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An Emissions Performance Standard as the regulatory alternative to capture-readiness October 2008 | By Karla Hill and Tim Malloch
The contribution by Karla Hill and Tim Malloch criticises the EU's proposed vague definition of "capture ready" power stations, and proposes a California-style Emissions Performance Standard as a workable, effective alternative. As preeminent climate scientist James Hansen reminds us so powerfully, climate science now demands that we cease burning coal for electricity generation unless the carbon emissions are captured and permanently stored “if humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted.” As part of the solution, it is imperative that CCS is demonstrated and deployed as quickly as possible. The scientific evidence on climate change is unequivocal and the regulatory response must be equally certain. The California greenhouse gas emissions performance standard (EPS) provides a model for regulatory certainty in the transition to a low-carbon electricity system. In the UK and at European level, a similar regulatory approach is needed to avoid the regulatory uncertainty of a capture-ready approach and the risk of a power generation sector locked in to long-lived, high-carbon infrastructure. The California EPS means that new investment in baseload power generation serving California consumers must be with power plants that have emissions no greater than those of a combined cycle gas turbine plant. The California EPS is aimed at reducing the state’s carbon emissions, and is seen as an important interim step to protect the taxpayer and electricity consumers from the future costs of a carbon price in the current absence of a statewide cap on emissions. In the meantime, investors have certainty and can choose from a range of options that meet the standard. For coal power, the immediate effect of the standard is that any new coal power plant would have to present a reasonable, economically and technically feasible plan that CCS will operate from the outset to meet the California EPS. The capture-ready problem The UK government is now consulting on whether it should allow a new generation of capture-ready coal power stations to be built in the UK. The capture-ready definition is based on the European Commission’s proposal to allow member states to consent to new coal power stations: "Member States shall ensure that all combustion plants with a capacity of 300 megawatts or more… have suitable space on the installation site for the equipment necessary to capture and compress CO2 and that the availability of suitable storage sites, suitable transport facilities and the technical feasibility of retrofitting for CO2 capture have been assessed." This proposed Article 32 of the draft CCS directive is one of the most controversial provisions in the EU climate and energy package. A coal plant with CCS technology would capture and safely store the vast majority of its CO2 emissions. But a capture-ready plant will not. It will emit millions of tonnes of CO2 into the atmosphere until the expensive CCS technology is retrofitted. Moreover, Article 32 proposes a very low and undemanding standard that requires energy companies to take no substantial action to reduce their CO2 emissions or change their investment decisions. To be capture-ready a new coal power plant will only need to have empty space next to it for the CCS equipment to be fitted in the future, and to complete technical assessments of potential storage and transport and the technical feasibility of retrofitting carbon capture. The concept of capture-readiness is inherently vague with no guarantee that CCS will ever be retrofitted. It also fails to account for the possibility that CCS will not work or be commercially viable with the risk of locking in a high-carbon system and its serious implications for climate goals, including the viability of maintaining the EU ETS and meeting emissions reductions targets at EU and UK levels. The proposed provision for capture-readiness is part of a weak overall approach to CCS at the EU level, which will delay crucial demonstration of, and investment in, CCS technology. Only a combination of political and market conditions will ensure private sector investment in CCS technology. Energy companies and their backers will not voluntarily commit to expensive CCS technology on a large-scale as the carbon price established under the EU ETS in its current form is not enough to deliver CCS on its own. In the meantime, 50 more coal power stations are planned across Europe. The Stern review on the economics of climate change makes it clear that “carbon pricing on its own is not sufficient to reduce emissions on the scale and at the pace required”, and “it is critical that governments consider how to avoid the risks of locking into a high carbon infrastructure, including considering whether any additional measures may be justified to reduce the risks”. Supplementing the EU ETS with a carbon EPS would provide energy companies with a clear investment signal that would stimulate investment in CCS technology. An EPS would work at the UK or EU level as part of an overall plan for decarbonising electricity and for deployment of CCS. Other measures, including increased financial support for CCS demonstration projects, a stricter cap to ensure emissions reductions take place within the EU, and full power sector auctioning of EU ETS allowances, are also necessary to encourage energy companies to invest in CCS technology as part of a low-carbon portfolio. Capture-readiness will not force energy companies to make important long-term investment decisions, and risks delaying the introduction of CCS in Europe and worldwide. The EU ETS needs to be supplemented with the clarity and certainty of a regulatory standard for electricity generation. The case for a carbon emissions performance standard as an alternative to the uncertainty of capture-readiness is compelling on both economic and environmental grounds. Download PDF: An Emissions Performance Standard as the regulatory alternative to capture-readiness Download PDF: A last chance for coal: Making carbon capture and storage a reality |
