While Drax’s withdrawal does not mean the project will be halted, it serves to highlight the difficult and uncertain regulatory and investment environment CCS projects are confronted with. The news of Drax’s decision to stop investments into the White Rose come as a setback, especially given the project’s obtaining of EU funding under the NER300 last year and its potential to turn ‘negative emissions’ from concept to reality, but is not to be placed at the door of CCS.
“A stable, financial and regulatory framework for CCS in the EU is urgently needed. One obvious example in that direction are the envisaged Innovation- and Modernisation Funds, which if properly designed could be the core to fostering the roll-out of infrastructure for the technology’s deployment. Member States need to step up to the challenge of taking their own long-term decarbonisation challenges seriously. The Funds can help kick-start projects and help roll-out in countries with lower financial capacity, but ultimately Member States must sort out a framework together with the Commission” argues Jonas Helseth, Director at Bellona Europa.
The UK has arguably come the furthest in linking EU and Member State level support for CCS, but still has so far failed to provide full regulatory clarity to its industries. The Drax decision has to be seen in this context, along with the general failure of the EU electricity market design. In order to survive, most traditional utilities (including Drax) are seeking capacity payments and/or increasing their biomass share to gain renewable subsidies. Until CCS deployment provides a similar alternative case for utilities, governments will continue to be blackmailed «to keep the lights on» with capacity payments and vital climate technology like CCS lack investment.
In July 2014 the European Commission announced that up to EUR 300 million in funding would be allocated to the White Rose project as part of the second round of the NER300. This was celebrated as a significant milestone in the deployment of CCS technology in the EU.
While Drax’s withdrawal of financial support will be a challenge for the project, it is important to note that this does not ultimately translate into the cancellation of the project as a whole. However, it puts pressure on the UK government, as well as the European Commission, to intensify efforts in fostering a CCS-conducive environment. Bellona has outlined its vision for the necessary action required to set a new pace for CCS in Europe in the recently launched Executable Plan for CCS in Europe, and has shared its recommendations for the design of the Innovation Fund in a recent feedback response to the Commission.
White Rose – promising for climate, energy security, and jobs
The White Rose, a 426MW CCS power plant, is expected to burn coal to meet the equivalent power needs of over 630,000 homes, while capturing 90% of the CO2 produced by the plant and transporting it by pipeline for permanent storage deep beneath the North Sea seabed. In addition, engineers are hopeful that the project can serve as a hub for future CCS projects in the region, which would allow the UK north east’s heavy industry to reduce its CO2 emissions while creating up to 6,000 jobs.
Possibility of delivering negative emissions
What is more, the White Rose project is also planned to be the first large-scale oxyfuel project in the world with the ability to use biomass fuel for co-firing. What this means is that, in addition to capturing nearly 90% of CO2 emissions, given the biomass fuel is sustainable and the right circumstances prevail, zero or even negative emissions could be attained. The need for CCS in combination with biomass (Bio-CCS) in delivering negative emissions, has been repeatedly highlighted by a number of influential bodies and reports, including the IPCC’s 5th Assessment Report. Likewise, Bellona regards Bio-CCS as a crucial component in the fight against climate change, and therefore saw the allocation of NER300 funding to White Rose as an important step in the right direction.