Energy Transition Handbook - Flipbook - Page 35
Energy Transition Handbook 2021
35
Carbon capture utilisation and storage (CCUS)
CCUS involves the capture of CO2, from the burning of fossil fuels in electricity
generation and industrial processes, and its storage, usually underground, to prevent its
release into the atmosphere. This concept has the potential to be transformative and
will be required to meet global carbon reduction goals in the next three decades.
There are currently 51 large-scale CCUS facilities in the pipeline.
In the UK, for instance, the Committee on Climate
Change views CCUS as “a necessity not an option”,
and it is estimated that, in order to meet the
UK Government’s 2050 ‘net zero’ carbon target
the UK will need aggregate annual capture and
storage of 75-175 MtCO in 2050. Without CCUS
in the power sector, meeting those ‘net zero’
carbon targets is estimated to cost the UK an
extra £30 billion.
The International Energy Agency, in its IEA Clean
Technology Scenario, which sets out a pathway
consistent with the Paris Agreement climate
ambition, concludes that CCUS can contribute
almost 20% of the emissions reductions needed
across industry with more than 28 GtCO2
captured from industrial processes in the period
to 2060, the majority of it from the cement,
steel and chemical subsectors
Combining CCUS with other technologies has
other benefits: oil that is extracted through
enhanced oil recovery (EOR) methods that are
driven by CO2 capture and storage has a carbon
footprint which is up to 50 per cent less compared
to conventionally produced oil on a like by like
displacement basis, while allowing developers to
make the most of their existing assets.
Key risks:
•
Stranded asset risk
•
New, unproven technology risk
•
Need for government support for CCUS specific
risks (and related State aid issues)
•
EPC vs Target Costs vs EPCM solutions
•
Transport and Storage demand risk and third
party access to storage infrastructure
•
Long-term CO storage liability and leakage
•
Technology IP ownership and rights to use and
modify
•
Flexibility to respond to a changes in CO2
supply and economics
Case study
Hogan Lovells team has been at the forefront
of the CCUS market advising JX Nippon on
the Petra Nova CCUS project in Texas, the White
Rose consortium in relation to development of
a £2bn, 426 MW ultrasupercritical oxy-fuel coalfired power plant with full chain carbon capture
and storage and Drax in relation to its investment
in C-Capture the designer of world-leading
and innovative chemical processes for carbon
dioxide removal.
“They have fantastic relationships
within the industry and are able to
provide very creative solutions to
otherwise complex problems.”
Chambers USA, 2019 (Energy)