• ETI will invest up to £2m for early stage development of a power-with-CCS scheme which will take early advantage of new CCS infrastructure and help to deliver momentum into the next phase of CCS sector development
• Business focus of the investment will be on providing investable, low-risk, low-cost, low-carbon power, supported by a Contract for Difference (CfD)
The Energy Technologies Institute (ETI) is seeking co-venturers to develop an investable concept for major new power generation capacity fitted with carbon capture and storage (CCS).
ETI’s Thermal Power with CCS investment will support development of the business case for an investable, low cost, low carbon power scheme supported by a Contract for Difference (CfD).
It is designed to take early advantage of the new CCS infrastructure being built and deliver momentum into the next phase of CCS sector development.
Analysis carried out on behalf of the ETI by Pöyry and AECOM has identified that key features are likely to include:
• Sharing existing transport and storage assets to reduce cost, complexity, schedule and scope;
• Low planning cost, time and risk, e.g. already-consented sites, based near pipeline infrastructure;
• Use of ‘best proven’ technologies, balancing cost against investor risk premium;
• Rapid, low risk project delivery;
• Risk-sharing, by attracting multiple investors in a co-venturing model;
• Business models with a clear allocation of risk along the CCS chain.
The ETI will invest up to £2m in the project which will identify the technical and commercial foundations and create the business case for a specific Phase 2 CCS project. It will include identifying funding and establishing a vehicle to take the project forward to Financial Investment Decision and beyond.
Andrew Green, ETI CCS Programme Manager said:
“Our analysis of the UK energy system clearly identifies the strategic importance of timely development of a sizeable CCS sector.”
Although initial CCS demonstration projects would require a high strike price, we believe that costs will fall rapidly to below £100 per MWh for follow on projects as a result of sharing infrastructure, economies of scale, engineering learning and greater confidence from investors.
We will adopt a collaborative, co-venturing approach with our partners to enable risks to be shared amongst multiple investors and ensure that our co-venturers will be well-placed to take advantage of not just this investment opportunity but future opportunities presented by widespread CCS roll out.
The ETI’s recently-published insights document “Building the UK Carbon Capture and Storage Sector by 2030 – Scenarios and Actions” identified the practical steps needed over the period to 2030 to build an effective CCS sector.
It suggested three possible scenarios that would allow CCS to realise its long term potential and play a key role in decarbonising the UK’s energy sector with the development of around 10 GW of capacity by 2030.
All three scenarios depend on implementing both DECC Commercialisation ‘Phase 1’ projects at Peterhead in Scotland and White Rose in Yorkshire and building a credible pipeline of investable ‘Phase 2’ projects using the infrastructure developed in the first phase.
Phase 2 needs to be developed in parallel with Phase 1 if widespread roll out of CCS is to be achieved by 2030 and this project will help achieve that aim,” said Andrew Green."
The request for proposals will close on 30th October 2015. The deadline for notification of intention to submit a proposal is 4th September 2015.
The insight document “Building the UK Carbon Capture and Storage Sector by 2030 – Scenarios and Actions” can be found here.