Canavan revives carbon capture in new effort to underpin coal generators | RenewEconomy

Canavan revives carbon capture in new effort to underpin coal generators

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Resources minister Matt Canavan has revived proposals for carbon capture and storage projects to help justifiy government backing of new coal projects.

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Credit: Chevron Australia
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Resources minister Matt Canavan is leading a renewed effort to secure federal funding for carbon capture and storage projects, as part of a wider strategy to see more investment in coal-fired power stations in Australia.

As reported by the Australian Financial Review, representatives from oil and gas company Santos, and coal miner Glencore have met with Prime Minister Scott Morrison and advocated for carbon capture and storage projects to receive financial support under the $2 billion Climate Solutions Fund.

The push to invest in carbon capture and storage projects appears to have the backing of resources minister Matt Canavan, who confirmed that financial support for such projects was under active consideration by the Morrison government.

Two of Morrison’s closest advisors are the former CEO and deputy CEO of the Mineral Council of Australia, the principal coal lobby in Australia which also supports CCS, even though projects to date have been hugely expensive and not very effective.

“We are looking into this. We have put a lot into CCS and we are looking at the next steps,” Canavan told the Financial Review.

Carbon capture and storage technologies have already received substantial financial support from the Australian government – around $500 million – but almost nothing has been delivered in terms of actual emissions reduction.

Companies like Glencore and Santos see carbon capture as a technology that would enable coal, oil and gas industries to continue while supporting efforts to limit global warming.

In its 2019 Climate Change report, Santos said that it believed carbon capture and storage would be necessary in scenarios that limit global warming to well below 2 degrees.

The effort to promote carbon capture and storage appears to be part of a renewed effort to have the federal government underwrite the development of a new coal-fired power station in Australia.

Glencore lobbyists are understood to have flagged the prospect of a new high-efficiency low-emissions (HELE) power station being paired with carbon capture and storage technology.

“Glencore believes government policy should be extended to support all low emission technologies, including HELE and CCS which can co-exist with renewables,” a Glencore spokesperson said.

The renewed push also follows reports of a heated exchange between prime minister Scott Morrison and Canavan, the latter apparently angered by Morrison backing down from a commitment to underwrite the construction of a new coal-fired generator in Queensland.

The Morrison government has allocated $2 billion to the Climate Solutions Fund to purchase additional greenhouse gas abatement, as part of efforts to meet the government’s 2030 emissions reduction targets.

The commitment was based on previous experience with the Emissions Reduction Fund, which has secured a range of emissions reductions from land management and waste management projects, purchasing Australian Carbon Credit Units (ACCUs) at an average price of around $15 per tonne.

However carbon capture and storage technologies remain prohibitively expensive and relatively unproven, with latest GenCost report issued by the CSIRO showed that carbon capture technologies nearly doubled the capital costs of both coal and gas-fired power stations.

The cost of reducing emissions through the use of carbon capture and storage technologies can be as high as $80 per tonne, meaning the use of funds from the Climate Solutions Fund would raise further questions around the already shaky plans from the Morrison government to achieve its 2030 reduction target.

”I would say at this stage of the CCS development stage, that ACCUs by itself would not be sufficient to attract or get that over the line,” Canavan conceded.

The levelised energy costs of new coal and gas projects combined with carbon capture technologies also remained significantly more expensive than new solar and wind projects, even when renewables were backed up by energy storage technologies.

Analysis completed by think tank The Australia Institute has shown that $1.3 billion has been invested in carbon capture and storage projects since 2003, but there has been almost nothing to show in terms of operating projects and stored carbon emissions. There is just a single CCS project currently operating in Australia.

In August, Chevron Australia announced that it had commenced storing carbon dioxide captured from its offshore Gorgon gas project, off the coast of Western Australia, after years of delays. The project is expected to capture more than 100 million tonnes of carbon dioxide over the life of the project, representing around 40 per cent of the emissions produced by the Gorgon project.

Chevron Australia Gorgon LNG carbon capture and storage
Credit: Chevron Australia

The moves to direct funds allocated to the Climate Solutions Fund to CCS projects follows earlier moves from the prior Turnbull government, which sought to allow the Clean Energy Finance Corporation (CEFC) to invest in such projects.

Legislation currently prohibits the CEFC from investing in carbon capture technologies, and an amendment to lift the legislative prohibition was allowed to lapse when the parliament was dissolved for the 2019 federal election.

Last month, new an analysis published by researchers at Stanford University found that CCS could prove a hindrance to efforts to reduce global pollution from coal-fired power stations.

“Even if you have 100 per cent capture from the capture equipment, it is still worse, from a social cost perspective, than replacing a coal or gas plant with a wind farm because carbon capture never reduces air pollution and always has a capture equipment cost,” professor Mark Jacobson said.

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18 Comments
  1. ReverseConcaveSpoon 6 months ago

    FFS. It doesn’t work. No one else is doing it. It’s dead. How many times does this Trojan horse need to be sent back to the knackery?

    • Joe 6 months ago

      Hi Reverser. Rescuers Minister Matteo Coalavan is in his job for one reason only and that is to keep the FF fires burning for longer and stronger – The MCA, Gina and all the other FF hangers on aren’t donating to The COALignition Government for nothing.

  2. Jon 6 months ago

    Brilliant, lets spend some money making the more expensive power generation options that we have more expensive.

    I do believe that we will need to have CCS technologies in use in the future to try to claw back some of the previous emissions as we are currently doing too little too late, not so that we can burn the magic black rock though.

  3. trackdaze 6 months ago

    Not capturing Sulphur, Lead, Arsenic or mercury or saving water for farmers and rivers though now is it?

    • Joe 6 months ago

      Hi Trackie. But capturing plenty of us punters hard earned $’s, yes. We’ve got nothing to show after ‘burning’ $500millions so far and these jokers are putting the hand out for, “please sir, more”. If the Santos and the Glencore are such huge fanboys of CCS then let them start burying some of their own dosh but I’m guessing their ‘Quiet Shareholders’ wouldn’t be in on it.

  4. Glynn Palmer 6 months ago

    A 2015 report published by CO2CRC estimated the LCOE cost of Ultra Super Critical black coal with CCS at $168/MWh compared with $79 with no CCS. CO2 Emissions with CCS were 106kg/MWh and 773kg/MWh with no CCS.

    CSIRO/AEMO Gencost 2018 LCOE for black coal no CCS $70-$105/MWh. With CCS and a carbon price $100-$200/MWh.

    If one of CEFC’s criteria is the best bang for the $, then new coal would be eliminated in the first round.

    Depending on firming and security technology advances, there may be a place for the rare advanced USCPC with CCS post 2050 with >90% renewables. But it will have to compete with batteries and pump hydro on price.

  5. Chris Drongers 6 months ago

    Can we get Canavan to define solar and wind as resources? Then he will be required under his ministerial remit to treat them equally with coal/iron/gas/molybdenum/lithium/vanadium/manganese/tantalum/phosphorus/sodium/barium………….

  6. Craig Steddy 6 months ago

    The proponents of CCS are fully aware that the economics don’t and will likely never stack up. The purpose of CCS is to enable the fiction of a fossil fuel future to be maintained for as long as possible. Every year the inevitable is delayed is worth hundreds of billions of dollars to the fossil fuel industry.

  7. Ken Dyer 6 months ago

    has anyone explained to Mr Canavan that is more economic to NOT create carbon for capture in the first place, or is that asking too much?
    His unrelenting search to justify anything that can burn coal just underlies the fact that the Morrison Government is owned by the coal companies, and will do anything for them regardless of the fact that over 3000 Australians die every year from the effects of airborne carbon pollution.

    • Joe 6 months ago

      Hi Ken. Is this the right time to talk about pollution related deaths? Or should we sssshhh and be good little ‘Quiet Australians’? Too bad if 3,000 Aussies a year die from pollution, just collateral damages in Matteo Coalavan’s and ScoalNO’s grand scheme of things….”This is coal. Don’t be afraid. Don’t be scared. It won’t hurt you. It’s Coal”

  8. John Wass 6 months ago

    Again the so called free market capitalists are putting their hands out for public funds. They can be seen for the rent seekers that they are. Capitalise the profits and socailising the losses is and has always been their objective.

  9. Radbug 6 months ago

    The Morrison government seems intent on tying itself up in knots. First, there was/is bushfires & climate change, now it’s MH17 = sanctions, and Uighurs = no sanctions. Further, it’s Canavan & new coal fired power stations & climate change & bushfires. No denying it, the Morrison government is beginning to fall to pieces.

  10. Askgerbil Now 6 months ago

    It is unclear what this means:“Even if you have 100 per cent capture from the capture equipment, it is still worse, from a social cost perspective, than replacing a coal or gas plant with a wind farm because carbon capture never reduces air pollution and always has a capture equipment cost,” professor Mark Jacobson said.

    It seems pretty straightforward that if all potential CO2 emissions are captured then CO2 emissions would be reduced …to zero.

    Mark Jacobson may have let ideology get in the way of his thinking and has blocked out a potential solution to climate change with a “logic pretzel”.

    • Mark 6 months ago

      He is talking about non carbon emissions, or traditional air pollution that causes haze. As a specific example consider particulate emissions, or nitrous oxide. Our particulate emissions standards are quite lax, with the result that many Australians suffer respiratory illness and some die that wouldn’t if we had the same emissions standards as the US, or Europe. Currently society wears this externality, and the emitter doesn’t pay for it, and we don’t pay it in our power prices.

  11. Ken Fabian 6 months ago

    For every ton of high quality coal burned there is about 2.8 tons of CO2 given off. Maybe 3 tons with HELE; they’re so efficient. That is the unalterable arithmetic that makes CCS unviable; no-one should take it seriously.

    However, CCS as a way to get climate credits and subsidies for using CO2 to extract more oil and gas is a raised finger to all our good climate intentions; we should take that seriously!

    Last month it was nuclear. This month it is new coal with CCS. A few months from now they will try and trot them out all over again and claim it is rampant green foolishness to reject them. But what this is really all about – the climate consequences of fossil fuel burning – is a hotter burning issue now than ever before; it was a near thing at the last election and nothing like the endorsement of their Doubt, Deny, Delay politicking on climate they want it to be. The calls to not talk about climate change now, with exceptional drought and bushfires going on – because they are going on – are not going to work; people are not going to wait until this fire season, just started, is over to talk about it.

    • Askgerbil Now 6 months ago

      Unless of course Carbon Capture and Storage is used in place of Carbon Capture and Release – and stops CO2 being released into the atmosphere.

      Esso’s Longford Gas Plant currently captures 1 million tonnes of CO2 a year.
      It is then released into the atmosphere instead of being pumped into the gas field from which it came.
      See “EPA grants works approval to Esso gas plant”.

  12. Joe Booth 6 months ago

    Hard to believe these dunces are trotting out the same old stuff. Maybe Matty Coal-a-van thinks the “quiet Australians” will jump to his support and demand we give more taxpayers dosh to to COALition supporters. CCS does not work, never has, never will. It may be technically feasible in some rare cases, but economically a disaster. It is a toxic feedback loop – produce CO2, spend a S..Tload capturing it (trying maybe-there won’t be a lot of capturing for the money spent!) and keep on emitting with little taxpayer funded capture tokens,and sucking on the taxpayer teet ad-infinatum and so-on and so-on. Globally, billions have been spent for little reward and CO2 levels continue to rise.When will we get some sense and invest our time and money on better outcomes??? The only money that should be spent on CCS should be industry money from the players themselves. But no, they want us to fund their gravy trains in perpetuity at the expense of good sense. They may have a heart that beats, but don’t waste your time looking for their souls!
    And Matty should take a trip down to Kemper Mississippi and see how you can burn a few billion chasing a ghost called CCS, like they did down there, and then wanted their customers to cough for their losses! (Weird that USA hey, most monopoly utilities have protection from losses by being able to levy their customers for such developmental losses!!)
    And please someone, take the proverbial cricket bat and …..if you see or hear a politician talking about CCS support…. well you know what i mean!!

    https://www.greentechmedia.com/articles/read/carbon-capture-suffers-a-huge-setback-as-kemper-plant-suspends-work

    Can’y help but totally agree with Michael Bloomberg ‘s assesment..“total bullshit,” a “figment of the imagination” and “nonsense”

  13. Steve Woots 6 months ago

    I’m not keen on this idea as a way of propping up more coal, and certainly not keen on the huge waste of taxpayer money that has gone into this.
    However! A technology breakthrough just might make it feasible.
    http://news.mit.edu/2018/new-lithium-battery-convert-carbon-dioxide

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