Posts Tagged ‘ccs’
Barrow Island
The Australian and Western Australian Governments have just announced that they will accept the long-term liability arising from the storage of CO2 from Chevron’s Gorgon Project. Most scenarios for long-term climate change mitigation assume wide deployment of carbon capture and storage technology and this decision helps clear the way for what will be one of the worlds largest commercial projects.
If a company could be held liable ‘forever’ for the long-term risks associated with carbon storage, then it is unlikely that many projects would proceed. There is a debate going on regarding when and how governments should take on this liability. It will be interesting to see the details of this arrangement and what it bodes for future Carbon Capture and Storage projects.
Australia is betting big on carbon capture and storage (CCS). It’s a bet that Martin Ferguson is backing. The Federal Resources and Energy Minister recently opined against renewables in The Australian and said that “no serious response to climate change can ignore the need to clean up coal.”
The big question is how much will CCS cost? A recent report from Harvard found that ‘first-of-a-kind’ carbon capture and storage plants will cost approximately $150/tCO2 avoided.
Treasury’s modeling for the CPRS forecast that in 2050 — as far forward as they modeled — the cost of carbon would be $124.91 (2005 dollars — CPRS-15 scenario). So $150/tCO2 doesn’t look like a great investment at first glance. However, the Harvard report also found that as CCS technology matures and if construction costs reduce from 2008 levels then the costs could reduce to as low as $25/tCO2 avoided.
A primary reason for the emissions trading scheme is to encourage business to invest in abatement. Businesses that don’t reduce their emissions — that simply purchase permits at auction — risk becoming uncompetitive and unsustainable. So all businesses — not just electricity generators — have strategic investment decisions to make right now.
Carbon Capture and Storage (CCS) is very important to the government’s current plan for dealing with climate change. This is clear from the $100M investment the government is making in the Global Carbon Capture and Storage Institute (GCCSI) and the recent treasury modeling, which forecast that Australia’s costs will be 25% higher in 2050 if CCS technology isn’t viable.
GCCSI is envisioned as a global institute supporting international research and facilitating projects hosted in Australia. The United Kingdom and Norway have publicly backed the plan. While some people see CCS as a silver bullet, being the only way we can make deep cuts in emissions using fossil fuels, for others it is a pipe dream with many challenges to overcome to overcome.
In any case it is a key part of the government’s strategy to deal with climate change and something we need to follow.
The Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC), is in many ways the forerunner of the GCCSI. CO2CRC is the epicenter of CCS research and application in Australia. They have recently published an interesting review of the CCS activity in Australia and publish a large number of other useful reports and fact sheets.
If you want to understand Carbon Capture and Storage, the CO2CRC is definitely the place to go.
The Council Of Australian Governments (COAG) met in Perth on the second of October. This is the premier meeting of Australian state and territory leaders with the Federal Government. Its role is to achieve policy reform on areas of national significance that require cooperative action by Australian governments. While their discussions are wide ranging, covering everything from the economy to indigenous health, of particular interest to us are the agreements relating to climate change. These discussions centred on improving energy efficiency and the new Global Carbon Capture and Storage Institute.
Energy Efficiency
COAG has agreed to develop a National Strategy for Energy Efficiency to accelerate energy efficiency efforts across all governments. The strategy should also help households and businesses prepare for the introduction of the Carbon Pollution Reduction Scheme (CPRS). The strategy is expected to be ready around June 2009.
Meanwhile, COAG has agreed to develop national legislation for appliance energy performance standards and labelling. Work done here here will be fed into the energy efficiency strategy. A national framework should simplify enforcement and improve consistency across Australia.
This is a very positive step because improving energy efficiency is the most important strategy for reducing carbon emissions.
Carbon Capture and Storage
Carbon Capture and Storage has been identified by some as one of the major pathways to lower carbon emissions. In July 2008, the Group of Eight economies set the goal to commit by 2010 to at least 20 industrial scale demonstration projects to enable the broad deployment of carbon capture and storage technology by 2020.
In September the Prime Minister announced the Global Carbon Capture and Storage Institute. The institute’s role is to accelerate the development and deployment of carbon capture and storage technology. It will also assist supporting areas such as regulatory frameworks.
COAG agreed that the Commonwealth would work with State and Territory governments to finalise the design of the Global Carbon Capture Storage Institute. And they agreed with the principles of supporting CCS research and eventual commercial deployment.
Around 80% of Australia’s electricity production currently comes from coal, and coal exports will earn about $43 billion in 2008-09. Given our heavy reliance on coal and coal exports, it is understandable that the Australian government is keen to fast-track research into this area.
To date although small scale projects have been built, no industrial scale integrated CCS power plant has been built. However as Garnaut points out if carbon capture and storage fails Australia may still be be a country of low-cost and low-emission energy because of abundant geothermal, solar, wind, wave and biomass renewable resources and reserves of natural gas and uranium.
So while COAG’s interest in climate change is positive we should hope that we’re not putting too many eggs in too few baskets. The full COAG communique can be found here.
