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Energy Market Update – 10th August 2015

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With so much concern over environmental issues and security of supply, perhaps at some point Carbon Capture and Storage (CCS) will become a reality. Looking ahead to 2030/40, it would seem that fossil fuels will have an equal share of the market, accounting for 75-80% of energy consumed. So, knowing that fossil fuels will still be with us and, therefore, continue their use without the traditional pollution that goes with it, some serious thinking will need to take place. Once again, CCS comes to mind.

CCS has been talked about for many years. The theory of capturing carbon emissions and storing them underground may seem complicated from the technical process involved, and as yet, we do not have a working model commercially viable in the UK. For storage under the sea, installations will need to be around the coastline, and that may not be where the power is needed.

BP invested £50m in the project at Peterhead. The plan had been to capture the carbon dioxide from gas drawn from the Miller field and then pipe it back in. Not only would the carbon dioxide be stored away, but the pressure from it would help to expel the last deposits in the field. The process was planned to also take out 90% of carbon emissions usually produced by fossil fuels. At the same time, hydrogen would be captured from the gas and burnt as fuel.

Unfortunately, the project became uneconomical for BP and without government incentives, the company decided to abandon it early in 2007. It made use of the technological experience elsewhere in the world such as in the US, Canada, Africa, and Australia where such projects are being successfully utilised today.

However, as BP was pulling out, the government announced proposals to set up a competition to build an integrated CCS plant! Too late for BP. It was set to be announced in November 2007, but it was not until five years later, in April 2012, that it opened. Then, in March 2013, the government announced two preferred bidders: the White Rose Project at Drax in conjunction with Capture Power, and the Peterhead Project, this time run by Shell. In December 2013 and February 2014, the two contestants respectively were awarded multimillion pound contracts to undertake Front End Engineering and Design (FEED) studies.


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