Carbon capture and storage (CCS) is unlikely to significantly reduce emissions from coal-fired power stations, according to the Smith School of Enterprise and Environment at the University of Oxford.
In its report on stranded assets in the coal industry, the institute said: “It is our view that CCS is unlikely to play a significant role in mitigating emissions from coal-fired power stations. Deployment of CCS has already been too slow to match IEA and IPCC scenarios. CCS compares unfavourably with other power sector mitigation options, especially considering that CCS also reduces plant efficiency, exacerbating existing merit-order challenges for conventional generators. CCS should remain an attractive option for industrial and process emitters that have few other mitigation options, and may be significant as a long-term option for delivering negative emissions with BECCS (bioenergy enhanced CCS).”
The institute said the big six energy providers in the UK had thus far avoided the “utility death spiral” seen in other countries, although E.On and nPower’s parent companies have suffered in Germany. RWE posted losses US$3.8bn and E.On split its operations into two companies in response to falling share prices across the German big four energy producers.
The utility death spiral refers to the impact on distribution network businesses caused by distributed energy resources both causing and profiting from raising retail electricity prices, to the detriment of traditional power utilities. ”Distributed energy resources have yet to erode power loads to the same extent. However must-run renewables and increasing carbon prices further suppressed coal asset utilisation rates, which dropped 7.8 percentage points in 2014 to 51.2%,” it said.
From the archive: Three-minute warning on CCS puts a cloud over all UK investment