Jeremy Lovell, PlanetArk 1 Jul 08;
LONDON - Britain was on Monday announcing a shortlist of firms in a tender to build the world's first commercial-scale power plant to burn coal and gas without adding to global warming.
Carbon Capture and Storage (CCS) promises a technological solution to soaring emissions of the greenhouse gas carbon dioxide from fossil fuel burning power plants -- but with strings attached.
"It is the great panacea. It would mean not having to do the hard things like changing the way we live," said Michael Grubb, chief economist at Britain's Carbon Trust.
"The trouble is that while everybody says it can be done, no one has yet done it. There are very big companies out there with very deep pockets but even they are not doing it."
The reason is cost.
"Estimates tend to group around an extra 30 to 50 percent in capital costs and around 15 percent more in running costs of a power station," said Tom Burke of environment lobby group E3G.
At the same time, power output is cut by anywhere between 10 and 30 percent, depending on the technology used.
The resulting extra cost of building and running a CCS power station means no company is prepared to invest in trying out the technology, and perhaps finding ways to improve and streamline it, without enormous subsidies.
The winner of the British competition will get help from the government likely to run into hundreds of millions of pounds.
VAST MARKET
The incentive for power firms is that, if CCS can be made commercially viable, demand for the technology could be huge.
The International Energy Agency says the quantity of coal -- the dirtiest fuel -- being burned worldwide will double to the equivalent of 5 billion tonnes of oil by 2030.
"Potentially the market for this technology is going to be worth trillions -- of whatever currency you name," said Jeff Chapman of Britain's Carbon Capture and Storage Association.
The carbon is captured either before or after burning a fossil fuel at a power station, then put deep underground in a geological formation such as a saline aquifer or old oil or gas field where it cannot pollute the atmosphere.
Chapman says regulation is needed as well as incentives: "In Australia, Canada, the United States, Germany, the Netherlands and Norway as well as Britain companies are ready and waiting."
The European Union wants 12 full-sized pilot projects to be running by 2015, and the technology commercially viable by 2020.
Utilities such as Germany's E.ON and RWE and oil majors such as Royal Dutch Shell, Total and BP have voiced an interest, but only in Britain has progress been made with a CCS competition.
MORE AND MORE URGENT
But the problem is increasingly urgent.
Atmospheric carbon is already at 385 parts per million (ppm) and rising at around two ppm a year. Scientists say 450 ppm is equivalent to a rise of two degrees Celsius above pre-industrial levels in global average temperatures, and is about the limit the planet can stand without wholesale extinction of species.
Lars Josefsson, head of the Swedish power firm Vattenfall, told a climate change seminar last week that CCS could account for 3 billion tonnes of CO2 abatement globally by 2030.
This would make a sizeable dent in the world's current output of over 6 billion tonnes of CO2 a year, even though this figure will rise steeply as countries such as China and India fuel much of their economic expansion with coal.
But no one has yet managed to make CCS work at commercial scale and therefore no one knows the true cost -- or if it really can be a planet saver.
Norway has been storing oil under the Sleipner oil field for a decade with no trouble, but only in a tiny trial.
Middle Eastern oil states are also interested because carbon dioxide has successfully been used to push more oil out of depleting wells and exhausted wells are in effect vast unused parking lots for unwanted CO2, the main climate culprit.
Masdar, the United Arab Emirates' clean technology fund, is keen to build a national CCS network and Saudi Arabia is also investing heavily in carbon storage research.
China, which is building a coal-fired power station a week, is also interested, and boasts the capacity to store over a trillion of tonnes of CO2 underground.
But the scale of the challenge is also vast.
Josefsson said new calculations showed average carbon output had to be cut to just one tonne per person by the end of the century to avert dramatic climate change. In the United States it is currently 20 tonnes, while in Europe it is around 12. (Additional reporting by Simon Webb in Dubai, editing by Kate Kelland and Kevin Liffey)
