Carbon Capture and Storage CCS

"CCS  (Carbon Capture and Storage)  could be the size of the present day North Sea Oil business in a  few decades, it is simply the reverse of the Oil and Gas business putting climate change Co2 Gas  back in the ground after the fossil fuels have been burned to generate energy"   New Energy Bank are actively seeking CCS funding opportunities seeking equity and debt  contact New Energy Bank  origination team.

What is Carbon Capture and Storage (CCS)?

Carbon is emitted into the atmosphere (as carbon dioxide, also called CO2) whenever we burn any fossil fuel, anywhere. The largest sources are cars and lorries, and power stations that burn fossil fuels: coal, oil or gas. To prevent the carbon dioxide building up in the atmosphere (probably causing global warming and definitely causing ocean acidification), we can catch the CO2, and store it. As we would need to store thousands of millions of tons of CO2, we cannot just build containers, but must use natural storage facilities. Some of the best natural containers are old oil and gas fields, such as those in the North Sea. Left, diagram of possible locations for underground storage of CO2, from IPCC report on CCS. For a world map of current CCS schemes, see the Scottish Centre for Carbon Storage map.

What might Carbon Capture and Storage (CCS) look like?

The diagram shows a conceptual plan for CCS, involving 2 of the common fossil fuels, methane gas (also called natural gas) and coal. Methane gas is produced from offshore gas fields, and is brought onshore by pipeline. Using existing oil-refinery technology, the gas is 'reformed' into hydrogen and CO2. The CO2 is then separated by a newly-designed membrane, and sent offshore, using a corrosion-resistant pipeline. The CO2 goes to an oilfield. The CO2 is stored in the oilfield, several km below sea level, instead of being vented into the atmosphere from the power station. The diagram is the Scottish Centre for Carbon Storageand is available for download for educational and similar use.

What are carbon dioxide (CO₂) emissions from the UK and worldwide

The UK emits more than 500 millions of tonnes of carbon dioxide every year. The quantity has steadily increased since the start of the industrial revolution (1800's) and peaked late in the last century. We are not the country that uses the most CO2 per member of the population - but our usage is still high. Worldwide, emissions are still rising.

UK CO2 emissions since before the industrial revolution. From National Energy Foundation, data from Carbon Dioxide Information Analysis Center. Data compiled by G. Marland, T. A. Boden and R. J. Andres of ORNL

How does CO₂ affect the oceans?

About half of the extra CO2 from the atmosphere will dissolve in the oceans, making the water more acidic. The diagram shows how acidic the oceans will become in the future, upto the year 3000. To work this out, it was necessary to: predict how CO2 emissions will change in the future (the top of the diagram) calculate how this will change the amount of CO2 in the atmosphere (middle part of the diagram) finally work out how acidic the oceans will become (bottom part of the diagram) The acidity is shown as a change in pH units. The effects of this change on marine life is unknown, but could be disastrous. Diagram from Caldeira, K. & Wickett, M.E. (2003) Nature, v. 425. p. 365

Why is the UK a good place to capture and store CO₂? 


UK has numerous oil and gas fields, many of which are becoming emptied of hydrocarbons. These are perhaps the best places to store CO₂. A study in 1996 estimated that we have space for about 5.3 Gt CO₂ in depleted oilfields (i.e. 5,300,000,000 tonnes), and about 11-15 Gt CO₂ in depleted gas fields. This is about about 10 years of total UK CO₂ emissions in oilfields, and a further 30 years in gasfields. We have the technical expertise to plan the storage (gained from extracting the oil and gas), and an established industry base that could undertake the work. 

There is a second type of geological store, known as saline aquifers. These are porous rocks deep below ground that are full of salty water that is of no use for drinking or agriculture. In the UK, the same 1996 study estimated that we could store 19 - 716 Gt CO₂ like this (i.e. up to 716,000,000,000 tonnes) - perhaps sufficient for 500 years of UK emissions. There are more geological problems in using such storage sites, as we know less about the geology. However many of the rocks are similar to oilfields, so there is good reason to suppose that these saline aquifers are well worth investigating in more detail. Infact, the only present day test site for underground CO₂ storage in the North Sea uses a saline aquifer at 1km below the seabed, which is sited above the Norwegian Sleipner Field. 

When should we do this?

Now! We should start CO₂ injection immediately, and expect to have to continue until at least 2050. Hopefully by this time we will have developed lower-carbon technology and have reduced CO₂ emissions to levels that are not causing environmental damage.

There is a good reason why we should start CO₂ storage sooner rather than later - at the present almost all of the UK offshore oil and gas fields still have their platforms in place - these are the 'oil rigs' that everybody is familiar with from photos in newspapers. These platforms can be modified for CO₂ storage, at a fraction of the cost of building and installing new facilites. By the end of the next decade, many of these platforms will have been removed as the oil and gas supplies run dry. New facilities for CCS would hence have to be built, increasing the costs.

What if we do nothing?

The longer we wait, the worse it gets. You may not believe in climate change, but most scientists believe that the evidence of high CO₂levels and hot climates in the past is compelling. You may not care if the summers get a few degrees warmer, but the ocean will inevitably become more acid, and the last time that happened it became a layered green soup (about 50 Million years ago). Click here for more information on predicting climate change in the future.

Like all preventive medicine, it's easier to put off the fateful day. But when that day arrives, it causes you more pain, and costs more, compared to early actions. Its important to realise that, even if we act now, in 2005, the climate will carry on warming for another 3 or 5 degrees Centigrade. That means some parts of the UK may have a climate like southwest France. But where will the Spanish live, and the French, and all the people in North Africa, and all the people in the southern USA, as these areas dry and heat up to become uninhabitable desert?

By acting now, we have a chance to limit that rise to less than 5 Centigrade, by keeping atmospheric CO₂ less than 550 parts per million.

What will it cost?

This will cost money, in more expensive fuel costs. However, it will not cost very much. For the world scale, estimates are commonly about 2% of Global Domestic Product. That is one year of normal growth.

Each individual in the UK is responsible for about 10 tons of CO₂ each year, and estimates of cost for capture, liquefaction and storage in North Sea aquifers are about 20 pounds per ton. So that costs about 200 pounds per person each year. If energy efficiency is also increased, the cost may be only half of this - 100 pounds per person per year. Thats about 1p or 2p on each electricity unit. Will that be a disaster? Well in the winter of 2004 -05, gas prices incresed far more than that, and in the year 2004, the price of crude oil and petrol increased by far more than that. And nothing catastrophic happened to the UK economy. How much is it worth to keep the world habitable, and the oceans alive?

Don't forget that doing nothing will also cost money, for example in damage caused by rising sea levels and extreme weather events. In a report to the UK Government, Sir Nicolas Stern concluded that it is cheaper to act now, then to wait and pay for the damage.

What next?

The component parts of Carbon Capture and Storage are all present. However the money does not work out yet, because a Generating company needs to pay for capturing the CO₂ and transporting CO₂ towards a disposal site. Then an Oil company needs to pay to place the CO₂ deep below ground.

There are several ways of making CCS economic, all require Government intervention in the market place:

• Cap and Trade. Companies are given CO₂ emissions quotas. If a company exceeds its quota then it has to buy more emissions permits from a company that has not used its allocation up. Hence the permits have a value and can be traded, such as in the European Emissions Trading Sceme (ETS).
• Tax CO₂ emissions. This puts a value on all CO₂ emissions to the atmosphere, hence it may become cheaper to capture the CO₂ and store it. The Norwegian Government has used this approach.
• Limit CO₂ emissions from power stations in terms of the amount of CO₂ per unit of energy generated. For example the UK Conservative Party suggested in summer 2008 that power stations should have a maximum emission limit equivalent to a state-of-the-art gas-fired plant. CCS would hence be required for coal-fired plants (which emit much more CO₂ than gas-fired plants), and is paid for by the price difference between gas (expensive) and coal (cheap).
• Direct Government subsidy. In this method, a private company, or a coalition of power generators, pipeline owners and oil companies, are given the cost difference between the price of building a new conventional fossil-fuel power station, and one with CCS. The difference in operating costs would also be compensated. This is the approach the UK Government is using in the competition to build the first UK CCS scheme, which is ongoing as of spring 2009 with no likelyhood of a decision anytime soon.
• Legislation directly requiring all new power-stations to have CCS. This is pretty drastic, but could occur if by (say) 2020 the EU's or World's CO₂ emissions are still increasing, and there are dramatic signs of irreversible climate damage such as the collapse of the Greenland ice sheet causing global sea-level rise.

In addition, there is EU legislation in preparation that would set legally binding targets for CO₂ emissions from member states for the year 2050, and possibly for intermediate years (perhaps 2020?). Some countries are not waiting for this, but are setting their own targets, e.g. the UK. Many experts believe that without CCS, these targets are impossible to reach unless people dramatically and drastically change their lifestyles - no more foreign holidays or air-freighted out-of-season fruit and vegetables?

Following the UK Budget, 22 April 2009, the UK Government announced the following measures to encourage CCS development within the UK:

• “No new coal without CCS demonstration from day one.”
• “Full scale retrofit of CCS within five years of the technology being independently judged as technically and commercially proven.”

UK carbon capture a one horse race

22 October 2010

On the same day UK ministers revealed a £1 billion fund for the development of carbon capture and storage (CCS), power company E.ON UK announced it is pulling out of the government's national CCS competition, leaving just one company in the race. In 2007 the government announced a competition to build one of the world's first commercial scale CCS demonstration plants in a bid to strengthen the UK's position as a world leader in cleaner fossil fuel technology. Before E.ON's departure from the race, energy firms BP and Peel Power had already pulled out of the competition in 2008 and 2009 respectively. 

ScottishPower's CCS pilot plant at Longannet is the last contender in the national competition © ScottishPower/Aker

The current economic climate has made E.ON's plans to build a new coal-fired power plant at Kingsnorth uneconomical 'for the foreseeable future,' meaning the company will not have a facility on which to develop the CCS technology, E.ON chief executive Paul Golby said. The company also said it could not keep up with competition timescales and thus was left with no option but to withdraw from the race. 

'As a group we still believe that carbon capture and storage is a vital technology in the fight against climate change and will now be concentrating our efforts on our Maasvlakte project in the Netherlands for future generation of CCS projects,' Golby said in a statement.

As part of the government's comprehensive spending review, chancellor George Osborne on Wednesday announced a fund of up to £1 billion for CCS demonstration projects. Scottish Power, the only firm now left in the government's CCS contest, welcomed E.ON's decision and said it was 'committed to the CCS project at our Longannet plant and are on schedule with our engineering and design work.'

The Department of Energy and Climate Change told Chemistry World that 'Although Scottish Power is the only company eligible for the £1 billion, it does not guarantee the company will satisfy all of the conditions to secure the money. We need to ensure that the taxpayers are getting their value for money.'

The government also announced that it is committed to launching three more such competitions before the end of the year and will begin a consultation to decide whether the money will come from a CCS levy on consumer bills or government funds.

Ayrshire Power, which was part of the Peel Power consortium that entered the first competition only to pull out last year, is keen to enter the new competitions. The firm is currently developing CCS technology for a planned multi-fuel plant at Hunterston power station in Ayrshire, Scotland.

Akshat Rathi

Power Plant Design Gets Smaller

October 22, 2010 

Hydroelectric power is the oldest and the "greenest" source of renewable energy. In Germany, the potential would appear to be completely exploited, while large-scale projects in developing countries are eliciting strong criticism due to their major impact on the environment.

Researchers at Technische Universitaet Muenchen (TUM) have developed a small-scale hydroelectric power plant that solves a number of problems at the same time: The construction is so simple, and thereby cost-efficient, that the power generation system is capable of operating profitably in connection with even modest dam heights.

Moreover, the system is concealed in a shaft, minimizing the impact on the landscape and waterways. There are thousands of locations in Europe where such power plants would be viable, in addition to regions throughout the world where hydroelectric power remains an untapped resource.

In Germany, hydroelectric power accounts for some 3 percent of the electricity consumed – a long-standing figure that was not expected to change in any significant way. After all, the good locations for hydroelectric power plants have long since been developed. In a number of newly industrialized nations, huge dams are being discussed that would flood settled landscapes and destroy ecosystems. In many underdeveloped countries, the funds and engineering know-how that would be necessary to bring hydroelectric power on line are not available.

Smaller power stations entail considerable financial input and are also not without negative environmental impact. Until now, the use of hydroelectric power in connection with a relatively low dam height meant that part of the water had to be guided past the dam by way of a so-called bay-type power plant – a design with inherent disadvantages:

The large size of the plant, which includes concrete construction for the diversion of water and a power house, involves high construction costs and destruction of natural riverside landscapes.

Each plant is a custom-designed, one-off project. In order to achieve the optimal flow conditions at the power plant, the construction must be planned individually according to the dam height and the surrounding topography. How can an even flow of water to the turbines be achieved? How will the water be guided away from the turbines in its further course?

Fish-passage facilities need to be provided to help fish bypass the power station. In many instances, their downstream passage does not succeed as the current forces them in the direction of the power plant. Larger fish are pressed against the rakes protecting the intake of the power plant, while smaller fish can be injured by the turbine.

A solution to all of these problems has now been demonstrated, in the small-scale hydroelectric power plant developed as a model by a team headed by Prof. Peter Rutschmann and Dipl.-Ing. Albert Sepp at the Oskar von Miller-Institut, the TUM research institution for hydraulic and water resources engineering. Their approach incurs very little impact on the landscape.

Only a small transformer station is visible on the banks of the river. In place of a large power station building on the riverside, a shaft dug into the riverbed in front of the dam conceals most of the power generation system. 

Santos raises another $420m for Gladstone LNG project; $1.4 billion raised so far through Euro hybrid

October 15th 2010

SOUTH Australian oil and gas major Santos has raised another $420 million in funding for its Gladstone liquefied natural gas project.

The new funding through the Euro hybrid market brings the total amount of hybrid capital raised by Santos in the market to more than $1.4 billion since September this year.

The follow-on issue represents another significant step towards funding Santos' share of the GLNG project, with a planned final investment decision before the end of the year.

Santos executive vice-president and CFO Peter Wasow said the follow-on hybrid issue demonstrates Santos' strong reputation in the capital markets and its commitment to maintain an efficient capital structure.

"Given the strong support received for our initial hybrid issue in September, we received significant demand from investors for a follow-on issue.''

RELATED COVERAGE

• Santos signals another raising The Australian, 6 days ago
• Shares end lower from profit-taking Adelaide Now, 6 days ago
• Santos raised $1.4bn for Gladstone Perth Now, 6 days ago
• Santos boosts hybrid capital raising The Australian, 6 days ago
• Santos to raise $908mCourier Mail, 17 Sep 2010

"As we continue to proactively finalise our GLNG funding strategy, it was a logical decision to return to the Euro hybrid market and further reduce on a dollar for dollar basis the amount of potential equity that may be required to maintain our BBB+ credit rating.''

French company Total recently bought a 15 per cent stake in the GLNG project for $650 million.

The coal seam gas project had also secured more than $100 billion of contracts, making it one of the largest export deals in Australia's history.

Santos has yet to publish an estimate of the cost of building GLNG but analysts forecast it will cost about $16 billion.

It now has a 45 per cent share, meaning its funding commitment would be about $1 billion more than it has already secured.

Santos is awaiting federal assessment of GLNG. It aims to make a final investment decision by the end of the year if federal approvals are forthcoming

Wausau approves biomass plant height variances

WAUSAU, Wis. (WSAU) – Wausau’s zoning board of appeals has unanimously approved two height variances for a proposed biomass power plant in Rothschild.

We Energies  and Domtar are seeking an 85-foot variance from the city’s airport height limitation ordinance for its 265-foot tall biomass boiler stack and a 30-foot variance for its 210-foot tall auxiliary boiler stack.

Extraterritorial zoning powers give the city control over structure heights in surrounding municipalities because of their impact on the Wausau downtown airport, which is in city limits. Wausau chief zoning administrator Roger Sydow says those variences were the only thing the city could rule on. "We can't deny this because we don't like the look of the plant, or any other reason, it's got to be if it's safe for airplane travel." 

Rothschild’s zoning board of appeals has already granted four height variances and approved the power plant’s site plan.

The state Public Service Commission, which must give final approval to the project, has said that there is no need for an environmental impact statement.

Nordic Investment Bank finances Vestas wind turbine R&D programme

13 October 2010

Nordic Investment Bank (NIB) has agreed to finance a research and development (R&D) programme by Denmark-based wind turbine manufacturer Vestas with the goal of developing a new type of 3MW wind turbine for low and medium wind conditions.

The bank has committed to a 4.5-year loan agreement totalling €25m, which is an extension of the €30m loan that it agreed to provide Vestas with in December 2009.

The programme will focus on improving the design of wind turbine blades and nacelles as well as adjusting the cooling system and load-optimised operation of the wind turbine.

Vestas intends these measures to increase the wind turbine’s reliability, reduce energy consumption and increase output capacity.

‘Lending to R&D projects within the renewable energy field is at the core of NIB’s mandate. Innovation is one of the most important ways of raising productivity in an advanced economy and, hence, its competitiveness,’ said Johnny Åkerholm, NIB president and CEO.

Vestas designs wind turbine parks for all wind conditions has installed turbines in 65 countries worldwide.

The Nordic Investment Bank provides long-term financing to the energy, environmental, transport, logistics and communications, and innovation sectors.

Vestas also opened a new wind tower manufacturing plant in Pueblo in Colorado this week to address the US market, which is slated to be the world’s largest.

The facility has nearly 13 million square feet of space and eight miles of on-site railway tracks for the transport of materials and finished tower components.

Copyright © 2010 NewNet

STRONG DEMAND LEADS MERCURIA ENERGY TRADING TO INCREASE ITS NEW REVOLVING CREDIT FACILITY TO US$1,250,000,000

Mercuria Energy Trading is pleased to announce the successful signing of its US$1,250,000,000 Multicurrency Revolving Credit Facility (the “Facility”) which was initially launched at US$900,000,000.

The Facility was arranged by BNP Paribas, Crédit Agricole Corporate and Investment Bank, Fortis Bank (Nederland) N.V., ING Bank N.V., Natixis, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (trading as “Rabobank International”), The Royal Bank of Scotland plc, Société Générale Corporate & Investment Banking and Standard Chartered Bank (together the “Mandated Lead Arrangers and Bookrunners”).

A total of 24 banks committed during general syndication in addition to the 9 Mandated Lead Arrangers and Bookrunners. The Facility is split into a US$1,105,000,000 364-day Tranche A and a US$145,000,000 3-year Tranche B.
Guillaume Vermersch - Mercuria Energy Group CFO said :
“ The success of this transaction is supported by the growing diversified business model strategically deployed by Mercuria Energy group over the last 6 years. During 2009, we demonstrated continuing volume and profitability growth, a substantial commitment to the coal business and our Vesta terminal operations, expanded our global trading platform and deepened our capital base. We are very pleased with our bank syndicate’s support which has delivered an oversubscribed deal.”

Mercuria is a privately-owned international group of companies active over a wide spectrum of global energy markets including crude oil and refined petroleum products, natural gas, power, coal, biodiesel, vegetable oils and carbon emissions. It is one of the world’s five largest independent energy traders. It is committed to trading and operational excellence with a exceptional track record of risk management. Mercuria’s outstanding performance is attracting some of the best talent in the commodity and financial world. In addition to its trading core, it has upstream and downstream assets ranging from oil reserves in Argentina, Canada and the US to oil and products terminals in Europe and China, a substantial investment in the coal mining industry and a bio fuels plant.