should be handed to the government once the site has been closed. On the other hand, Greenpeace Australia (cited in HRSCSI, 2007) argued that the long-term liability for leakage should not be transferred to government, and thus, to taxpayers and future generations, and the operators should be able to carry that risk.

V. ENVIRONMENTAL RISKS of CCS

The greatest environmental risk associated with CCS relates to the long term storage of the captured CO2 (HRSCSI, 2007). Leakage of CO2, either gradual or catastrophic leakage, could negate the initial environmental benefits of CCS and may also have harmful effects on human health. While there is some experience with geological storage of CO2 and natural gas for periods of approximately 10-20 years, evidence of long-term storage over many thousands of years has not been proven (TRUenergy cited in HRSCSI, 2007). However, CSIRO (cited in HRSCSI, 2007) opposed that the ongoing study has increased confidence in the viability of CO2 storage. In the proponent view, IPCC (2005) suggested that the environmental risks associated with CO2 capture and storage are low.

In the case of abrupt leakage, it could occur if the well seal at the point of storage failed, resulting in the release of sequestered CO2 (HRSCSI, 2007). However, evidence shows that if storage sites are carefully selected, the chances of a catastrophic leak would be minimal. Current projects, the Otway Demonstration Project, extend understanding of the scientific processes and risk minimization associated with the selection, sequestration and monitoring of CO2 in an Australian context (HRSCSI, 2007). In contrary, gradual leakage could occur as a result of incorrect site selection and inadequate preparation. This leakage would compromise the initial objective of removing the CO2 from the atmosphere (HRSCSI, 2007).

VI. PUBLIC PERCEPTION OVER CCS

The Australian Government (cited in HRSCSI, 2007) noted that the public is not well informed on CCS technology and its potential for climate change mitigation. The major public concern relates to potential leakage, consequent impact on the environment, and guidelines to secure public involvement through consultation processes. However, Friends of the Earth Australia insisted that public consultation for the Otway Basin Pilot Project is insufficient, where this is contradict to the CO2CRC report which claimed that extensive consultations preceded the announcement (HRSCSI, 2007). Thus, the community needs to be fully convinced about the long-term safety of storing large volumes of CO2 deep underground.

VII. CONCLUDING REMARK

CCS should be considered as a promising but still somewhat unproven option that potentially offers very significant abatement potential and good integration into the existing energy industry. However, its abatement is likely to come at a significant cost, and it is unlikely to be able to make a significant contribution for well over a decade. The actual implementation of CCS is likely to be lower than the economic potential due to factors such as environmental risks, the lack of a clear legal framework or public acceptance. In addition, there are many ways in which CO2 emissions can be reduced, however, most scenarios suggest that CCS will be only part of a suite of solutions.

REFERENCE

Baldwin, Stephanie. 2008. “Carbon Capture and Storage.” NSW Parliamentary Library Briefing Paper No 2/08. http://www.parliament.nsw.gov.au/prod/parlment/publications.nsf/0/959E4E67AFC1FB63CA25743F007EC318/$File/FINAL_CCS%202008.pdf. Accessed on 7 May 2009

Bradshaw, J., Allinson, G., Bradshaw, B.E., Nguyen, V., Rigg, A.J., Spencer, L., & Wilson, P. 2004. Australia’s CO2 geological storage potential and matching of emission sources to potential sinks. Energy 29 (9-10). P1623-1631

CO2CRC. “Otway Project Overview.” http://www.co2crc.com.au/otway/. Accessed on 6 May 2009

Cook, J Peter. 2008. “Demonstration and Deployment of Carbon Dioxide Capture and Storage in Australia.” http://www.sciencedirect.com/. Accessed on 7 May 2009

Garnaut, R. 2008. “The Garnaut Climate Change Review.” Final Report. http://www.garnautreview.org.au/CA25734E0016A131/pages/draft-report. Accessed on 7 May 2009

House of Representatives Standing Committee on Science & Innovation. 2007. “Between a rock and a hard place: The science of geo-sequestration.” http://www.aph.gov.au/house/committee/scin/geosequestration/report/front.pdf. Accessed on 6 May 2009

IEA. 2006. “Carbon Capture and Storage.” http://www.iea.org/Textbase/techno/essentials.htm. Accessed on 6 May 2009

IPCC. 2005. “Special Report Carbon Dioxide Capture and Storage.” http://www.environment.gov.au/settlements/industry/ccs/publications/key-findings.html. Accessed on 8 May 2009

MacGill, I., Passey, R. & Daly, T. 2006. “The limited role for Carbon Capture and Storage (CCS) technologies in a sustainable Australian energy future.” Int. J. Env. Studies 63 (6), p751-763

Massachusetts Institute of Technology (MIT). 2007. “The Future of Coal: Options for A Carbon-Constrained World.” http://web.mit.edu/coal/The_Future_of_Coal.pdf. Accessed on 6 May 2009

Mckee, N. Barbara. 2006. “Power Sector Approaches to Carbon Capture and Storage.” https://www.iea.org/Textbase/work/2006/enel/Session%203/McKee.pdf. Accessed on 7 May 2009

Saddler H., Reidy, C. & Passey, R. 2004. “Geo-sequestration: What it is and how much can it contribute to a sustainable energy policy for Australia?” The Australia Institute Discussion Paper No. 72. http://www.tai.org.au/documents/downloads/DP72.pdf. Accessed on 6 May 2009