CCS in the Netherlands - and the future of ROAD

Jul 01 2014


ROAD, the Dutch flagship CCS project, is currently “essentially mothballed” while the project team wait for financing. Speakers at the CATO conference discussed who should be doing more to get it moving – industry or government?

The ROAD project, to capture CO2 from a new power plant located on the Maasvlakte, in the Port of Rotterdam, and store the CO2 in a depleted gas reservoir in the North Sea, just 25km away, is currently “essentially mothballed” while the project team wait for financing to be agreed, said capture director Andy Read.
He was speaking at the 7th Dutch CCS Symposium of Dutch research organisation CATO in Amsterdam on June 19-20.  
CATO stands for CO2 Afvang, Transport en Opslag, or CO2 capture, transport and storage. ROAD stands for Rotterdam Opslag en Afvang Demonstratieproject or Rotterdam Capture and Storage Demonstration Project.
All the engineering for ROAD is complete, Mr Read said. So far the EU has committed Eur 180m to ROAD, the Dutch government ‘up to’ Eur 150m, and the Global Carbon Capture and Storage Institute (GCCSI) up to Eur 5m.
ROAD aims to capture CO2 from a new power plant located on the Maasvlakte, in the Port of Rotterdam, and store the CO2 in a depleted gas reservoir in the North Sea, just 25km away. 
“It is one of the best CCS projects,” Mr Read said. Being next to the sea, the capture plant doesn’t need cooling water. There is a huge amount of industry adjacent to the North Sea [which could provide CO2]. Rotterdam already pumps CO2 to greenhouses to fertilise plants, and “this could be extended”.
The ROAD project was launched in 2008, after E.ON agreed it could be connected to its new power plant. The project then became a key pillar of the Rotterdam Climate Initiative project. 
Over the past six years the ROAD team has worked closely with CATO researchers on many aspects, including power plant integration, managing emissions, and flow assurance, he said. 
For example there were concerns that the high pressure CO2 would freeze as it entered the low pressure (20 bar) reservoir and expand, and CATO did research to try to work out what would happen. 
Bert de Vries
Bert de Vries, Deputy Director-General, Department Energy and Sustainability Dutch Ministry of Economic Affairs, pointed out that ROAD is one of the biggest projects the Dutch government is considering altogether, comparable in size to major defence investments. 
Mr de Vries said he would like to see more industry involvement in the project. “I'm a bit disappointed we in government are trying to find a solution, and there is not a big call from industry to join us,” he said. 
“If this [CCS] is not a strategic decision for industry, then we do have a problem. It cannot be that this is only government business.”
From the government perspective, “CCS is a big challenge because it’s new,” he said. “You have competitors [for government funding] - solar and wind. I'm sure they will decrease enormously in price.”
Mr de Vries said he expected to see rapid change in the energy industry in coming years. “There will still be centralised production, but there will be a lot of other producers,” he said. 
“10 years ago, you knew all the producers [companies producing electricity],” he said. “Today there are 125 different players producing electricity, producing it at very different moments. There will be more and more producers.”
“In that world, CCS needs to have a place.”
 
Shell Nederland
Dick Benschop, president-director of Shell Netherlands and Vice-President Gas Market Development, and a former Dutch deputy Minister for foreign affairs, talked about the Barendrecht CCS project which Shell aimed to operate in the Netherlands in 2007-2010. 
Barendrecht is a suburb of Rotterdam, and the project aimed to store carbon dioxide there. 
Public campaigning led to the project being abandoned, despite intervention by Jacqueline Cramer, then Minister of Environment, and Maria van der Hoeven, then Minister of Economic Affairs. 
Inhabitants feared the plan would endanger the town and lead to a fall in house prices.
“We all thought it was a great idea, it couldn't be better, but that was not the idea of the inhabitants,” Mr Benschop said. 
The story of how relations with local inhabitants was handled is now seen as “a story of how not to do it,” he said.
As a result, “you'll probably see CCS going offshore for a while,” he said. “But at some point in time we hope we would be able to come onshore. 
“I think that would be difficult now.”
Mr Benschop did not explain why Shell is not involved in ROAD. 
Mr Benschop cited International Energy Agency figures from 2013 showing that “a global delay in CCS deployment would cause an increase in costs for power sector decarbonisation of $1 trillion”.
He cited UK Energy Technology Institute data showing “without CCS the additional costs to run a decarbonised UK economy in 2050 will be £32bn per annum.” 
The best way to reduce CCS costs might simply be to build more CCS plant, he said. “You double [global] capacity and get 10 per cent cost off, and repeat a number of times,” he said.
When it comes to finding the right financing arrangement, “UK is leading in Europe in terms of doing it with contracts for difference,” he said. 
Mr Benschop was asked if he thought there should be alternative approaches to the emissions trading scheme in achieving a low carbon society, on the basis that ETS has not been very successful so far. 
“I find the UK example on the carbon floor price an interesting one,” he said. There could also be “ETS reform, to get into a more meaningful CO2 price.” 
“If you look at transport, the cost of abatement is in triple figures [in terms of the money you have to spend to avoid a ton of CO2 being emitted]. “So we are not able to live with a 30-40 euro CO2 price.”
“There is one alternative, performance standards for the power sector,” he said. 
So when it comes to finding funding for CCS, as industry, “we don't lack objectives, we lack policy instruments,” he said.
 
Stan Dessens
Stan Dessens, conference chairman and a former Director General of the Energy Ministry of Economic Affairs for the Netherlands, noted that there are many companies who benefit from ETS being as low as it is, and many people who complain ETS is too low who would also like to see an alternative system.
Mr Dessens also noted that Chris Davies, a former Member of the European Parliament for North West England with the Liberal Democrat Party, had been the biggest advocate for Carbon Capture and Storage in the European Union. He lost his seat in the 2014 European Elections. He hopes that another MEP will replace Mr Davies as a CCS advocate. 
The most important energy topic in Brussels at the moment is “security of supply,” he said. “It would be quite easy in Brussels at the moment to get a billion euros for energy security.”
 
Ward Goldthorpe
Ward Goldthorpe, program manager for CCS and gas storage with the Crown Estate in the UK, noted that in the UK people no longer talk about ‘demonstration’, but talk about getting projects to the full scale. 
Mr Goldthorpe also noted that the UK has managed to get CCS projects running by concentrating on getting large scale projects running and developing a suitable system for investors (contracts for difference), rather than spending money on research. 
  
Jon Gibbins, UKCCSRC
Jon Gibbins, Professor of Power Plant Engineering and Carbon Capture with the University of Edinburgh, said he thought it was time we saw a range of second and third generation CCS projects, building on the first generation projects done so far.
Most of the CCS projects still on the table are first generation projects, he said.
But it is also interesting to note that the two UK projects which are moving ahead, White Rose and Peterhead, are comparatively new projects, with discussions only starting about a year before the FEED funding was confirmed last year. 
Mr Gibbins noted that CCS might take off earlier in developing countries, now organisations such as the World Bank and Asian Development Bank (ADB) are refusing to fund new coal power plants which don’t have CCS.
When it comes to who pays for CCS, Mr Gibbins thought it was the wrong question, since ultimately “it is the customers who pay.”
 
Stuart Haszeldine, University of Edinburgh
Stuart Haszeldine, professor of carbon capture and storage at the School of Geosciences, University of Edinburgh, said that in his view, there is still not enough public or political demand for carbon capture, so it is not rising high enough up the political agenda. 
“The public don't understand that we've got to make choices,” he said. 
Carbon capture and storage “has to be something which feels inevitable,” he said. “The politicians have to believe it is possible and can be done now. “Public perception feeds the government.” 
“If the Dutch government wanted ROAD they'd find EUR 250m by the end of the week,” he said.
Because politicians don’t think the public thinks there is a problem, they are not giving a signal to industry that it should be investing in CCS.
“Companies will do it when they have to,” he said. 
On the plus side, the industry has public ‘permission’ to store offshore, and the regulatory framework is there, he said. 
Having a “demonstration project will prove it can work,” he said. 
We need more understanding of how CO2 + EOR works, and we also have to develop a legal infrastructure for cross border CO2 transport, he said. 
It would be possible to start doing carbon capture in the North Sea now by using gas tankers, he said, rather than wait for the pipelines and offshore infrastructure to be developed. 
One audience member questioned whether the carbon capture industry should be attacking the wind sector harder, since it is winning all the government attention. “We [CCS people] have had a policy of not attacking renewables, but I think we're going to have to erode that false hope [in wind power]”, the audience member said. 
“I think it is tricky to attack renewables, you end up in the lap of the devil,” Mr Haszeldine replied.  
“You can just point out, renewables supply 4 per cent of energy. We love renewables but we need more. Do we want to live with 4 per cent of our energy?”
 
Brad Page, GCCSI
Brad Page, CEO of the Global Carbon Capture and Storage Institute (GCCSI) said that for carbon capture and storage overall, "you have to say this is a North American story", with 19 large scale CCS projects at various stages of development in the US and 7 in Canada. 
This compares with 4 in continental Europe, 13 in China, and 6 in the UK.
The European perspective is that UK and continental Europe "need to be treated differently, the trend is not in the same direction," he said. 
The number of large scale projects in continental Europe (including Norway) has sadly reduced from 14 to 4 in the past 3 years, whilst the number of projects in the UK has dropped from 7 to 6. 
The number of projects in the US and Canada has also declined in the past 3 years, from 25 to 19 in the US and from 9 to 7 in Canada.
However the number of projects in China has grown dramatically in the same period, from 6 to 13, he said. "This is what happens when you put CCS into a 5 year plan, you have a government deciding it wants to do something."
The first major power project with CCS should be Canada's Boundary Dam project at the end of September. "It puts to bed the argument that CCS doesn't work," he said.
"By early next year, the next major power project, Kemper County [Mississippi, USA] should come online, using its CO2 for EOR."
EOR is proving critical in making CCS work, he said. "You have to find these revenue sources."
So far, the only projects to store carbon capture in aquifers have been Norway's Snøvhit and Sleipner projects and Algeria's In Salah, all separating CO2 from natural gas wells (not from power stations). "Everything else has been EOR," he said. 
Mr Page presented a chart showing all of the CCS projects developed in the past and planned for the future, with each project shown as a dot, with the dot blue for EOR projects and green for aquifer or 'dedicated geological' projects. 
"Without EOR it would have been very hard to see green dots. EOR has held a big role in keeping CCS viable," he said. 
Mr Page described developments around CCS in Europe as 'a mixed bag'. Europe is perhaps the region of the world most focussed on climate change, and has a big interest in energy security. "We see advanced CCS in Europe at Snøvhit and Sleipner," he said. 
"But regulatory developments [in Europe] are disappointingly small. There's going to be some challenges making sure the next parliament comprehends the importance of CCS. We are not seeing CCS getting a specific policy focus except in the UK."
There are 3 components to the CCS business case:  technology, policy and understanding he said. "The technology exists and it works. But it's a technology question to lower the cost. But getting projects operational is critical to gaining a positive perception, he said. 
Mr Page included a quote from Fatih Birol, chief economist of the International Energy Agency, speaking to Wired Magazine for an article published in March 2014.  
"Outsiders should be grateful that China is weighing in," Mr Birol was quoted as saying. "Somebody needs to figure out how to capture and store carbon dioxide on a massive scale before it's too late. 
"I don't know of any other technology which is so critical for the health of the planet and at the same time for which we have almost no appetite. The only place it seems to be increasing is China."
Mr Page said he thought developing CO2 networks could be an important part of the solution of getting the costs down. "Hubs and networks are fast emerging," he said. 
According to GCCSI’s 2013 Global Status of CCS report, between 2008 and 2012, policy leader governments committed more than US$22billion in direct funding to large-scale CCS demonstration projects.

 

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