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News from CCS TLM - September 2012
 
CCS TLM Limited, together with its parent company Tractebel Engineering, is a provider of integrated, expert consultancy, engineering and advisory services to the emerging Carbon, Capture and Storage (CCS) sector.
 
In this issue:
A1Autumn 2012: a critical conjecture for the EU energy sector and CCS ambitions?

The Euraucrats are back from their summer recess. What does it mean for energy policy this autumn? Very much on the agenda are Carbon Capture and Storage, Internal Energy Markets and EU ETS reform to name only a few. 

CCS

Over the summer, the Commission published a report on the use of European economic recovery money for energy infrastructure. Despite good progress on most gas and electricity infrastructure projects, it said the supported CCS projects are still behind schedule. None have adopted final investment decisions. Two of the projects also appear in first and second place on a list of preferred projects for additional, EU carbon market funding published at the start of the summer: the UK's Don Valley project and Poland's Belchatow lignite plant. The Netherlands's Green Hydrogen project is third of this preferred list. Up to three CCS and 16 renewables projects are set to benefit from the carbon market funds. This is fewer than the Commission originally intended, which is due to the persistently low carbon price. The projects are to be funded from the proceeds of ETS auctions, and they look to deliver only up to €1.5bn now, not the €4.5bn originally foreseen. Successful applicants will be named by the end of the year. The Commission is still considering a fresh policy paper on CCS. 

On Friday 21st September, the European Commission's DG Energy held a CCS Roundtable in Brussels to address the short term challenges facing the six recipients of the EERP (European Economic Recovery Programme) funding in 2009-10.

The meeting was held at the behest of the Energy Commissioner, Gunther Oettinger. The Commissioner has more recently displayed a strong interest and has personally initiated a number of CCS activities.  In particular he is very concerned about the lack of progress of several of the projects that received EEPR funding.  

Commissioner Oettinger made the following points in his opening remarks;

  • The Commission has done its bit with the development of the regulatory framework and various funding mechanisms.              
  • The European Council of Ministers' goal of 10-12 CCS projects operating by 2015 is now unrealistic.
  • The EEPR projects have been delayed primarily for the following reasons:
    • lack of transposition of the CCS Directive;
    • limited support at Member State level, and
    • public opposition.
  • These issues must be addressed or projects will be further delayed / cancelled making it harder to reach EU carbon targets, raise the costs of reducing emissions and also impact on industry.

Although Commissioner Oettinger clearly identified the need for further funding, it was unlikely to come from EU sources. Additionally, Member State funding is also likely to be problematic due to a number of economic pressures. Hence industry needs to find new sources of finance to "kick-start" slowed projects. This could include additional parties/investors to current project sponsors and the project sponsors' appetite for this was raised by the Commissioner.

As had been widely expected before the meeting there is a strong focus at EU level for the need to support the ROAD CCS project in Rotterdam, and there are indications that there may be companies from further afield willing to provide some support given favourable circumstances. 

Internal energy market

The Commission's Energy Department is currently preparing a new policy paper on the internal energy market for release on 15 October. As EU energy commissioner GŁnther Oettinger said recently: "Our internal market communication will be the start of a debate about market design, market mechanisms and capacity markets." It is capacity markets in particular that will be the focus of the new communication. These are markets that reward the Megawatt rather than the Megawatt-hour, in other words, the availability of generation capacity rather than the production of energy. Capacity markets, which are necessary to cope with the intermittency of energy from renewable sources, are springing up all over Europe and Brussels would like to impose some kind of harmonisation on them. 

EU ETS reform

The reform of the EU Emission Trading Scheme (ETS) is a big legislative item in the energy arena in Brussels this autumn. At its very last meeting before the summer break, on 25 July, the Commission kicked off action on the ETS with a proposal to delay the sale of a certain number of carbon allowances into the market from next year. Its goal is to raise the EU carbon price - still languishing at or below €10 per tonne. It wants to make up for the effects of the economic crisis in Europe, which has reduced industrial production - and therefore emissions - and left the carbon market with a surplus of allowances. 

How many allowances should be delayed, if any, is what member states are supposed to decide by the end of the year. The European Parliament will have a veto. The Commission, which suggests between 400 million and 1.2 billion, is consulting on this until 16 October. At the same time as launching its proposal to delay allowance sales, the Commission is also asking member states and MEPs to confirm in law its right to do so. It appears to be taking no chances after several representatives from energy-intensive industries questioned its legal right to "intervene" in the market like this. 

Later in October or November, the Commission plans to follow up with suggestions for deeper, structural reforms to the ETS, such as tightening the emissions cap for 2030. This will feed into the debate over a 2030 EU climate and energy package. Note that specific industry sectors, such as steel and cement, are currently developing their own 2050 low-carbon roadmaps to help shape this debate. It is also worth noting that at the end of August, the Commission announced plans to link with Australia's fledgling ETS by 2018. A partial link from 2015 would already allow Australian firms to buy EU allowances - another good way of eating into Europe's allowance surplus.

That is a summary of what to expect from Brussels this autumn. The energy agenda is a busy one, with issues such as the ETS having effects on large parts of the European economy beyond just the energy sector. The EU's guide for its energy future remains the energy 2050 roadmap (yet to be accepted by Poland), which sets out scenarios for secure, sustainable, affordable energy supplies. The debate unfolding now is how to get to there.

Contact

For more details, please contact Dewi ab Iorwerth by email or by calling us on +44 (0) 203 463 8529.   

 

Dewi ab Iorwerth, Sales & Marketing

 

 
  A2NEWS

Capturing attention - building an EU & UK CCS industry

 

The UK and Europe are now deep into competition mode to see the first CCS projects built, which will finally enable inclusion amongst the global 'club' of countries that have already started down the CCS path.

In the UK, the Government launched the 'CCS Commercialisation Programme' in April this year - its revamped CCS Competition, after the first competition (launched in 2007) culminated in the cancellation of the sole remaining project at Longannet power station last year. Whilst the Commercialisation Programme does not commit to a total number of projects to be supported the Government has committed to supporting four commercial-scale CCS projects in its coalition agreement.

This competition presents the industry with a much more flexible package including both coal and gas, consideration of all capture technologies and inclusion of industrial emitters where part of a cluster project. A change in the name of the competition indicates that the Government is now focussed on the long-term commercialisation of CCS, with the high-level aim of enabling CCS to compete cost-effectively with other low-carbon technologies in the 2020s. Crucially, the Programme now states clearly the need for projects to demonstrate their contribution to the development of early transport and storage infrastructure which will support CCS projects into the future, an issue which has long been at the forefront of industry discussions.

 

To read the full article, click here

 

Summit Power Group celebrates major milestones in financing and construction of the Texas Clean Energy Project


At the 12th annual U.S.-China Oil & Gas Industry Forum (OGIF) in San Antonio, Texas, Summit Power Group (Summit) yesterday introduced major new project participants who will advance and help assure the financing and construction of the Texas Clean Energy Project (TCEP). The news was announced at an industry luncheon attended by all of the companies involved with TCEP from the United States, Europe and Asia. After remarks by federal, state, and local elected and appointed government officials, the event culminated with the signing of a Memorandum of Understanding by representatives of Summit, Sinopec Engineering Group and The Export-Import Bank of China ("Chexim.")

TCEP, a large scale commercial coal gasification power/polygen project that Summit is developing near Odessa, Texas, will capture ninety percent (90%) of its carbon dioxide for use in enhanced oil recovery (EOR) by producers in the Permian Basin of West Texas, boosting U.S. oil production by some seven (7) million barrels per year and generating thousands of jobs in Texas and throughout the U.S. TCEP will also produce more than 700,000 tons per year of urea as fertilizer for U.S. farmers and a long-term, 200 megawatt supply of ultra-clean and low-carbon electric power for CPS Energy, the municipal electric and gas utility of San Antonio.

                    

To read the full article, click here

 

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Paul Bryant

CEO

Sales and Marketing
CCS TLM Academy

Mike Cloud

Mike Cloud 

Jeroen Soenen

Capture and Power
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lewis jefferey

COO and Eastern
Hemisphere

 

Bryan Lovell

Bryan Lovell

Storage and EOR

 

 


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A3CCS TLM ACADEMY and NCCCS TRAINING

CCS TLM Academy are pleased to be able to offer your team of 8 or more staff bespoke training courses delivered onsite at your offices. These bespoke courses will be tailored to meet your specific business needs increasing your team's knowledge and understanding of CCS. For more information on bespoke training courses please call +44 203 463 8529 or email academy@ccstlm.com.

 

Also, from previous newsletters, you will be aware that we have two different CCS Training Courses on offer. They are an introductory level 'Simplifying CCS' and a more advanced 'Carbon, Capture and Storage: A Field-Based Masterclass'.

Please keep checking our website for more details of forthcoming courses, dates & venues.

Both courses are undergoing endorsement by the Geological Society and are supported by Dr Bryan Lovell OBE, Senior Research Fellow in Earth Sciences, University of Cambridge.

Members of The Geological Society receive a 10% discount on course fees.

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