The Wilton CCS project site in Teesside.
Industrial CCS in Teesside: the cinderella project that could set the UK towards its climate and growth goals
The recent TUC report ‘Powering Ahead’ argues that Carbon Capture and Storage (CCS) is an investment in our industrial and environmental future. It will be important for the economic regeneration of key industries by stimulating future clean growth in the UK.
Teesside Collective is working to make CCS a reality. Investment in CCS infrastructure for industrial hubs will build a national strategic asset for the UK. It will support the long-term sustainability of UK industry. It will make UK industry more competitive, attract inward investment from international firms and grow a productive, high wage sector – ultimately safeguarding and increasing job opportunities and the strong contribution of heavy industry to the UK’s GDP.
We see CCS as a key element of the Government’s emerging Industrial Strategy. So why has a technology that is proven and has so much potential not come to fruition?
There are many assumptions about CCS, and two in particular have held back progress in the UK. First, that CCS has to start on power generation and, second, that it is too expensive. But what if both of these assumptions are wrong? What if massive, billion-pound power projects need not be first off the blocks? And what if CCS can, in fact, offer cost-effective carbon mitigation?
The industrial option
The shift to low carbon needs to happen in a way that continues to accommodate the power and materials needed to sustain our economy and way of life, but which have historically relied on oil, gas and coal.
While renewables and nuclear can be used in place of fossil fuels in power generation – and these are already being deployed with the help of Government incentives – few such ready alternatives exist for our vital chemical and process industries.
CCS is the best way of sustaining these vital sectors. This is why it is being pursued on energy-intensive plants in the United States, Canada and the United Arab Emirates, and why Norway, Belgium and the Netherlands are seeking to do likewise.
Teesside Collective is a ready-made, technically feasible opportunity for Britain to join this group of nations seeking the long-term, commercial edge inherent in removing damaging carbon dioxide from vital but polluting industries.
With one of the highest concentrations of industry in the country and located close to North Sea carbon storage sites, Teesside in Tees Valley is ideally placed. A CCS network here would help sustain, even grow, the UK’s vital but vulnerable industrial base. Without the plastics, gases, fertilisers and other raw products produced in the Tees Valley, our economy would be £2.5 billion poorer, with 12,000 fewer jobs.
The numbers stack up
But any proposal for investment in Industrial CCS must face the real world of tight government purse strings and slim industrial margins. We know this; we witnessed the Treasury’s eleventh-hour cold feet about funding the Peterhead and White Rose CCS projects.
Lord Oxburgh’s report to Government in September on CCS and low cost decarbonisation was crucial in this respect. So too is new work published this week by Teesside Collective on how an affordable finance mechanism for Industrial CCS could work.
Commissioned from Pöyry Management Consulting and funded by the Department for Business, Energy and Industrial Strategy, the model we propose would support a first, manageable building block towards the realisation of CCS in the UK that could be used as a template for other industrial areas.
Total costs for the proposed model, including access to a transportation and storage network as proposed by Lord Oxburgh, amount to £58 per tonne of CO2 (tCO2). This makes Industrial CCS a less expensive form of carbon abatement than offshore wind and nuclear (£200/tCO2 and £128/tCO2, respectively) in enabling the Government to meet its carbon reduction obligation in the most affordable way.
A modest step now for a big prize later
There are encouraging signs that ministers are alive to the significance of the industries at stake and the contribution they need to make to our carbon reduction goals if we are to retain them in the UK. For Government to meet its carbon reduction obligations, Industrial CCS needs to be implemented alongside low carbon energy sources.
The Government’s emerging Industrial Strategy needs to address the future of CCS in the UK. Ministers should not be blinded to one of the most cost-competitive carbon mitigation options purely because it does not readily fit into any of the incentive mechanisms they have inherited. What is needed is a modest investment to open up the environmental and industrial potential of CCS for the long-term.
2017 offers a window for this, and Teesside Collective stands ready to take a leading role.
A version of this blog was originally published in BusinessGreen on 8th February 2017.