Scientists from the University of California, San Diego published a study investigating a diverse portfolio of successful and failed carbon capture and storage projects in the US. It concluded that while many projects essential to commercializing the technology have been started, more than 80% of them have ended in failure.
The study entails the largest sample of US CCS projects ever examined, with the input from the people who managed them in the past. The researchers came up with 12 crucial traits that describe why commercial carbon capture and sequestration (CCS) projects become a failure or a success.
Reality Assessment
According to the study, commercial CO2 capture that is deployed in power plants to separate CO2 for use in EOR has been here since the 1970s. The technology is mature now, yet CCS project developments are moving at an overwhelmingly slow pace.
The US saw a big push in the 2000s to commercialize CCS with billions of dollars invested in dozens of industrial and power plant capture projects. However, most ended in failure – largely before the final investment decision (FID).
According to the US National Energy Technology Laboratory (NETL), more than 300 CCUS projects of all types have been proposed or built globally. Half of these (149) intended to store some or all of the captured CO2.
However, more than 100 of the 149 CCS projects have been terminated or placed on indefinite hold. They were also originally scheduled to be operational by 2020. The projects were planned to capture more than 130 million tons of CO2 per annum which is more than three times the amount of CO2 captured today.
One important highlight is that the projects in the power sector experienced around 90% failure. For comparison, more than 70% of the proposed gas processing projects with CCS have succeeded and are still operational today. That points to the conclusion that the probability of failure depends on the type of project.
Carbon Capture Projects 12 Determinants
The study uses empirical models and expert assessment to determine the 12 main factors determining the project results. The factors are diverse, including engineering economics, finance, and political economy. They are as follows:
- Plant siting
- Capture technology readiness level
- Capital cost
- Employment impact
- Credibility of revenue
- Credibility of incentives
- Population proximity
- Institutional setting
- Burden of CO2 disposal
- Regulatory challenges
- Public opposition
- Industrial stakeholder opposition
The experts, whose opinions were obtained, only put an emphasis on the significance of the credibility of incentives and revenues. The projects had to obtain unconditional incentives upfront to provide a safe financial footing. That is the main reason why the majority of effective projects used their captured CO2 gas for enhanced oil recovery.
What supports the CO2 for EOR case is that there are only a few other feasible businesses that can buy CO2 for other usage. According to the study, apart from selling to oil and gas companies, the gas is not really a useful commodity.
The researchers also referred to current credible policies like the expansion of the 45Q tax credit that serve as incentives. The 45Q offers a secure revenue stream to companies if they store the CO2 emissions in deep geologic repositories. However, the policy also incentivizes the enhanced oil recovery but at a lower cost for a ton of sequestered CO2.
Another statement that impacts the success of the project refers to plant siting. Positioning the project on brownfield sites entails less site preparation, less extensive development of new infrastructure, and reduces regulatory burden. Also projects that enhance employment in the local regions are more likely to form coalitions in their favor.
Conclusion
The study is an advanced examination of CCS that combines a historical record and expert judgment. It also comes at a crucial point, when plans are being followed up with financing across the carbon capture industry and the success rate of investments will determine the impact of CCS in the coming years and decades.
