Achi news desk-
Its aim is to use £20 billion of investment to store 20 – 30 million tonnes of CO2 per year and support the creation of 50,000 jobs by 2030.
These are clearly ambitious targets for a technology that has not been used on this scale anywhere in the world before, but it is hoped that major investment, the UK’s unique geology and its skills in oil and gas are well placed to do so.
CCUS works by capturing carbon dioxide (CO2) before it reaches the atmosphere and storing it underground in the spaces left by oil and gas extraction. The plan is for CO2 produced by industrial processes, such as steel production or power generation, to be captured at source and then transported, typically through legacy pipes previously used for oil and gas pipelines, to stored in geological reserves.
Attempts to stimulate large-scale competitive investment in CCUS were made in 2007. However, those plans were canceled four years later because projects were insufficiently planned and could not be funded within the £1 budget. billion which was agreed at the time.
The more recent strategy shows more regulation and planning, and a number of basic projects are beginning to develop.
The Energy Act 2023 is the basis for many aspects of strategy. The Act provides that Ofgem will be the regulator for the transport and storage of CO2.
It also provides that transporting CO2 by pipeline for geological storage will require operators to hold a licence. These licenses will determine the allowable revenue that a transport and storage operator can obtain based on their efficient costs. Ofgem will be responsible for issuing the licenses and enforcing or modifying their conditions.
CCUS will be subsidized by regulated business models that will provide the vehicles for investment. These are expected to act as a type of ‘contract for difference’ (CfD), a funding model that has been key to the UK’s success in developing offshore wind energy.
These will guarantee payment to operators who cover their costs while intending to ensure that CCUS projects cannot make excessive profits.
Competitive project allocation rounds are due to start in 2027.
There are already two CCUS clusters in England which are coming online first: HyNet covering the North West of England and North Wales and the East Coast Cluster based around the Humber and Teeside. The individual projects that make up each cluster are still being discussed but aim to be operational by the mid-2020s.
There is also progress on Scotland’s CCUS cluster, Project Acorn in Aberdeenshire, which is due to start capturing, transporting and storing CO2 in 2028-2029. Acorn CCUS is approaching a key milestone, with projects within the cluster expected to present their transmission and storage business proposals this year.
Labor has confirmed its continued investment in CCUS and has indicated that existing and proposed CCUS projects will continue apace.
That must be good news for a nascent industry that offers real hope of benefiting the Scottish labor market and the UK’s Net Zero ambitions.
Jamie McRorie is a confirmed speaker at All-Energy, the UK’s largest renewable and low carbon energy exhibition and conference, which takes place in Glasgow on 15-16 May. Visit Shepherd and Wedderburn’s All Energy center at www.shepwedd-allenergy.com
