Capturing Carbon and Building New Nuclear

This month’s article continues our review of the UK Government’s recent Energy Review. There are two main objectives that the UK Government has identified as being significant in future power generation; one being security of supply and the other being reducing carbon output. Last month we took a look at the carbon market and the effect the UK is having on total Global Emissions and what the UK plans to do about it in conjunction with Europe and the EU ETS. We explored distributed energy and the effect that could have on communities, as well as Oil, Gas and Coal and how they make up the UK energy mix.

This month we continue our theme and explore new technology in Carbon Capture and Storage (CCS) as well as new nuclear build, as outlined in the UK Energy Review 2006.

Carbon Capture & Storage
 

A relatively new technology, CCS is seen by some as the breakthrough required to clean up carbon emissions and prevent them from causing more damage to the environment.

In essence the idea is to capture the carbon at source and transport it to a place where it can do no damage, i.e. underground in geological formations and thereby prevented from entering the atmosphere. Very simple in its raw state, but in reality there are many obstacles to overcome.

For decades coal has been a major contributor in meeting the UK’s electricity needs, producing on average a third of power generated over recent years. Over the winter of 2005/6 fully one half of power produced came from coal generation because of high gas prices. Coal fired generation adds flexibility to the UK’s energy system and is not easily going to be replaced.  This causes a problem therefore for a government that is committed to reducing carbon emissions, but enjoys the benefits of having a heavy polluting power generator at hand for hard times.

Table 1: annual carbon emissions from 500MW electricity generation plant. Source DTI 2006

As the table above shows, emissions from conventional coal is nearly three times that of natural gas, but if the carbon is captured and stored then emissions reduce drastically.

There has been and continue to be significant improvements to the efficiency of coal fired power generation, which falls in line with the Carbon Abatement Technology (CAT) strategy. The UK Government has set aside £35 million to support this new scheme and the first calls for proposals are expected in September 2006 and will be worth £10 million. The focus being on the pre-commercial demonstration of key components and systems to support carbon abatement technologies.

If Carbon Capture and Storage proves to be economic and technically feasible on a large scale it could have a major impact on global carbon emissions. The expectation is that 80 – 90% of carbon emissions would be removed from the plant producing those emissions and as 70% of the UK’s power generation comes from burning fossil fuels, CCS looks like a promising compromise for the UK to be able to continue producing power from fossil fuel generation and drastically reduce its carbon output.

To date CCS has yet to be demonstrated in an electricity generation setting, but the process is already in use in various places around the world, including the Great Plains Synfuels Plant in North Dakota, where carbon dioxide is captured and transported by pipeline to Weyburn in Canada where it is used to increase the recovery of oil from an oil field.

As CCS has great potential in reducing world emissions the UK is keen to use the skills found in its Oil and Gas industries as well as the depleted oil and gas fields to develop this technology if possible, but there are some challenging regulatory issues from both the UK and abroad that need to resolved. A number of proposals are already emerging from the electricity industry and as interest is increasing in CCS the UK Government now has to look at developing a regulatory framework for CCS that would enable operators to bring forward projects that are safe, minimise environmental risks and assign responsibilities appropriately between public and private sectors.

Regulatory Framework for CCS 

In 2006 the UK Government set up a CCS Regulatory Task Force designed to clarify existing UK regulation and its application, identify the need for new regulation, and develop proposals for new regulation as required in the following areas:

• the licensing of carbon dioxide storage sites and activities offshore;

• decommissioning and long-term liabilities associated with storage facilities; and

• licensing and regulation of onshore facilities, including carbon capture, transport and storage and “capture-ready” plant.

·        The UK has a particular interest in storage under the seabed because of all the available capacity in depleted oil and gas reservoirs as well as saline aquifers, but The London Convention of 1972, instigated to protect the marine environment from the dumping of wastes into the ocean and seas worldwide, causes uncertainty as to what CCS projects are legally allowed. Part of the UK Government process will be to allow carbon storage beneath the seabed. Similarly the OSPAR Convention, designed to provide protection to marine life in the North East Atlantic, is also being rewritten to allow carbon storage.

The UK is working closely with Norway in developing CCS in the North Sea. Jointly sharing costs and overcoming difficulties by examining the need for new infrastructure of pipelines. Together they will also examine aspects of an international regulatory regime as well as rules for CCS in the EU ETS.

So sure is the UK that this is a way forward in drastically removing global emissions they have instigated the EU-China collaboration with China in a bid to obtain Near Zero Emissions Coal (NZEC) by 2020, by leading the way and funding the first part of the project. The UK is also in discussion with the Indian government along similar lines.

Economics 

Even though it is necessary for legal and regulatory frameworks to be in place, CCS will only ever become reality if it is also technically feasible, environmentally sound and economically viable. Evidence from existing projects suggests that CCS will be both technically feasible and has an acceptable level of environmental risk. It is also unlikely that there will be a shortage of suitable sites for carbon storage, so the main issue for CCS may well be its economic and commercial feasibility. As this has not yet been demonstrated on a commercial scale in connection with power generation, there is uncertainty over the scale of the costs involved to capture, transport and store the carbon along with infrastructure costs to make it happen.

It is expected that the UK will use carbon dioxide to enhance oil recovery from depleted fields that are still active in the North Sea. Along with possible tax benefits or some other reward scheme designed to encourage reducing carbon emissions, CCS should be taken into account by generators when they make investment decisions.

Until this year countries could not use CCS to help them meet their Kyoto targets. But the UK government has worked hard with the International Panel on Climate Change (IPCC) to develop new guidelines on accounting for greenhouse gas emissions and now emissions from CCS projects can be reflected in emissions reporting. Although there are still outstanding issues which prevent CCS projects from being accepted as Clean Development Mechanism (CDM) projects at present, the UK government is working with its EU partners to reach an agreement within the United Nations Framework Convention on Climate Change (UNFCCC). Similarly CCS is still not accepted within the EU ETS and the UK Government is pushing this issue with the European Commission. A communication about this and other CCS matters is expected in Autumn 2007.

New Nuclear Build 

Nuclear power stations currently supply around 20% of the UK’s electricity needs, but as many are scheduled to close over the next two decades they will leave a significant deficit in low carbon producing power stations. More fossil fuel burning generators would have to be built to fill this gap, which would not assist a government that is trying to reduce its emission output rather than increase them.

Since the 2003 Energy White Paper the UK Government now feels that the economics of nuclear look more favourable than it did. Leaving it to the private sector to make commercial decisions on investment in nuclear, the UK government is making stronger signals that it is happy to support new nuclear build, than it has done for many years.

‘Nuclear power stations are designed so that there are a number of different safety systems, with multiple back-ups, resulting in a robust system for responding to abnormal operation and fault conditions. The current safety assessment principles state that safety equipment should be actuated automatically, and that no human action should be necessary for at least 30 minutes.’

Nuclear costs by stage. Source DTI 2006

The chart above indicates that the majority of the cost involved is in the capital, not the fuel, unlike gas fired generation where around 71% of its levelised cost is in the fuel. Despite the doubling of uranium prices since 2000 it reflects only a minor impact on final fuel costs.

How safe is New Nuclear?

Nuclear power stations in the UK must be designed and operated to high standards to prevent accidents from occurring. In fact safety standards have developed so much over the years to the extent that the International Atomic Energy Agency (IEAE) has safety standards that reflect worldwide good practice. The HSE have recently revised their principals to incorporate the latest changes.

The UK does have an excellent safety record, with the most serious incident being the 1957 Windscale accident, which involved a military reactor of very early design. Nuclear technology has improved greatly over the years, making safety a high priority in its design, construction, operation and decommissioning.

It is argued that radiation levels from new nuclear facilities would be very low and therefore acceptable and that discharges are only permitted by authorisation of the relevant environmental regulator.  On the whole the UK public is likely to receive much more radiation from medical exposures than from a normal operating nuclear power station.

Security, taking into account today’s climate, is expect to remain at its current levels and therefore strong measures are expected to be built in to any new nuclear power stations, rather than added on as required. Although there is a proliferation risk, the UK government considers this to be low in new nuclear build.

Nuclear waste, the legacy of this age, is expected to be significantly less by volume in new build than that produced by earlier plants. The Nuclear Decommissioning Authority (NDA) is setting a UK strategy for effective decommissioning and cleaning up of sites, whilst the Committee on Radioactive Waste Management (CoRWM), formed in 2003, is busy recommending the long term management  strategy for the UK’s higher radio active waste. In April, the CoRWM concluded that buying the waste in a deep geological repository was the best approach and that new build waste, which raises practical issues about size, number and location of facilities, would need to be properly assessed.

The UK government has made it clear that any new nuclear build would have to come from the private sector. This includes taking care of the costs for nuclear waste and decommissioning when the power station comes to the end of its life.  The following principles have been set out by the UK government to assist the private sector in making arrangements for the costs involved in new build decommissioning and waste management.

Principles: The Risk Management Framework – Decommissioning

• There should be an upfront assessment of decommissioning costs.

• Full responsibility for decommissioning costs to be retained by the private sector operators).

• Protection will be given to the public sector regarding credit risk and reduced reactor life.

• The framework should be robust and transparent through time.

• These principles will form the basis of arrangements which will apply consistently to all new build operators and reactor types. 

Principles: The Risk Management Framework – Waste 

• Delivering and paying for a long term waste management solution for legacy waste is a responsibility that falls to the public sector. Any long-term waste management solution developed by Government will factor in waste from new build.

• There will be an assessment of how new build affects the cost of delivering the national waste management solution.

• The private sector will pay a charge covering the full and equitable costs of managing the waste generated over the expected life of each new power station.

• The level of this charge will be informed by work on the Government’s long term waste management solution.

• The commercial nature of the arrangements in relation to waste disposal will incentivise participants to operate power stations in a way that seeks the optimal balance between performance and waste generation.

• Protection will be given to the public sector regarding changes in reactor life and other factors.

• Provision of interim storage over the life of the plant will be the responsibility of the operator.

• The framework should be robust and transparent through time.

• These principles will form the basis of arrangements which will apply consistently to all new nuclear build operators and reactor types. 

The UK is in a time of change and the way that the electricity generation mix evolves only time will tell. Many new projects are under way to bring in more gas from abroad, to develop renewable energy sources and find new and innovative ways to generate electricity efficiently and at the same time reduce carbon emissions and keep supplies secure.

It has been the intention of the writer to offer an impartial report on the UK 2006 Energy Report, but it is open to individual interpretation. If you would like to read it for yourself, it can be downloaded here.

Paul Cassar MJMEnergy Ltd