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Another Blow To CCS: Power Companies Bow Out Of Europe’s Biggest CCS Project

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Renew Economy

European power giants Engie and Uniper have withdrawn from a test project to capture and store carbon dioxide generated by one of several major new coal plants in the Netherlands, dealing yet another blow to the prospects of “clean coal” technology, in which the Australian government and fossil fuel lobbyists still hold much stock.

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Reuters reported this week that the two companies – one of which, Engie, the majority owner of Australia’s Loy Yang B brown coal-fired power station in Victoria’s Latrobe Valley, and who recently closed Hazelwood, – had told the Dutch government they no longer intended to participate in the CCS project, the biggest of its kind in Europe.

Holland’s economic affairs Minister Henk Kamp said in a statement he would “examine whether legal steps can be taken to recoup” unspecified subsidies paid to the companies if they had not changed their minds by mid-September.

The minister also said that the companies’ withdrawal from the project “changed nothing” in the government’s resolve to develop large-scale CCS demonstration projects.

But the news deals another serious blow to the prospects of carbon capture and storage – held up by some as a lifeline for coal-fired power as the world shifts to low-carbon energy generation – in the same week that the US market’s flagship “clean coal” and CCS project went up in smoke.

As reported on Thursday, the US energy utility Southern Co finally gave up on its much-vaunted Kemper coal gasification and CCS project, after costs soared from $US1.8 billion to more than $US7.5 billion ($A10 billion), and it realised it wasn’t going to work.

On Wednesday, US time, it announced it would cease operations immediately on the coal component of the project, and just use the asset as a gas generator. Shareholders already saddled with $US3.1 billion of losses face a further $US3.4 billion write down if Southern Co can’t convince regulators to pass those costs on to consumers.

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see also new GWPF Report The Bottomless Pit: The Economics Of Carbon Capture and Storage

Eminent energy economist warns that carbon capture and storage will never be viable. That is the stark message of Professor Gordon Hughes, Professor of Economics at the University of Edinburgh and a former adviser to the World Bank. In a new report published by the Global Warming Policy Foundation, Professor Hughes says that claims that costs will fall quickly are unlikely to be borne out in practice and even if they are, the total investment required makes CCS little more than a utopian dream.