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A new era for CCUS – CCUS in Clean Energy Transitions – Analysis - IEA
CCUS - LEARNINGS, TRENDS & PROMISES: The IEA highlights Carbon Capture Utilization Storage (CCUS) among four pillars for the energy transition, along with renewable electricity, bioenergy and hydrogen. But according to this recent IEA article CCUS has not lived to its promise. More needs to be done in this decade.
REASONS FOR SLOW CCUS PROGRESS
- Lack of policy framework and incentives
- Need for coordination across multiple sectors is challenging task
- High capital investment requirement for the transport and storage infrastructure
- Technical Risks: Uncertainty around long-term ownership of liability of stored CO2
- Commercial Risks: Securing finance, untested insurance & finance markets.
- Public opposition to storage
LEARNINGS: FROM EXISTING (21) OPERATIONAL PROJETS
There are 21 CCUS projects currently in operation, some since early 1970's and 80's.
- The existing projects captures only 40 Mt/y in 2020 as against 300 Mt/y envisaged in 2009 for 2020
- USA accounts for most number of projects (50%); 75% (16) projects target only EOR
- EOR projects are natural gas processing applications; the concentrated CO2 streams have lower capture cost (USD 15-20/tCO2).
- Only one projects targeted power plant emission category.
- Sleipner offshore facility (Norway), is the only dedicated facility storing CO2 in saline aquifer (commercially enabled by carbon tax)
- Most projects have dedicated transport and storage and hence higher cost (no sharing of infrastructure)
TRENDS & PROMISE: FROM PROJECTS (31) IN PLANNING
Since 2017; 31 new projects have been announced with a ~capacity of 130 MtCO2/year ( some projects may drop?)
- Sixteen (16) projects are at advanced stages of planning with USD 28 billion in investment
- More CCUS projects are targeting difficult coal/gas fired power-plants & cement plants (that are not low hanging fruits)
- There is a greater shift towards dedicated storage (in saline aquifer) and less focus on limited application of EOR
- Increasing trend (33% of projects) focus on developing industrial hubs (shared transport & storage infrastructure) - lower cost
- The improved regulatory framework/incentives like 45Q tax credit in USA gives a major impetus to new investments
- The downturn, pandemic and low oil prices will definitely undermine the investments.
A new era for CCUS – CCUS in Clean Energy Transitions – Analysis - IEA
CCUS in Clean Energy Transitions - Analysis and key findings. A report by the International Energy Agency.
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