1.4 CCS project development

1.4.1 How long does it take to progress a CCS project through the development cycle to operation?

Engineering industry experience in large infrastructure projects such as those that could be installed with CCS suggests that seven to ten years will be required between undertaking pre-feasibility studies through to commissioning.

Therefore, the projects identified in this study, and perhaps new projects identified by 2013 are likely to represent the pool of commercial scale, integrated CCS projects that could meet the G8 objective.

10

years to design, permit and build a fossil-fuel power plant and other large industrial facilities such as steel mills and cement factories

Contrasted with the stated aim of the G8, industry views the timeframe involved in the CCS project cycle to be in the order of:

  • 10 years to design, permit and build a fossil-fuel power plant and other large industrial facilities with CCS such as steel mills and cement factories;
  • 20-30 years of operation and injection of CO2 before plant closure is considered; and
  • 20-100 years or more to monitor a CCS site post-injection.

1.4.2 Is CCS a coal and power industry only issue?

No. The owners and industry representatives of coal fired power facilities have a significant interest in the development of CCS initiatives. However, the tightening international regime for large emissions reduction by 2050 will dictate that CCS be utilised by a broad cross section of the resources and industrial sectors.

In order to meet the G8 objectives, CCS must also be applied to other large stationary emission sources such as from the steel, cement, aluminium and fertiliser sectors. From this study there is little evidence of these industries devoting the funds or commitments required to address long-term CO2 reduction management from commercial scale, integrated CCS projects.

1.4.3 Is EOR a distraction to CCS development?

Yes, in part. Although there has been essential experience gained in pipelining and injecting CO2, the majority of the CO2 EOR experience has yielded very little information on CO2 storage, monitoring and risk assessment.

There is also conjecture over whether storage for EOR purposes is considered long-term, and suitable sites for EOR are limited from a geographic and capacity perspective relative to geological storage. However, given the paucity of existing data, measurement, monitoring and verification (MMV) must be incorporated into future EOR projects for learnings to be gained and shared in order to build capacity.

In order to meet the G8 objectives CCS must also be applied to other large stationary emission sources such as from the steel, cement, aluminium and fertiliser sectors

Beneficial reuse (principally EOR) may also present a short term bridging opportunity to demonstrate the integration of CCS, possibly with coal-fired power plants, as revenue associated with EOR can partially offset CCS costs. However, the business case for EOR is inherently a function of oil prices that can fluctuate widely over time. Furthermore, financially, fossil-fuel power generation plants represent large sunk costs that require long payback periods. The potential to operate an associated EOR site may not exist for a similarly long period. Therefore, the potential viability of this model of combining EOR with fossil fuel power generation to supply CO2 may be limited.