Carbon capture and storage (CCS) is an unproven, risky and expensive technology. State and federal governments have put huge amounts of public funds into CCS research for years, in the hope it will provide the solution to the greenhouse pollution generated by coal fired power stations.

Here in Victoria, where we have three remaining coal fired power stations, some are hoping these plants can be retrofitted to use CCS technology.

There are also a number of companies pursuing ‘new coal’ initiatives which will be reliant on CCS to be viable. Most notable of these is probably the Kawasaki Heavy Industry ‘coal to hydrogen’ project planned for the Latrobe Valley

Despite hundreds of millions of dollars of investment, it would appear that we are still not close to even knowing if or when CCS might be commercially viable at any kind of scale. It is also not clear whether CCS will be able to safely contain greenhouse emissions from coal power stations for an indefinite period of time.

What is CCS?

According to the Earth Resources division within the Victorian government:

“Carbon capture and storage (CCS) involves capturing carbon dioxide (CO₂) that would otherwise be emitted into the atmosphere from sources such as power stations and industrial processes, and transporting it to a suitable storage site for safe, long-term storage deep underground. Carbon capture and storage technologies are being investigated around the world, because they have the potential to significantly reduce greenhouse gas emissions.

A fully established CCS chain usually consists of four actions:

• The CO₂ is captured (usually separated from coal or oil, such as within a power station or oil or gas refinery).
• The CO₂ gas is then compressed into a liquid-like form.
• The CO₂ is transported along a pipeline to a suitable injection site.
• The CO₂ is injected deep below the ground (at a depth of greater than 800 metres) into a secure geological formation for long-term storage. Typical storage formations are areas of porous rock underlying thick layers of impermeable rock, similar to oil and gas reservoirs”.

The Australian newspaper reports that:

“The global rollout of CCS projects has been slow and many have been abandoned.

The most high-profile project is the Boundary Dam power station in Canada. Captured CO2 from the Boundary Dam project is injected into nearby oil wells to enhance ­recovery.

Supporters of CCS say the slow rollout reflects the high capital costs, risk and lack of government support compared with subsidies for wind and solar.

In total, Australian governments have invested at least $590m in CCS (recent analysis suggests this is now $1.3 billion – see below).

Projects include the National Low Emission Coal Initiative, Carbon Capture and Storage Flagships, the Low Emissions Technology Demonstration Fund and the Coal Mining Abatement Technology Support Package”.

Overseas projects

Many proponents of CCS hold out the Boundary Creek project as ‘proof’ that commercial scale CCS is either getting close or already occurring. As noted in a news item recently:

“The Boundary Dam Power Station in Saskatchewan, Canada, uses CCS technology and has been open since October 2014 …. However, Boundary Dam is not a shining example of CCS feasibility. The plant has suffered technical and design issues since coming online, it's been shut down for long stretches of time, and in its first year (at least) it operated at 40 percent capacity. The plant also doubles the price of power in the region”.

Costs of the CCS technology used at Boundary Creek have continually blown out and it is not clear whether the project will be continued. It is anticipated that a decision will be taken about the future of the plant by the end of 2017.

Another ‘flagship’ CCS project held up as being ‘best practice’ is the Kemper project in Mississippi. However, has been plagued by problems that managers tried to conceal, by cost overruns, and questions of who will pay. The New York Times has a report on the project here: Piles of Dirty Secrets Behind a Model ‘Clean Coal’ Project

There are additional reports on problems associated with the project here: Kemper IGCC, Delayed Again, May Not Be Economically Viable, and here: Kemper: Leading US ‘clean coal’ project admits it can’t afford to burn coal.

What is happening in Victoria?

According to The Australian newspaper:

The CarbonNet Project “has been working to ­establish a world-class, large-scale CCS network close to Australia’s highest emissions coal-fired power stations.

The network would bring ­together multiple carbon dioxide capture projects in Latrobe, transporting CO2 via a shared pipeline and injecting it into deep underground, offshore storage sites in Gippsland”.

CarbonNet is managed by the Victorian Department of Economic Development, Jobs, Transport and Resources, and is funded by the Australian and Victorian governments. It is funded through a $100 million grant (the federal government put in $70m and the state contributed $30m).

CarbonNet says that in Victoria, the CO2CRC Otway Project has injected and stored over 65,000 tonnes of CO₂.

“Research has shown the geology of the offshore Gippsland Basin, next to the Latrobe Valley, is ideally suited for deep storage of captured carbon dioxide. There are porous rocks deep underground covered by an impervious rock layer that stops stored carbon from escaping. The geology needed for CCS is similar to the natural reservoirs that trap oil”.

The CarbonNet project is ­exploring the potential to capture and store one to five million tonnes of CO2 a year, with the possibility of scaling up.

In March 2017, a state government tender was released for advice on seismic testing in the Gippsland Basin (for offshore areas near the 90 Mile Beach). This is to test ‘the potential for establishing a CC&S network in the Gippsland Basin’. It is not yet clear how this would be funded. Given previous government assistance for CCS projects, we assume the government would pay for the seismic testing phase, with a view to finding a private company to run the project should it be deemed viable.

The coal to hydrogen project

Kawasaki Heavy Industries (KHI) is wanting to establish a plant in the Latrobe Valley to make liquid hydrogen from brown coal. Since the 2011 Fukushima disaster, which led to a dramatic drop in electricity production from its nuclear plants, Prime Minister Shinzo Abe has been promoting a plan to transition much of that countries economy to reliance on hydrogen. This includes the transport sector (vehicles), energy use in the residential sector and power stations. The plan is to showcase this new hydrogen technology when Tokyo hosts the 2020 Olympic games.

As noted by journalists at Reuters: ‘using Australian coal requires removing its climate-changing carbon and burying it in old oil or gas wells there’. The KHI project would require CCS to be consistent with the state government’s commitment to reduce carbon emissions to net zero by 2050. We have to assume that the KHI would therefore require the CarbonNet CCS project to be functioning at commercial scale for it to go ahead. Given that the seismic testing to truth up whether the Gippsland Basil is suitable for CCS won’t happen until late in 2017 (under the earliest scenario), it is very difficult to imagine the KHI project could be working in time for the 2020 Olympics.

What’s wrong with CCS?

With recent job losses in the Latrobe Valley as a result of the closure of the Hazelwood plant, some are arguing that CCS could yet provide the chance for coal to remain as a key element of the Valley’s economy. Commercially viable CCS could be used in three ways:

• To allow new uses of coal (eg coal to gas or coal to fertiliser),
• To allow existing power stations to be retrofitted to use CCS and hence greatly reduce their greenhouse gas emissions, or
• To allow new build coal fired power stations to produce electricity without carbon emissions.

Environmentalists are often criticised if they don’t support CCS as an option for reducing greenhouse gas emissions. Yet there are a number of serious concerns about whether this technology will ever be commercially viable.

Key concerns are:

1/ Cost to the taxpayer.

As noted above, Australian governments have already spent hundreds of millions of dollars to see if this technology will be viable, with nothing to show for it. Yet renewable energy is viable and ready to go, and would be a much better investment in terms of public funds.

Recent estimates are that about 200,000 tons of CO2 has been captured and sequestered in CCA projects for power generation in Australia at a cost of over $A1 billion since 1998. The cost per tonne sequestered was about $4,300 AUD. Michael Barnard says that of the $1B, “about $700 million of this was funded by the Australian government and $300 million by the industry itself”.

Having received a huge amount of tax payer funds for research and development (R&D) over the years, it is now time for proponents and the fossil fuel industry to pay for all further R&D, feasibility studies and business plans if they wish to pursue the development of this technology.

A report from The Australia Institute, called Money for nothing, says that the Australian Government has put $1.3 billion of taxpayers’ money towards CCS initiatives since 2003, with 'zero large scale operational projects to show for it'.

The Institute says: "despite years of generous taxpayer funding, there are no large-scale CCS projects operating in Australia and no planned coal CCS projects at any stage of development".

Retrofitting existing power stations: Retrofitting of existing power stations is expected to be more expensive than ‘new build’ power stations that are already hooked up to CCS. This is significant for Victoria, as we now have three aging coal fired power stations.

CCS, if it was to work, would be more expensive than renewables like wind energy.

The estimate of the cost to retrofit the Yallourn power station in the Latrobe Valley with CCS technology is between $7.25 and $5.77 BILLION. Who would be paying for this? State government may continue to fund ‘feasibility’ studies of the technology, but ultimately it can be expected that energy consumers will foot the bulk of the bill. (Source: Retrofitting CCS to coal, enhancing Australia’s energy security. CO2CRC, 2017).

New coal fired power stations: Australia’s chief scientist Dr Alan Finkel has said will be the only way new coal could be built, if we are to abide by our national and international emissions reduction commitments – is to build them with CCS. Bloomberg New Energy Finance says that the cost of this is difficult to assess, but comes up with a cost of $A352/MWh – or around three times the cost of wind or solar.

According to journalist Sophie Vorrath:

“Not only does this research put clean coal firmly in the ‘economically ridiculous’ basket, but it puts lie to the Coalition’s argument that building new coal in Australia will help deliver that “affordable electricity supply.”

2/ Reports of CO2 leakage.

CCS proponents claim that greenhouse gases will be safely stored underground ‘indefinitely’. Yet there are already instances of test projects having problems with leakage of CO2. Check Source Watch for additional information.

3/ Potential for contamination of drinking water.

A 2010 study by Duke University scientists, "Potential Impacts of Leakage from Deep CO2 Geosequestration on Overlying Freshwater Aquifers" found that leaks from carbon dioxide injected deep underground could bubble up into drinking water aquifers near the surface, driving up levels of contaminants in the water tenfold or more in some places. The study was based on a year-long analysis of core samples from four drinking water aquifers.

4/ Putting off investing in the real solutions.

Renewable energy and energy efficiency are tested, commercially viable technologies that are already being deployed at mass scale. Climate science tells us that time is running out if we want to avoid catastrophic climate change. Lets get on with a rapid transition to 100% renewable energy, and stop investing public funds in a technology which may never be commercially viable, in the hope it might be available one day.

5/ CCS won’t solve the emissions problems of coal fired power stations

Most CCS projects so far only captures a percentage of a power plant's output, meaning it is impossible to get to zero emissions coal fired power stations.

Additionally, CCS at this point doesn't address the fine particulate pollution that occurs as a result of coal mining, and which is known to cause cancer and other health problems in nearby residents.

Further details on these concerns are available here.

We note that CCS may work with some industrial processes (see for instance here). However, FoE remains strongly opposed to further investment of public funds for CCS in any way associated with coal.

Our recommendations

1/ The government must stop using public funds on coal. FoE believes that the forthcoming coal policy (currently being prepared by the Victorian government) should:

• rule out any further allocations of coal for new uses or the development of coal infrastructure,
• rule out any further allocation of public funds for fossil fuel developments or research, including experimental technologies and carbon capture and storage (CCS),
• lift or cancel all existing coal allocations in the Latrobe Valley and all remaining exploration licenses for coal outside the Valley, and
• commit the government to a workable and funded plan in place to diversify the economy in the Latrobe Valley and start the orderly phase-out of our oldest and dirtiest power stations. As the recent closure of Hazelwood shows, we need government planning for inevitable closures, rather than allowing market conditions to decide when future closure happens,
• include an assessment of the public health impacts of coal mining, to help provide a comprehensive understanding of the costs and benefits of using this resource.

2/ Wind up the CarbonNet program.

3/ Any remaining funds in the CarbonNet program should be re-allocated to job creation in the Latrobe Valley. In the short term we urge the government to fund the Earthworker factory planned for Morwell.

4/ If the state government is not prepared to rule out the possible future use of CCS, it should fund a proper feasibility study to determine exactly what it would cost to retrofit CCS to a specific existing Latrobe Valley station. Funding for this should come from remaining CarbonNet allocations. For $200,000 it would be possible to get a comprehensive study which would quantify how much it would cost to capture and store the CO2 currently emitted by the plant.