Industry Highlights

I’m not sure if it’s because of the upcoming World Energy Congress in the South Korean city of Daegu, the impending publication of the latest assessment report on climate change by the United Nations Intergovernmental Panel on Climate Change or just the normal news cycle, but carbon capture and storage (CCS) has returned to the headlines of late.

The decision by the Norwegian government to cut short the full-scale carbon capture project at Mongstad will have disappointed many, who feel that without the commercial use of CCS it will be impossible for us to curb emissions, combat climate change and achieve a smooth transition to a low-carbon power system. However, almost simultaneously, the government confirmed it had strengthened its support for carbon capture research at the CO2 Technology Centre Mongstad (TCM) to the tune of $68 million.

The decision by the Norwegian government is confusing and could be described as ‘robbing Peter to pay Paul’, and certainly the work being conducted at the Mongstad facility was at full-scale, which needs to be demonstrated to give confidence in terms of the technology’s commercial viability. Having said that, TCM, which opened in 2012, is seen as the most advanced carbon capture testing centre in the world, so maybe in these economically-straitened times, it was a case of the Norwegian government looking to spend their money wisely.

It’s also not good news for CCS down under. As Tony Abbott was sworn in as the new prime minister of Australia last month, he immediately called for the scrapping of the carbon tax, which came into effect on 1 July last year, and he also reportedly has plans to stop the funding for Australia’s Carbon Capture and Storage Flagships programme. Both decisions do not come as a surprise, however, considering that Abbott has never been known for his ‘green credentials’.

Controlling carbon emissions from another major consumer of coal, the US, has also taken an important step forward with the US Environmental Protection Agency’s proposed Clean Air Act, which will aim to curb such emissions from all new coal and gas-fired power plants. For new coal-fired plants, they will need to limit their CO2 emissions to approximately 500 kg/MWh, with CCS expected to be one of the major technologies used to achieve this.

Although, welcomed by environmental groups, the new legislation has drawn criticism from several industry groups, including Robert Duncan, president and CEO of the American Coalition for Clean Coal Electricity. He was highly critical, saying the new rule would essentially “ban the construction of new coal plants” and would in fact “halt the development of carbon capture and storage”.

Returning to Europe, one of the biggest stories has been the re-election of Angel Merkel as Chancellor of Germany. Interestingly, she has said her first post-election priority will be to tackle the surging cost of electricity blamed on the Energiewende – the transformation of its energy system to one primarily-based on renewable energies.

This is undoubtedly welcome news for those calling for a change in Germany’s energy policy, including BDI, the Federation of German Industries, which fears the dash to renewables is pushing up electric power costs to levels “that endanger German competiveness”. A sobering thought when you consider Germany is the largest economy in Europe and the powerhouse of the region.

If Merkel is serious about tackling this issue, could we see a slowdown in renewable energy deployment, further cuts to subsidies or dare I even say it a rethink or even a reversal of her policy to shutdown all of Germany’s 17 nuclear reactors by 2022?

It’s obviously too early to say, but I wouldn’t be at all surprised that before the end of this year, we start to see a lessening of financial support for renewables, in particular onshore wind and solar, and some moves towards once again diversifying Germany’s generation mix – a change that would undoubtedly be welcomed by its power generators, many of whom are struggling with the financial viability of their business. However, nuclear power remains deeply unpopular with the German general public, so I’m not confident we’ll see the re-emergence of nuclear, but never say “never”.

Dr. Heather Johnstone à‚  Dr. Heather Johnstone
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