Carbon capture could yet be the unsung hero of a green economy

It’s the easiest, cheapest and quickest way to back up renewable power – and Britain is perfectly positioned to capitalise on it

Britain has made a dog’s dinner of its grand ambitions for carbon capture. The £20bn national plan was supposed to anchor the country’s energy policy, making all else possible in the rush towards clean power and clean industry.
As matters stand, no “final investment decision” has been made on any project. Government drift during the last spasms of the Tory civil war wasted critical time. Irritated global companies defected to America, where the Inflation Reduction Act has turbo-charged carbon capture and storage (CCS) with tax credits worth $85 (£67) a tonne.
“Everything was left hanging, so they turned to the US instead. We are now a year behind,” said Ruth Herbert, head of the Carbon Capture and Storage Association.
Labour has inherited a rollout schedule that has gone off the rails. A harsh report last week by the National Audit Office (NAO) said the project pipeline will “only provide a quarter of the carbon capture capacity needed to meet the Government’s targets for 2030”.
It leaves a bomb crater in Labour’s climate plan.
Ed Miliband, the Energy Secretary, intends to persevere with CCS, but that alone will not meet his 100pc clean power target this decade. He will have to commit more money, rush through a string of project deals, and take an unpopular political gamble on the most complex CCS experiment in the world. If he does not, he will preside over a big policy failure.
The NAO report said it “could be a risk worth taking”. I agree. Britain is tailor-made for carbon capture. It has coastal clusters of heavy industry linked to oil and gas pipelines in the North Sea that can seal CO2 in depleted wells at viable cost. Most of Europe has no such luck.
The scale is large enough both to store the UK’s emissions and the emissions of Europe’s industrial heartland, spinning a profit along the way. “It is a huge economic opportunity. We can help Europe decarbonise,” said Mrs Herbert.
German cement, fertiliser, and steel companies are already in talks to ship CO2 to Norway for storage in the Northern Lights project. The UK could corner most of this lucrative trade. “We could ship it from Rotterdam to Teeside or the Humber, and store it much more cheaply. It could be worth £5bn a year,” said Professor Jon Gibbins, head of the UK Carbon Capture and Storage Research Centre at Sheffield University.
The subject of carbon capture has become politically poisonous. Eco-purists loathe it with an unforgiving fury. They deem it a strategic deception to keep fossil fuels going, a delaying tactic by Saudi Aramco, Exxon, and other villains of green eschatology.
Hardline climate sceptics also hate it, deeming it a pointless waste of money. Although in this instance – unlike other green themes – they do not have the deep pockets of the oil and gas industry behind them.
Once you shut out this noise, carbon capture and storage is probably the easiest, cheapest and quickest way to back up renewable power.
If Labour succeeds in doubling onshore wind, tripling solar, and quadrupling offshore wind by 2030 – near impossible under the Reeves austerity doctrine, but let us generously allow 2033 – the UK will have 140 gigawatts (GW) of renewable capacity meeting most electricity needs, most of the time. We will have too much at certain times. This excess power will have to be turned into green hydrogen once electrolysis reaches prime time, a long way off.
The system will not require large volumes of baseload power at that juncture, beyond what will already be available from nuclear reactors at Sizewell B and Hinkley Point C, the Xlinks cable project from Morocco, and European interconnectors.
It will require “dispatchable” power that can be ramped up and down quickly. Batteries can plug the gap for a few hours, but the only realistic way to cover the seasons and get through a two-week winter doldrum is to fire up standby gas plants.
Carbon capture is by now a proven technology. Amine solvents have been used around the world for 30 years. You can bolt a post-combustion retrofit onto a gas-fired plant, capturing over 90pc of the CO2.
You lose a fifth of the energy as a “parasitic” loss, but better solvents are on the way. The next generation – Allam cycle, carbonate fuel cells, or metal organic frameworks – may slash costs by the early 2030s. For now it takes real money, but less than the future cost of carbon emissions in the OECD bloc.
Anybody who thinks that the UK will be burning large amounts of “unabated” gas in the 2030s is living in geopolitical cloud cuckoo land. Europe’s carbon contracts trade today at €69 (£58) a tonne. Analysts at BNEF expect the price to ratchet towards €150 by 2030 as carbon allowances are dialled down. The EU carbon border adjustment mechanism will hit in 17 months. Climate free-riders will be shut out of the market.
Obviously, Labour has no intention of taking that pariah course. It sees decarbonisation as a long-term accelerant of economic growth and a bonanza for British clean tech.
But it should take a close look at how that £20bn CCS budget is spent. The Institute for Energy Economics and Financial Analysis says the “overwhelming majority” of the effort is going into blue hydrogen (made from gas with CCS) rather than generating electricity.
“Support for abating emissions from the UK’s existing gas and bioenergy power stations is severely lacking,” it said.
Only one 900MW gas-fired plant will be abated by 2030. “We could do at least another six, but the Government needs to make a quick decision. Our members need certainty,” said Ruth Herbert.
Ultimately, over 10GW of gas plants could be abated with the right dispatchable power agreements.
RWE has 5.3GW lined up for possible CCS retrofits. SSE has parallel plans. You could retrofit 3GW of biomass plants, generating “negative” emissions.
Bingo: you have something close to 24/7, all-year-round, back-up power for a grid built on renewables. You are almost there on clean power by the early 2030s, at least until EVs displace the old car fleet and heat pumps take over.
“If we set up the right incentives, and have cross-party support, the supply chain will respond. We are already far ahead of most other countries, so let us have a crack at it,” said Mrs Herbert.
It costs serious money, but renewable power pays that back later by displacing most LNG gas imports. Besides, every other conceivable option costs more, unless one intends to walk away from the Glasgow Agreement sponsored by this country.
Should Labour pull the lever and get on with it? With caveats, yes. Carbon capture could yet be an unsung hero of the green transition.