We can’t let Kemper slow the progress of carbon capture and storage

Work on the most ambitious carbon capture and storage (CCS) plant in the world at the Kemper County Energy Facility has been suspended. While ultimately it wasn’t CCS that saw the USD 7.5 billion effort unravel last week, this may be of little comfort to its backers and investors. Unfortunately, the Kemper experience may have created a legacy with damaging implications for the future of CCS and so-called “clean coal” technology.

This is bad news to anyone who recognizes the importance of CCS in supporting a manageable and sustainable transformation of the global energy sector. The role of CCS goes well beyond coal and even the power sector – it is one of few technology options for deep emission cuts across cement, steel, chemical and other industrial sectors. Kemper was one model for the future of this technology.

The Kemper facility is located in a region with almost 4 billion tons of low quality, high-moisture content lignite. The original concept was to use this resource in a highly efficient and low emissions way through a new, proprietary integrated gasification combined cycle (IGCC) technology. The coal would be gasified, the CO2 separated and captured, and the resulting syngas used to run a combined cycle gas turbine for power generation. Up to 3 million tonnes of CO2 would have been captured using established, commercially available solvent technology before being transported for injection into mature oil reservoirs for enhanced oil recovery (EOR).

Yet CO2 capture was not the issue for Kemper. The issue was that the rapid scale up of a new IGCC technology from pilot to a 585 MW plant proved to be far more complex and challenging than anticipated. Seven years and several billion dollars later, this top-flight CCS plant will now be run as a natural gas plant at more than five times the capital investment.

Kemper is not the first high-profile failure of an IGCC with CCS plant. The original US FutureGen project had set its sights on a large-scale IGCC before it was cancelled in 2008. Another abandoned project in Australia, ZeroGen, also aimed to build an IGCC with CCS plant, before detailed engineering (including of the CO2 storage) revealed an almost AUD 7 billion price tag. Arguably, Kemper has now tested the veracity of those estimates from the other side of the world.

More recent and promising developments of projects using IGCCs can be found in Japan. For example, the Osaki CoolGen project has taken a more measured approach to scaling-up IGCC deployment, commissioning a 166 MW oxygen-blown IGCC plant in March this year. The plant has already completed 500 hours of successful testing and the project owners plan to add CO2 capture at a later stage. The potential attractiveness of IGCC is its very high efficiency and low emissions relative to other coal technologies, and the ready CO2 stream generated pre-combustion. Nevertheless, the prospects for the technology are uncertain, and the developments at Kemper only amplify concerns.

Unfortunately this development overshadows recent CCS success in the power sector, including the commissioning of the Petra Nova project in Texas earlier this year – remarkably (for a CCS project) – delivered on time and on budget. Petra Nova is the second, and much larger, project to retrofit post-combustion capture technology to an existing coal-fired power station, with costs reportedly around 20% lower than the world-first effort at Boundary Dam in Canada. The Petra Nova approach may not have all the bells and whistles of Kemper but it has proven to be a more reliable and affordable option.

Even more critically, Petra Nova and Boundary Dam have demonstrated that there is a solution to one of the most complex energy and climate dilemmas we face: a large global coal-fired power fleet that today provides around 40% of the world’s electricity. This fleet is the youngest it has been for decades, with more than 500 GW added since 2010, mostly in emerging economies.

To suggest these new and in many cases highly efficient plants could simply be shut down in a timeframe consistent with climate goals fails to appreciate the political, social and economic realities. Retrofitting CCS will need to be a key strategy in many regions, and is something that should be targeted with early CCS deployment efforts.

CCS is also not just a power-generation technology. Emissions from the industry sector account for around a quarter of global CO2 emissions. This is not a sector that can be overlooked if we are to have any prospect of achieving climate targets, and CCS is one of few technology options available for meaningful emissions reductions.

Fortunately, there are lower-cost opportunities for CCS in some industrial and fuel transformation sectors, where a readily available stream of CO2 is available, including in natural-gas processing. Major refineries and petrochemical facilities are often located close to mature oil fields which offer economically attractive storage opportunities. Harnessing these lower-cost industrial opportunities for CCS will be essential to accelerate CCS deployment in the near-term. China is embracing this approach, having just announced construction of its first large-scale CCS project in the coal-chemicals sector and with seven further projects under early development.

There are now 17 large-scale CCS projects operating around the world, with at least one more due to be commissioned this year. It is vital that we continue to grow this portfolio – and at a much faster rate – and the developments in Mississippi are a significant setback in that regard.

The end of Kemper will not be the end of CCS. And it cannot be the end of our efforts to tackle emissions from the coal-fired power fleet if we are serious and realistic about the global energy transformation.