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CO2 Capture and Storage or Contest for Competitive States. Where does Romania fit in?

www.cencraiova.ro

Publish date: July 13, 2009

Bucharest – Never among the finalists of any contest, Romania is now struggling to be one of the 12 selected countries for a CO2 capture and storage (CCS) demonstration project.

According to specialists, in Romania, during the next decade at least, coal will continue to play an important role in energy production, as 40% of the national energy production is based on coal. Moreover, Romania will primarily invest in coal power plants because within the Energy Strategy of Romania, coal is considered to last for another 100 years while gas will be depleted in maximum 20 years.
Therefore, the need for security of energy supply and the obligation to comply with the European Union Directives make CCS an obvious proposition.

Good direction…

Acknowledging the importance of investments in the energy field and receiving information about projects already developed in other European countries, Romanian CCS specialists have already expressed their interest in obtaining the financing for a demonstration project. Nevertheless, a proposal has not yet been addressed to the European Commission and nobody from the Government has shown public support towards the initiatives of researchers.

Studies have shown that Romania has 229 industrial installations that participate in the EU Emission Trading Scheme (ETS) and that 64 of them are potential locations for CCS projects. Researchers stated that Oltenia region (3 coal-fired power plants are located there – CEN Craiova, Rovinari and Turceni), Braila and Deva are the best places for a demonstration project in Romania. The representatives of CEN Craiova have expressed their intention of becoming involved in a potential demonstration project. They consider that the distance between the power plants in the region (Craiova, Rovinari and Turceni) is very small (only 30 km) and therefore the transportation costs would be modest. Furthermore, the area disposes of oil reservoirs that can be used for storage of CO2 in two ways: inject the CO2 in empty oil fields or doing it for enhanced oil recovery (EOR) in existing oil fields – squeezing out oil that is hard to reach by injecting CO2. The second technique thereby gives revenue to the project and may attract some oil and gas companies with fields in the region, so that a consortium can be established. In addition, some specialists say that studies on oil fields are more numerous and more comprehensive than the ones dealing with saline aquifers – which is the other type of geological storage sites.

The National Agency for Mineral Resources (ANRM) has announced that "Romania has a very good geological CO2 storage potential in oil and gas fields and saline aquifers". Constantin Sava from the Geoecomar Institute estimates the storage capacity to be about 18.5 billion tonnes (Gt) CO2 in saline aquifers and 4 Gt in depleted oil fields.
Scientists from research institutes like ISPE, ICEMENERG and Geoecomar declare that they are ready to start working on a CCS project, although the Government hasn’t given a clear response regarding their level of support or interest. They have the skills, they have the people, the EU offers knowledge sharing with other CCS projects, but the main barrier remains the cost of CCS.

Representatives from the Ministry of Economy state that the “electricity price is already perceived as difficult to bear by consumers. If we add the disappearance of subsidies to coal, and if we add the supplementary costs of CCS or purchasing of CO2 emission allowances from 2013, we can obviously see a big pressure on the price of electricity.” This is probably why no politician has come forward in talking about CCS or in bringing up a discussion about money, especially because presidential elections will be held in autumn 2009. However, during a conference organized in Bucharest recently by Eurelectric, specialists from all over Europe stated that the time for cheap energy has passed.

Still, Romania seems well placed not to have to pass on the CCS bill to consumers given the availability of EU funding. It is a major beneficiary of EU structural funds to reduce income disparities. Yet Romania has difficulties spending the money – the so-called “absorption rate” is only 9 percent overall. In energy, no structural funds have been committed whereas the situation is better in the field of environment with an absorption rate of 39 percent according to a 2008 report made by the company KPMG. The reasons for that are very clear – hesitation, long evaluation periods, delays in the elaboration of project proposals and lack of communication between the authorities in charge of structural funds. If these obstacles are overcome, there should therefore be available EU structural funds aimed to help fill the funding gap for a CCS project. 

This article was contributed by Ana Voitinovici (Bellona CCS Advisor in Romania)

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