Carbon Capture and Storage –
A ROADMAP FOR SCOTLAND
Progress Report – May 2011
Produced by Scottish Government Energy Markets Unit in
conjunction with Scottish Enterprise
Purpose
The Carbon Capture and Storage Roadmap for Scotland, published in March
2010, set out the Scottish Government’s and Scottish Enterprise’s view for a
timeline of: what needs to happen and by when; who is involved and what the
main drivers and milestones are. The Roadmap, which can be found at:
http://www.scotland.gov.uk/Publications/2010/03/18094835/1 also highlighted
the main areas where progress was needed:
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funding
demonstrations
transport network planning and development
regulation/legislation
storage assessment
engagement and public acceptance
economic opportunity and skills
This paper aims to provide a brief update on activity in each of the above
areas over the past 12 months. A summary highlighting the achievements is
presented first followed by further detail of each achievement including links to
the various outputs.
SUMMARY
ACHIEVEMENTS, MARCH 2010 – MARCH 2011
Funding
 Supporting major Scottish projects for the EU New Entrants Reserve in
2010-2011.
 Working with UK Government on the support for 4 demonstrator projects
across the UK including the Electricity Market Reform plans for carbon
floor price, Contract for Difference / Feed in Tariff and Emissions
Performance Standard. Ensuring clear Scottish discretion is retained.
Demonstrations
 Longannet now effectively the only viable CCS demonstration project that
can be funded by the UK Government’s £1bn CCS competition.
 Scottish Government lobbied effectively for the UK Government to support
a gas-fired CCS plant as part of the demonstration programme will allow
Peterhead to test CCS on gas.
 Scottish Enterprise commissioned an Economic Impact Assessment on
each proposed Scottish based CCS demonstrator project (Longannet,
Peterhead, Hunterston).
Transport network planning and development
 SCCS / ARUP won EC tender to create blueprint for an EU-wide carbon
transport network.
 North Sea Basin Task Force published study into North Sea cross-border
CO2 transport and storage.
 Scottish Enterprise developing a ‘CCS Cluster Investment plan’ to
consider options to develop CCS infrastructure in Scotland.
 New EU CCS Regions Network launched May 2011 with key focus on
permitting and licensing of CCS projects across EU and development of
EU CCS network.
Regulation / Legislation
 Formed CCS Regulatory Group - meets every 3 months.
 CCS Regulatory test exercise held in August 2010, followed by CCS
Regulatory Test Toolkit published in conjunction with SCCS and Global
CCS Institute.
 Rolling out Toolkit to industry - Scottish Government has had meetings
with EU Project Network in Brindisi, ZEP Government Group, Berlin
Forum, EC CCS Regulators’ Information Exchange Groups.
 Established Programme Monitoring Board to ensure delivery of CCS
demonstration projects within funding timescales.
 ‘Draft Electricity Generation Policy Statement’ sets out analysis and policy
framework for our future electricity generation mix, including clear role for
CCS on baseload, progressively fitted to 2030.
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Working on transposition of the EU Directive on the Geological Storage of
Carbon Dioxide - three regulations have been agreed by Scottish
Parliament.
Storage Assessment
 ‘Progressing Scotland’s CO2 Storage Opportunities’ report (published
March 2011) delivers new insights on Scotland’s storage capacity.
 SiteChar project (launched January 2011) will further site characterisation
of a multi-store site in the Moray Firth (UK North Sea).
Engagement and public acceptance
 ‘Toward a Public Communication and Engagement Strategy for Carbon
Dioxide Capture and Storage Projects in Scotland’ report published by
SCCTS Devt. Study.
 SiteChar project will advance public awareness.
Economic opportunity and skills
 Scottish Enterprise appointed a CCS Champion in Scotland.
 Scottish Enterprise Energy Team conducted foresighting exercise.
 Scottish Enterprise developing CCS Scotland profiling document
highlighting Scotland as a globally competitive CCS location and partner.
 Scottish Enterprise updating Scottish CCS Supply Chain Map.
ACHIEVEMENTS IN MORE DETAIL
1. Funding and Demonstrations
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The UK Energy Bill received Royal Assent on 8 April 2010 and proposed a
levy on generation to be charged in order to fund 4 CCS demonstrator
projects across the UK. During the summer of 2010, DECC carried out a
market sounding process for the UK’s CCS Demonstration Programme.
Following the Market Sounding exercise, DECC and the Treasury have
reviewed support for CCS demonstrations and have concluded that the
levy will not be required and future demonstrations projects 2-4 will be
funded via general taxation. Scottish Government is seeking clarification
from DECC on the role of Scottish Ministers in determining future financial
support for the demonstrations in Scotland.
We welcome, however, the proposals in the Energy Market Reform for
long term financial support for CCS deployment via the Contract for
Difference / Feed in Tariff mechanism. We will be working with the UK
to ensure Scottish discretion in this process.
On 8 November 2010, UK Government announced their decision to
support a gas-fired CCS plant as part of the demonstration programme.
The Scottish Government lobbied strongly for this move, since reducing
emissions from gas will be as important as those from coal to meet our
climate change targets and maintain security of supply. With this
announcement, stations such as Peterhead will be able to test CCS on
gas. Longannet is now effectively the only viable CCS demonstration
project that can be funded by the £1 billion.
On 18th February 2011, Charles Hendry stated that subject to the quality
and value for money of Scottish Power’s Longannet bid for the UK CCS
competition it is hoped that a contract be awarded for the first
demonstration project in the Summer 2011.
Through the Scottish European Green Energy Centre (SEGEC), we are
engaging with the European Commission and partner countries in
supporting policy development and securing project funding for Scottish
CCS projects.
The New Entrants Reserve (NER 300), launched on 9 November 2010
with a closing deadline of 9 February 2011, will provide substantial
financial support for at least eight projects involving carbon capture and
storage (CCS) technologies and at least 34 projects involving innovative
renewable energy technologies. The aim is to drive low carbon economic
development in Europe, creating new 'green' jobs and contributing to the
achievement of the EU's ambitious climate change goals. The European
Investment Bank (EIB) is collaborating with the Commission in the
implementation of the programme.
Scottish Enterprise commissioned an Economic Impact Assessment of
each of the three proposed Scottish based Carbon Capture and Storage
(CCS) demonstrator projects. The study findings indicate a potential for
strong positive impact on GVA, employment and supply chain
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development in Scotland resulting from the delivery of Scottish projects at
Longannet, Peterhead and Hunterston.
The findings of the study were used by developers to support their
applications to DECC for inclusion in the short list of projects from the UK
recommended for entry into the first call for NER300 funding. The findings
will also be used to inform the creation of a strategy and prioritized action
plan for the development of the Scottish CCS Supply Chain.
The Scottish Government are currently working with UK Government to
assess Scottish projects that have bid into the EU New Entrants Reserve
in 2011-11.
Three major projects have been submitted in Scotland :
Longannet; Peterhead and Hunterston covering a range of technologies
and storage options.
2.
Transport network planning and development
We have achieved a great deal in this area since the publication of the
Roadmap last year including:
The Scottish Centre for Carbon Storage / Arup study, carried out
between February 2010 - October 2010, was commissioned by EC
Directorate General Energy (DG-ENER) for European Commission. The
study built on previous studies of storage capacity and focussed on CO2
transport infrastructure - looking at future EU CO2 network planning
including North Sea. It was - published 19 October in Berlin and aimed to
identify a “blueprint” for transport infrastructure at 2030 and 2050, for each
high, medium and Low capture scenarios and matching sources to sinks.
http://www.geos.ed.ac.uk/sccs/publications.html
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In June 2010, the North Sea Basin Task Force published a new study
into North Sea cross-border CO2 transport and storage. The study
highlights the potential for North Sea countries to become natural leaders
in the development of CCS in Europe and finds that rapid deployment of
large scale low cost CO2 infrastructure by 2030 is technically feasible and
necessary for full deployment of CCS.
The CCS Regions group for EU
discussed network planning
coordination and transboundary projects at their meeting in November
2010 in Edinburgh. They agreed that overall EU-wide knowledge sharing
on CO2 transport was potentially very useful and important to CCS
development. The regions Group has now met 3 times since 2010 and has
secured agreement from the EC to support the development of the
network to complement the activity of the EU’s CCS Project Demonstration
Network. This will be launched in Rotterdam in May.
A joint UK and Scottish Government consultation on the pipelines and
storage sites used for the transport and storage of carbon dioxide, in
which the Scottish Government are part, was carried out between
December 2010 and February 2011. This will now be followed with the
laying of relevant regulations. Part of this consultation sought views on
what organisational structure is best suited to the development of CCS
infrastructure.
Scottish Enterprise are currently carrying out a study entitled “CCS
Cluster Investment Plan”. The main objective of this study is to develop
and consider options for the development of CCS infrastructure in
Scotland. Phase 1 is focused around the existing proposed CCS
demonstrator projects, assessing the likelihood of shared usage of
infrastructure including the setting out of any economic benefits from such
an approach. Estimated costs will also be produced. Phase 2 will consider
these issues beyond the initial demonstrator phase, and will look at
options in the longer term. Initial findings from Phase 1 will be available by
April 2011 with a plan to complete the Phase 2 work by mid 2011.
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Regulation / Legislation
In anticipation of several large scale CCS projects coming forward in
Scotland, the Scottish Government formed a Regulatory Group in 2009
to consider the various permits required to robustly consider the entire
chain of CCS activities from Capture, Transport, Storage through to final
Decommissioning. The Group continues to meet every 3 months to map
the permits required and ensure the necessary legislative provision is
aligned with the EU Geological Storage Directive.
The key objective of the Regulatory Group is to encourage the exchange
of permitting knowledge and enable a structure and coherent approach to
processing CCS project applications. An outcome from this Group was to
test the regulatory system by taking a CCS project application through
every stage of the approval process in a regulatory test exercise. This test
exercise maximised learning opportunities by involving the organisations,
government departments, regulatory agencies and NGOs. This was
conducted in August 2010 and the output report was published.
Following the success of this test exercise the Scottish Government in
conjunction with the Scottish Centre for Carbon Storage published a CCS
Regulatory Test Toolkit. This Toolkit was funded by the Global CCS
Institute and has been endorsed by the European Commission as a model
of best practice for regulation that could be used by other member states.
We are currently working with the Romanian Government and with the
European Commission to roll this out to other Member States.
Another outcome from the Regulatory Group has been to set up a
Programme Monitoring Board. This Group first met in January 2011
and its overall objective is to ensure that Government, regulators and
developers agree a timetable for project delivery that is consistent with the
requirements of funders and with the statutory processes set out in
regulations. This objective will be reconciled with a strong focus on
community engagement, considering and recommending how to ensure
that communities affected by the project are properly engaged by
developers and regulators across the whole CCS activity chain. The
Programme Monitoring Board is now meeting to discuss a common
approach to regulating and consenting the Longannet CCS
demonstrator, which is likely to be the first to be funded and built in the
UK during 2011.
Scotland’s National Planning Framework 2 identifies a need for new
baseload generating capacity to replace the power stations programmed
for closure over the next 20 years.
We have a clear regulatory
commitment that new coal fired power stations in Scotland must fit CCS to
a minimum of 300MWe of their capacity from day one of operation. This is
consistent with the UK Government and means that new unabated coal
power stations cannot be built in Scotland. This demonstrates the strength
of our commitment to CCS. New gas power stations need to be built
carbon capture ready.
The Scottish Government recently published a draft Electricity
Generation Policy Statement which sets out our analysis and policy
framework for our future electricity generation mix. This envisages that
80% of Scotland’s electricity demand will be met by renewables by 2020,
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backed up by 2.5GW of thermal generation, progressively fitted with
carbon capture and storage to ensure decarbonisation of the whole power
sector by 2030. This is consistent with the targets set out in the Climate
Change (Scotland) Act 2009.
We are currently working on the transposition of the EU Directive on
the Geological Storage of Carbon Dioxide (2009/31/EC). This involves
laying Scottish Statutory Instruments, the first three of which have been
approved by the Scottish Parliament and will come into force ahead of the.
transposition date of 25 June 2011. The regulations include:o
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1.
Amendment of the Energy Act (into force 1/4/11)
Licensing of CO2 (Scotland) regulations (into force 1/4/11)
Third Party Access and transfer of obligations (in progress)
Consequential Modifications (into force 25/6/11)
Chapter 7 Amendments
These regulations flow from the provisions of the Energy Act 2008, which
already designates the Scottish Ministers as the competent authority under
the Directive for CO2 storage in Scotland. Three of these Regulations
which have been laid before Parliament (at the time of printing) are :The Energy Act 2008 (Storage of Carbon Dioxide) (Scotland)
Regulations 2011
http://www.legislation.gov.uk/sdsi/2011/9780111011911/introduction
2.
The Storage of Carbon Dioxide (Licensing etc) (Scotland) Regulations
2011
http://www.legislation.gov.uk/ssi/2011/24/contents/made
3.
The Environmental Liability (Scotland) Amendment Regulations 2011
http://www.legislation.gov.uk/ssi/2011/116/contents/made
Relevant links / publications (relating to Regulation / Legislation):Regulatory Test Exercise Output Report
http://www.scotland.gov.uk/Topics/Business-Industry/Energy/Energysources/traditional-fuels/newtechnologies/SGactionCCS/CCSRegulatoryExercise
CCS Regulatory Test Toolkit
http://www.scotland.gov.uk/Topics/BusinessIndustry/Energy/resources/Publications/CCSRegulatoryToolkit
Draft Electricity Generation Policy Statement 2010
http://www.scotland.gov.uk/Publications/2010/11/17094217/0
Energy Act 2008
http://www.legislation.gov.uk/ukpga/2008/32/contents
4.
Storage assessment
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The second phase of the Scottish CCTS Development Study,
published on 14th March 2011 assessed the potential storage capacity
of the North Sea for carbon dioxide in more detail. The report
estimates that the Captain Sandstone located under the Moray
Firth could store up to 100 years worth of CO2 output from Scotland’s
power industry. The study shows the continued commitment of
government, industry and academia coming together as a partnership
to deliver new insights on the potential for carbon capture and storage
projects and a link to this report can be found at :
http://www.scotland.gov.uk/Topics/Business-Industry/Energy/Energysources/traditional-fuels/newtechnologies/SGactionCCS/ScotlandsCO2Storage/Q/EditMode/on/Forc
eUpdate/on
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A number of potential future projects include:
 CASSEM 2 (CO2 Aquifer Storage Site Evaluation and
Monitoring) – looking at aquifer storage injection worth
£2.5m over 3 years.
 SIMCOLAB – involving working with France on a test
injection laboratory.
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SiteChar is a project part funded by the EU's Seventh Framework
Programme (FP7) - starting 1 January 2011 for 3 years. It consists of
several work packages including: a full-chain characterisation of a
multi-store site in the Moray Firth (UK North Sea); advancing public
awareness and investigating public perceptions of CCS and acting as
the independent regulator for licence applications and economic
assessments. Broadly, the objective is to bring our level of knowledge
of CO2 storage in the North Sea to a position where we can begin
injecting, advance public awareness and investigate concerns on CCS.
There are 19 partners across several EU countries contributing to this
project and the Scottish Government is committing £100,000 towards
it.
Details
on
this
project
can
be
found
at
http://www.ufu.de/en/home/sitechar.html
5.
Industrial Engagement and public acceptance
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The Thermal Generation and CCS Industry Advisory Group has met
several times during the past year and details of meetings can be
found
at:
http://www.scotland.gov.uk/Topics/BusinessIndustry/Energy/resources/working-groups/energy-advisoryboard/thermalgenerationandCCS
A toolkit entitled “Toward a Public Communication and Engagement
Strategy for Carbon Dioxide Capture and Storage Projects in Scotland”
was recently published by the Scottish CCTS Development Study.
This report is a review of research findings, CCS project experiences,
tools, resources and best practices. A link to this report can be found
at http://www.geos.ed.ac.uk/sccs/publications.html
Sitechar project as detailed above will also advance public awareness
of CCS.
We are also working directly with DECC and ZEP on the EU
Government Communicators’ Group.
Over the past two years TUV NEL, which is based near Glasgow, has
been leading research in the field of CO2 flow measurement on behalf
of the UK Government’s National Measurement Office (NMO). The
company also developed and manages the CCS Club which involves
70 key stakeholders throughout industry, including policymakers,
regulators, power stations, CCS demo plants, capture technology
manufacturers, oil and gas sector, academia, research and test
institutes, metering/sampling manufacturers, measurement specialists,
geologists, transportation/pipeline companies and support services.
6.
Economic opportunity and skills
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The work of the Scottish Energy Advisory board highlights significant
employment growth and skills requirements within the wider energy
and low carbon economy. The EAB is working with partners to address
the challenges of making sure we have the right skills, in the right
place, at the right time. As such, the Board tasked Skills Development
Scotland to lead on the development of a Skills Investment Plan to
support the sector. SDS launched the plan on 2 March 2011 and a
copy
can
be
found
at:http://www.skillsdevelopmentscotland.co.uk/media/331209/sds_ener
gysip_final.pdf
The Scottish Enterprise Energy Team recently conducted a
foresighting exercise, completed October 2010, which highlighted the
major opportunities for Scottish companies. This recognised the need
to develop a sustainable and profitable CCS industry, for which there
will be a requirement to ensure that supply chain, infrastructure and
skills set are fit for purpose.
Scottish Enterprise announced in September 2010 an agreement with
Glasgow based TUV SUD NEL to drive forward the development of
carbon capture and storage (CCS) opportunities in Scotland. As initial
step in this contract, TUV SUD NEL Senior Consultant, John Morgan,
has been seconded to work alongside Scottish Enterprise's energy
team and act as CCS Champion in Scotland. His role will specially
focus on establishing close links with major industry and academic
partners, as well as the broader stakeholder community, with current
involvement or potential interest in development of CCS and advise
them of future opportunities. He will work towards building strong
working relationships with potential funding partners to ensure that
maximum available funding in support of CCS is attracted to Scotland.
Scottish Enterprise are developing a CCS Scotland profiling
document that highlights Scotland as a globally competitive CCS
location and partner. It highlights Scotland’s 40 + years oil and gas,
subsea, reservoir and well engineering expertise, the vast storage
potential of the North Sea in depleted hydrocarbon reservoirs and
saline aquifers, and the world leading academic and industrial research
position within Scotland.
Scottish Enterprise are also updating the Scottish CCS Supply Chain
Map that was developed in 2006 that outlined Scotland’s strengths and
weaknesses in terms of Design, Build, Operate & Decommission.
Current plans include supply chain development activities (awareness
& partner brokerage) focused on the potential opportunities that may
arise from the proposed 3 Scottish based full chain CCS demonstration
sites. The data-set outputs from the Economic Impact Assessments will
also inform their planned work on supply chain development for the
sector.
FORWARD LOOK
o Through connections set up by the Global CCS Institute, the Scottish
Government will engage with representatives from Romania and
Canada who have expressed an interest in using the CCS Regulatory
Test Toolkit. We are also working with the European Commission (DG
Energy and DG Clima) to promote the Toolkit amongst other member
states and amongst networks of EU energy and environment
regulators.
o We will finalise the remaining secondary legislation and regulations in
relation to the implementation of the EU Directive on the Geological
Storage of Carbon Dioxide ahead of the deadline of 25 June 2011.
o The Programme Monitoring Board will continue to meet every two
months in preparation for the announcement of funding from the UK
CCS competition for the Longannet plant. If either of the other two
proposed CCS plants in Scotland is successful in securing funding
under the EU New Entrants reserve competition, they will also be
considered by a similar Monitoring Board.
o The UK Government has recently proposed significant changes to the
functioning of the electricity markets in the UK. The Electricity Market
Reform package could create a substantive move towards a target-led
approach for the UK market, with far greater government intervention in
driving the decarbonisation objective. The reforms are likely to
substantially alter the framework for investment in the power sector in
the UK, and a range of measures have been proposed to support the
carbon price, provide funding for a range of low carbon technologies
(including CCS), and to drive down emissions. Many of these policies
fall within areas that are the responsibility of the Scottish Government,
and we are working closely with the UK Government to agree the
future framework, with the clear objective that it must incentivise low
carbon generation and meet our 2030 decarbonisation goal. The
Scottish Government’s initial response can be found here:
http://www.scotland.gov.uk/Topics/BusinessIndustry/Energy/Infrastructure/Grid-Connections/EMR-consultationUK/Initial-SG-response