Carbon capture and storage (CCS) in the power generation sector offers a pathway to net zero, while maintaining the energy diversity and security thermal-based generation provides.

The International Energy Agency (IEA) believes CCS technologies are vital given fossil fuels still dominate the world’s electricity supply, and power generation is the largest emitter of CO2 in the energy sector. It says the idea that CCS is ‘high cost’ simply ignores the bigger picture.

Though initial capital outlay may be greater now, the ability to draw on gas or coal power, while mitigating CO2, can help steady energy markets during the transition. Power CCS costs are also expected to fall over time as it matures.

Moreover, coal-fired power is not going away any time soon. Last year, China, which accounts for half of all global coal use, committed to rolling out two new coal-fired power plants every week. Most of its CCS work so far is in industrial settings, rather than electricity.

But while technically feasible, Power CCS is far from a mature technology.

In September 2022, there were just 30 carbon capture facilities in the world, according to a report from the Global CCS Institute, mostly attached to industrial plants.

The retrofit of Unit 3 at SaskPower’s Boundary Dam coal-fired plant in Canada a decade ago shows what can be done. It delivers 120 megawatts (MW) of base-load capacity and has prevented more than five million tonnes of CO2 entering the atmosphere.

In the U.S., NRG Energy’s Petra Nova CCS power project, another retrofit, was halted in 2020 because of low oil prices at the time.

Levelized cost of CO2 capture by sector and initial CO2 concentration, 2019 (shown in USD/tonne).

New-build plant

The first new-build integrated Power CCS plants are on their way.

The U.K.’s energy strategy includes a £20 billion commitment to CCS over two decades, with funding for three facilities in northeast England — one will capture carbon from a gas-fired power plant, two others from hydrogen production. The CO2 will be piped under the North Sea for storage.

NZT Power, a joint venture of BP plc and Equinor, will be the world’s first commercial-scale gas-fired power station built with carbon capture, storing up to two million tonnes of CO2 per year.

Intended as part of a decarbonized industries hub for the Teesside area and to kick-start the U.K.’s hydrogen economy, the 860 MW plant will begin operations in 2027 if it is receives its FID in 2024.

Both BP and Equinor are already active in CCS in the oil and gas sector. Equinor is progressing two other U.K. projects — a gas-to-hydrogen plant with CCS near the city of Hull, and another gas power plant with CCS at Keadby.

Other large-scale Power CCS projects in Europe and Asia are in the pilot or planning stages.

Economic case

Yet there remain question marks over commercial viability.

A report by the Institute for Energy Economics and Financial Analysis (IEEFA) suggested that CCS could have “unsustainable implications” on electricity prices.

Its findings show the levelized costs of electricity for gas and coal generation with CCS are at least 1.5-2 times above renewable alternatives, such as solar and wind, though significantly less than pumped hydro.

Critics argue funds could be better spent on renewables or other decarbonization strategies and suggest that CCS encourages investment in fossil fuels.

But the energy trilemma is more than simple economics, and includes security of supply, with fossil fuels underpinning electricity output in countries around the world, as the IEA notes.

Again, CCS costs are expected to fall in time as more projects are built and experience grows, and comparisons are complex given the array of capture technologies and other variables.

This reality check was echoed by the U.K.’s energy security and net zero secretary, Grant Shapps, presenting his country’s new energy blueprint recently: “Unless you can explain how we can transition [to net zero] without oil and gas, we need oil and gas.”

Accelerating decarbonization

Considering the level of historic investment in thermal capacity is another aspect. Around one-third of today’s coal and gas plants were built in the last decade, which means retrofitting with CCS can allow them to continue operation and avoid early retirement costs, the IEA notes.

CCS could even accelerate plans to decarbonize the electricity system, according to analysis in 2022 commissioned by the U.K.’s SSE and conducted by LCP Delta.

The U.K. government’s proposed emissions reductions from electricity for 2035 could be fast-tracked to 2030 by combining offshore wind ambitions with more aggressive CCS deployment, it notes.

This would require 7-9 gigawatts (GW) — equivalent to 10-12 plants — of CCS compared to the current commitment of at least one CCS plant mid-decade, the analysis shows.

SSE Thermal is also a partner in Equinor’s proposed Keadby project.

Power CCS also presents opportunities to transition to a hydrogen economy, a long-term strategy, while faster decarbonization further reduces exposure to volatile fossil fuel prices.

In the U.K. example, officials hope it will position the country as a frontrunner in an emerging niche, with expertise that can be exported worldwide, including China. It means progress on NZT Power — and especially its cost profile — will be keenly watched around the globe.