Don’t forget hydrogen in the carbon capture debate

Last month’s budget from George Osborne made headlines because of the Chancellor’s plans to boost the UK housing market.

However, hidden in the detail was the announcement that the Government had selected the gas-fired power station at Peterhead in Aberdeenshire (owned by Shell and SSE) and the coal-fired power station at Drax in North Yorkshire – the UK’s single largest emitter of CO2 – as the two preferred bidders in the £1 billion competition to encourage the development of Carbon Capture & Storage (CCS) technology in the UK.

In essence, CCS is environmentally friendly technology that can capture harmful CO2 emissions, to prevent them escaping into the atmosphere. The Peterhead project involves capturing around 90% of the CO2 from part of the existing power station before transporting and storing it in a depleted gas field beneath the North Sea. The second project, which involves Alstom, Drax Power, BOC and National Grid, comprises capturing CO2 and storing it in a saline aquifer beneath the southern North Sea. A further two projects have been selected in reserve.

The Government signaled that it will make a final investment decision in early 2015 for up to two projects. But, noticeable by its absence, was the fact that the Government’s plans did not consider the important role that hydrogen has to play in the CCS debate, both in the UK and further afield.

Indeed, CCS technology has yet to operate with power generation on a commercial scale and to date the technology’s potential to generate significant hydrogen (for use as a fuel) using ‘pre-combustion’ technology has been overlooked. However, such ‘pre-combustion’ technology could today be utilised in fertilizer, chemical and power plants, all of which produce significant quantities of CO2. In these instances, fossil fuel is partially oxidized in a gasifier, producing syngas (CO and H2) which is then converted into CO2 and H2.

There are currently a number of pre-combustion CCS projects in operation across the world: five in North America, two in Europe and one in Africa. These are mostly constituents of natural gas processing plants.

At the same time, CCS technology more generally is moving on apace, indicating the potential that the process offers for containing and diverting carbon emissions. Skyonic Corp, a carbon capture technology developer backed by BP and ConocoPhillips, recently obtained funding for its commercial project which will ‘mineralise’ CO2 emissions into chemical by-products, including hydrochloric acid for use in shale gas extraction.

On the political front, however, complicating the issue of carbon capture is whether the EU should postpone the auction of carbon allowances to industry. This auction threatens to push down the price of carbon, undermining the economics of CCS technology. A group comprising some of Europe’s biggest companies called the EU corporate leaders group (which includes Germany’s Eon, France’s Alstom and Sweden’s Ikea) have backed the postponement because they have invested in CCS technologies which require higher carbon prices to be commercially viable.

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