The global carbon capture and storage technology has developed for 45 years, and there are 98 projects in operation or construction around the world. However, the development speed of CCS is still slow, the cost is controversial, the policy support is unclear, and the new energy technology is developing rapidly, which poses certain challenges to CCS. However, as a carbon emission reduction technology, CCS is still crucial for reducing greenhouse gas emissions and achieving climate change goals in the future. Carbon capture and storage technology is one of the most remarkable ways to reduce CO2 emissions.
1 Global development status of carbon capture and storage technology
1.1 Latest progress of global carbon capture and storage project
Since the first ValVerdeCO2-EOR large-scale CCS project was put into operation in SharonRidge Oilfield, Texas in 1972, 98 CCS projects and 9 test centers around the world have been put into operation or started construction. According to the CO2RE database data of the Global Institute for Carbon Capture and Storage, by the end of 2017, there were 43 large-scale CCS projects in the world, of which 18 were in commercial operation, 5 were under construction, and 20 were in different development stages, capturing 40Mtpa of CO2. In addition, 28 pilot demonstration large-scale projects are in operation or under construction, capturing CO2 for 3Mt? Pa, see table 1.
1.2 technical status quo
With the improvement of new energy power generation technology and the decrease of power generation technology cost, the development of CCS is controversial. Some research institutions think that CCS technology is generally expensive and cannot reach commercial scale, and there are also serious practical problems in transportation after carbon capture, injection and storage of captured CO2. In order to reduce CO2 produced by coal combustion, there are two basic operation modes: one is to remove CO2 before coal combustion; The second is to choose the way after combustion to remove the flue gas before entering the atmosphere. There are mainly three technical options: pre-combustion, post-combustion and enriched combustion. CCS technology mainly focuses on oil and gas production, fertilizer, power generation and other industries. For example, in North Africa, InSalah project can separate CO2 from the produced natural gas and re-inject it into the produced oil and gas reservoir area. Sleipner in Norway is the world’s first fully operational offshore natural gas field capable of CO2 injection. In the United States, the CO2 produced in the process of fertilizer production is captured by Coriolis Nitrogen’s factory in Enid, Oklahoma, and then transported to enhance oil recovery (EOR).
1.3 Status quo of investment cost
The latest report on the global CCS cost released by the Global Carbon Capture and Storage Institute (GCCSI) points out that the CCS cost is a key issue discussed by the public and involves many factors, especially the CCS cost of coal-fired power plants is misunderstood and distorted. The latest report "The Holy Grail of Carbon Capture continues to puzzle the coal industry" by the American Institute of Energy Economics and Analysis (IEEFA) points out that coal-fired power plants in the United States need to spend huge costs to upgrade their equipment in order to adapt to CCS technological transformation. More than half of coal-fired power plants have a service history of 40 years, and CCS equipment has a service life of 20~30 years. In order to ensure the continuous operation of power plant facilities during the service life of CCS equipment, power plant owners must renovate and rebuild the plant facilities. Among them, SaskPower rebuilt the power plant in order to ensure that the operation period of the factory facilities of the border dam project can match the CCS transformation, and the cost exceeded 330 million US dollars. This kind of investment has no potential economies of scale.
Under the condition that the running time of each coal-fired machine is not saturated, increasing the cost of CCS technical transformation for coal-fired units will only increase the cost of each unit, resulting in a vicious circle, poor operation of power plants, and CCS technical transformation equipment will eventually become idle assets. From the current situation, coal plants that have not undergone CCS technical transformation are facing a situation that it is increasingly difficult to compete with wind energy and solar energy resources, as shown in Figure 1. As can be seen from Figure 1, increasing the carbon capture cost by 60 US dollars per ton, or finally increasing the cost by 30 US dollars per ton as advocated by advocates, will further weaken the competitiveness of coal-fired power generation.
According to the research results of the Global Carbon Capture and Storage Institute (GCCSI), CCS has a higher cost for wind power and solar power generation because it compares the leveling cost (LCOE), but this is an incomplete and inaccurate comparison, which does not include all power generation costs (transmission, distribution, grid stability and grid resilience). It is not appropriate to compare various power generation technologies without common characteristics with the leveled cost in the power industry, especially the renewable energy technology is affected by weather changes and has different values to the power grid. The cost per ton of CO2 emission reduction ensures that various technologies are compared in terms of the value and input of reducing greenhouse gas emissions.
1.4 Policy situation
According to the evaluation of CCS-PI policy index of countries around the world by GCCSI, as of 2018, Norway, the United Kingdom, the United States, China, Canada and Japan have the highest CCS-PI scores, and these countries have the strongest policy support for CCS technology, all of which have built or operated large-scale CCS projects or small-scale demonstration projects. Although Britain has no large-scale CCS projects, it has established a strong research framework and extensive support policies.
While promoting the commercial demonstration research of corresponding investment, CCS policy must also enhance the policy trust of investors. Once the policy trust is established, long-term capital investment can be realized, and the virtuous circle of investment and cost reduction will accelerate. In 2017, the confidence of CCS policies in countries around the world gradually increased. Among them, the United States promulgated the 45Q (tax reduction) regulation, and the United Kingdom established the CCUS Committee and the CCUS cost challenge working group; China promotes low-carbon technology (especially CCUS technology), the government allocates funds for CCUS, revises environmental impact guidelines and improves CCUS index system; Japan is committed to building a hydrogen energy society by 2030 and establishing a hydrogen energy industry chain (HESC) in Australia.
2 Challenges of global carbon capture and storage technology
2.1 CCS investment costs are controversial
With the cost reduction of clean power generation technologies such as wind power and solar energy, gas-fired power generation is rich in natural gas resources and low in cost, and the power generation industry needs to be reformed, which accelerates the development of CCS technology. However, CCS technology is generally expensive, which cannot reach the commercial scale, and there are also serious practical problems in transportation after carbon capture, injection and storage of captured CO2. According to the latest report of the Institute of Energy Economics and Financial Analysis (IEEFA), high-risk and high-cost investment in carbon capture technology may have been feasible before, but now these investments will no longer be realistic-the high cost of carbon capture technology is really prohibitive. Although the report mainly focuses on the US electricity market, the cost analysis of major CCS projects in the United States shows that it plays a warning role for any country considering the wide adoption of CCS technology.
2.2 global CCS policy is unclear
CCS policy is mainly to deal with climate change, but it is far from enough to invest in developing CCS technology. In fact, if there is no strong and sustainable policy, the global investment in CCS cannot be sustained. In the context of ensuring global population growth and wealth growth, reducing greenhouse gas emissions will generate huge costs, and in the long run, the benefits are uncertain. The public usually does not weigh the gains and losses of CCS technology by themselves, so the global policy on CCS must be enough to change the actions of all stakeholders. For example, it is generally believed that it is easier and less costly to discharge CO2 into the atmosphere than to capture permanently stored CO2. CCS capital market has not obtained enough income to achieve the required return on investment. Policy uncertainty is still a great challenge to the future development of CCS. There is a new project in CCS, and the established business models, structures and practices in mature industries will be applied to CCS projects, but these aspects of CCS are not yet mature, and high risks lead to high return on investment, so CCS financing is also very difficult. In addition, CCS investment needs the investment of long-term capital-intensive assets. A single project can reduce the emission of one million tons of CO2 every year, and requires the initial investment to reach hundreds of millions or one billion dollars. After running for decades, investors must have enough confidence to understand the existing and future policy environment, effectively carry out the project and optimize the risk investment strategy until a positive financial investment decision is realized.
Therefore, policies promulgated by law are very important for the development of CCS, and countries put forward specific measures for the government to achieve various goals when developing CCS.
2.3 The global cost of new energy power generation is getting lower and lower.
Bloomberg New Energy Finance’s "Long-term Outlook of New Energy Market in 2018 (NEO)" pointed out that in the long run, coal-fired power will become the biggest loser. From the perspective of electricity cost, coal-fired power will not be able to compete with wind power and photovoltaic, as shown in Figure 2. As can be seen from Figure 2, the cost of wind power and solar power generation is far lower than that of coal-fired power generation, and the cost of wind power is less than half of that of coal-fired power generation. From the perspective of system flexibility, coal-fired power will not be able to compete with gas-fired power generation and energy storage. In the end, most of the coal-fired power assets will be squeezed out of the market.
In order to achieve the goal of climate change, the whole world is pursuing more and more clean energy development. The speed of new energy development, the growth rate of installed capacity and power generation far exceeds that of traditional energy generation, and more flexible power forms appear, which has a great impact on coal movies, especially the cost of installing CCS technology in coal-fired power plants. Therefore, the cost of new energy generation is getting lower and lower, which is a great challenge for the wide application of CCS technology.
3 global carbon capture and storage technology application prospects
3.1 The application of CCS technology in different parts of the world should be implemented in combination with local conditions.
BP’s Technology Outlook for BP《2018 mentioned that according to the whole system model of the lowest cost path, the biggest carbon emission reduction is in the power sector, because for the power industry, this is the cheapest decarbonization option. In the "2℃ world", the power sector will reduce emissions by using bioenergy and carbon capture and storage (BECCS). BECCS power stations are favored mainly because they can absorb carbon oxides in the atmosphere during the growth of crops and create negative carbon emissions. However, when combustion is used for power generation, because carbon is trapped, it will not produce emissions. Generally speaking, the model determines that CCUS is an important part of the "2℃ world" with the lowest cost, but it is not included in the most economical "unconstrained path". Like the power industry analysis, this result shows that technological progress alone is not enough to make CCUS competitive enough to attract a large amount of investment, but needs targeted policy support and effective carbon pricing.
In Europe, in most research paths, by 2050, renewable energy will account for the largest proportion in the European power sector, and in the "unconstrained scenario", coal and natural gas will play an auxiliary role; In the "2℃ world", biomass energy and carbon capture and storage (BECCS) play an auxiliary role. In the "2℃ world", by 2050, the hybrid system of gas boiler and fuel electric heat pump will be favored by district heating. In the "2℃ world", North American wind energy and natural gas with CCUS decarbonization are dominant in the power sector, while in the "unconstrained" situation, natural gas without CCUS is dominant. In both cases, natural gas is also dominant in the thermal industry.
3.2 Global investment in CCS technology must obtain policy support to be competitive.
In BP’s latest technology prospect, CCUS is regarded as an important part of realizing "2℃ world" at the lowest cost, but its economy is not ideal under the scenario of unlimited carbon emissions. Combined with the analysis of the power sector, this result shows that CCUS can’t be fully competitive to attract a large amount of investment close to technological progress, so it needs targeted policy support and effective carbon pricing.
First of all, the policy must have a clear and definite purpose and be related to the target of CCS investment, so that investors can be sure that CCS investment is the result related to the policy, not an accidental result. Policies must be transparent and clear, so that investors can fully understand and quantify the opportunities and risks created by CCS investment policies under commercial conditions. Investors must be able to accurately predict the degree to which the return on investment will be affected by policies in the future development scenario. Finally, considering the long-term nature of CCS project, investors must fully trust that the policy will not change and will not greatly reduce the return on investment of the project during the investment period. Policy risk is also a key factor to evaluate policy stability.
3.3 Global CCS leads the new energy economy
CCS leads the development of new energy economy and has a series of CO2 utilization modes, mainly including hydrogen production, biomass and CCS, direct air capture (DAC) and carbon value (C2V).
3.3.1 Hydrogen production
Hydrogen production is mainly in the planning and feasibility study stage of CCS clean hydrogen initiative in Europe, such as the Dutch hydrogen replacing natural gas power generation project (H2M), H21 in the north of England, H21 hydrogen network in the north of England, Hynet, ErviaCorkCCS and HyDeploy in the northwest of England, etc. In Australia, the hydrogen energy industry chain is promoting CCS and hydrogen production.
3.3.2 Biomass and CCS(BECCS)
The combination of biomass energy and CCS technology can transform forests and crops into energy fuels and eliminate CO2 emissions from the atmosphere through the application of CCS, which can realize large-scale CO2 emission reduction. CO2 capture projects are mainly in Arkalon and Bonanza ethylene plants in Kansas, and CO2 storage is used to enhance oil recovery. In addition, industrial CCS projects in Illinois are all famous BECCS operation projects in the United States.
3.3.3 Direct air capture (DAC)
DAC directly captures CO2 and removes it from the atmosphere by adopting CCS technology. The successful project is Clime in Zurich, Switzerland? Works negative emission factory, Canadian CarbonEngineering, American GlobalThermostat, etc. ClimeworksAG, located near Zurich, Switzerland, became the first factory in history to capture CO2 from the air on an industrial scale and sell it directly to buyers. HowardHerzog, a senior research engineer at Massachusetts Institute of Technology, estimated that the total cost of this air capture system is about $21,000 per ton of CO, which is about 10 times the cost of carbon removal in fossil fuel plants. The industrial production method developed by CarbonEngineering in Canada can extract CO2 from the air, and it is the first to integrate this system with hydrogen production and fuel synthesis process. In cooperation with researchers from Harvard University, the cost of treating one ton of CO2 emissions is reduced to $94 through limestone, hydrogen and air. This technology can protect the environment and produce more liquid fuel with environmental protection benefits. American GlobalThermostat GlobalThermostat takes a different approach, focusing on the required heat and the speed at which it passes through the material, adopting a more compact design, which can release and produce CO2 at a very fast rate, and the overall cost is lower.
3.3.4 C2V
C2V refers to the creative application of CO2 in the production of new C2V products, including the production of fertilizer raw materials by Schabik Company in Saudi Arabia, the conversion of captured CO2 into soda powder by CarbonCleanSolutions coal-fired power station in India, and the mineral carbonator in Australia. National produces bricks and cement, and its acid gas is injected and CO2 is sealed.
4 Conclusion
With the increasing confidence of countries around the world in CCS policy, more and more projects have entered different stages of development. CCS has become an indispensable and important part to solve the problem of climate change. The most important thing is that CCS has been proved to be a safe and effective technology, the only technology that can effectively reduce fossil fuel emissions, and also an important technology to solve the emission problem of power industry. With the commercialization of more facilities, the cost of CCS will continue to decline. Under the background of the rapid development of new energy in the world, CCS is a transit channel to realize the new energy economy. The promising technologies such as CCS and hydrogen production, bioenergy and CCS technology and direct air capture will further promote the commercialization and large-scale new application of CCS.