The Canberra based Global Carbon Capture and Storage Institute (GCCSI) has had several formal inaugurations in Canberra and Europe earlier this year. This week it announced its first significant output, a report on the global status of CCS.

Nick Otter, CEO of the institute, released a statement which has been duly reported by Australian media (here, here and here). The full 224 page report, commissioned from WorleyParsons (itself a potential player in CCS construction/operation), is downloadable from the GCSSI website here (a 10MB PDF).

There has been much politicized commentary revolving around dubious claims and figures by the likes of the now defunct Concept Economics/Minerals Council, the Australian Coal Association, the IPA and in fact Martin Ferguson, the responsible federal minister, who has repeatedly stated that the institute will deliver at least 20 commercial scale CCS plants around the world by 2020.

By comparison the new report is a more professional and properly dispassionate analysis of the actual status of CCS around the world.

In somewhat surprising and welcome candour, the report suggests that there is a low likelihood of CCS being economically viable before 2030 to 2040. It will need very significant additional government subsidy of their construction while their operation would require a carbon price from $60 to more than $112 per tonne.

On the first point, the institute has A$2.4B which Martin Ferguson said would be used to build four full commercial-scale CCS plants in Australia. On the second point, modelling under the proposed CPRS shows the carbon price will not meet these thresholds before the mid-2030s.

The bulk of the actual report is a somewhat laborious listing and discussion of hundreds of actual or planned CCS plants around the world. The vast majority of these, however, have nothing to do with commercial power generation. Many involve capture of gas containing high CO2 content from oil fields where it is reinjected into the oil bed to both sequester the unwanted gas and improve the oil recovery from the field. This is nothing new and not particularly relevant to the institute’s remit.

In fact the report says that there are only seven operating CCS but none are coal-burning power generating plants, again not of much interest. But this is slightly curious because there are actually two functioning CCS plants at coal-fired commercial power plants as Crikey has previously reported: a 20MW pilot plant at Schwarze Pumpe in Germany, and the Mountaineer CCS in West Virginia USA.

Given the US$100M cost of the latter for capture of only 1.5% (20MW equivalent) of the giant 1300MW plant, perhaps it is missing from the report because it opened in late September — or alternatively, the cost implications are too scary.

Certainly the report and Nick Otter in interviews, stress the “much higher than expected costs”. But again this is no surprise to anyone paying attention. In September on the ABC Dr Kelly Thambinuthu (U. Qld) estimated one full scale CCS plant could cost $4B, and Professor Mark Diesendorf (UNSW) said that it was “an Australian delusion” to think that this fantastically expensive process could be seriously addressed by Australian efforts, even if $2.4B was thrown at it.

Yesterday on ABC radio Hugh Saddler said “This is absolutely no surprise”. Crikey first noted it in April and May.

Another sobering observation from the report is that government will need to assume liability for the risks of potentially disastrous leaks of sequestered carbon dioxide — reminiscent of the nuclear industry which could never obtain commercial insurance.

So, this is the first official reality check on Clean Coal — for government and the Australian coal industry. The only surprise is that it is being presented as a surprise. One can only wonder if this is partly a tactic to get much more funding out of the government, without which the whole project looks in jeopardy. In any case it is to be welcomed as a basis for more realistic formulation of energy policy in Australia.

One thing should be clear already. The huge subsidies required to build even demonstration plants, plus the high operating costs that in turn require high carbon cost and/or much higher retail electricity prices all point to the obvious conclusion: alternative renewable energy sources look likely to be competitive with coal under the relevant timetable and carbon pricing, as their advocates have repeatedly claimed. And this also make more strategic sense for Australia, both as replacement of coal-based energy and as potential future industries.

Let us be clear. It is not that CCS is impossible. It is just that, unlike several renewables energy technologies which are expected to continue dropping in cost, it has always been extremely difficult to imagine ever making it affordable.

Michael James is an Australian scientist who has co-authored over 100 papers in international science journals. These are the author’s personal opinions and do not represent the views of any organisation or institution with which he is affiliated.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey