Panel 6. Equal treatment of CCS with other technology options - Dick Wells, NCCSC
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Delivered at the Global CCS Institute's Global Status of CCS: 2013 event in Seoul, 11 October 2013.
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Panel 6. Equal treatment of CCS with other technology options - Dick Wells, NCCSC
- 1. National CCS Council The case for equal policy treatment of CCS with other clean energy technology Dick Wells Chair, National CCS Council (Australia) Presenting to Conference title, venue date, month, year Presenting to: The Global Status of CCS 2013, South Korea Friday 11 October, 2013 © CO2CRC All rights reserved © NCCSC All rights reserved
- 2. National CCS Council The Case for CCS Nuclear 8% End-use fuel switching 9% End-use fuel and electricity efficiency 31% Power generation efficiency and fuel switching 3% CCS 20% Public investment in CCS projects 2007-2012 (global): $2.5B* Renewables 29% Global renewable subsidies in 2011: $88B** IEA Energy Technology Perspectives 2012 * IEA CCS Technology Roadmap 2013 ** IEA World Energy Outlook 2012
- 3. National CCS Council An Australian Case Study: Future Electricity Generation Mix in 2050?
- 4. National CCS Council An Australian Case Study: CCS v Renewable Support $1.0B $3.2B CCS Technology Programs $20B+ $10B indirect subsidy in doubt Renewable Technology Programs Clean Energy Finance Corporation Renewable Energy Target
- 5. National CCS Council Is equal policy treatment the solution? • Support must be commensurate with the anticipated role of CCS – in Australia and globally • Australian CCS Roadmap: targeted, transitional support needed to facilitate: – Exploration and appraisal of CO2 storage resources – Early-mover, integrated CCS projects – Planning and development of CO2 storage hubs – Continued investment in R&D – particularly storage – National CCS Communication Strategy
Notes de l'éditeur
- There is no question that renewables have received the lion’s share of the public support available for low emission energy options. According to the IEA, subsidies for renewable energy amounted to $88 billion in 2011 alone – and over half of this ($46 billion) was for wind and solar. The cumulative value of subsidies to existing renewable capacity is estimated at around $875 billion to 2035.In contrast, $10.2 billion was spent on CCS projects between 2007 and 2012 – and of that $7.7B was privately financed (IEA). The Global CCS Institute estimates that the total public funding availablefor large-scale CCS demonstration projects stands at $21 billion. (NB – the GCCSI figure could change with the 2013 Global Status update)So in a 5 year period, CCS projects received less than 3% of the public support that was available for renewables in a single year.Clearly, this level of investment is not commensurate with the anticipated contribution of CCS to the global abatement task, which the IEA estimates at 20% compared with 29% for renewables. If we were to use renewable subsidies as the benchmark, then global support for CCS should be in the order of $58 billion a year.
- The situation in Australia reflects the global trend of a policy and funding bias towards renewable energy.This is despite the fact that CCS will be a uniquely important technology for Australia’s resources-based economy: We are the world’s largest coal exporter, with coal exports valued at $46 billion last year, and soon to be a major exporter of LNG.The IEA has estimated that Australia’s coal and natural gas export revenues could exceed $2 trillion to 2035, but these exports may be dependent on global deployment of CCS. Domestically, over 90% of our electricity is derived from coal and gas. Australian Government modelling of the future electricity mix shows that CCS could account for almost 30% of the mix in 2050.This will require a cumulative investment of at least $65 billion in CCS to 2050 in the electricity sector alone (Energy White Paper & ROAM 2011 modelling). (NB - Renewables would account for 56% of the mix and require a cumulative investment of over $100 billion in investment)The National CCS Council has emphasised to governments that this level of investment is predicated on the successful commercialisation of CCS technologies as well as the early identification and development of CO2 storage sites.
- Looking specifically at the funding available in Australia, renewable energy technologies have had access to over $13 billion in direct subsidies and at leasta further $20 billion in indirect industry subsidies through the 20% renewable energy target.In comparison, there is approx $1B to support CCS research, development and demonstration, with CCS programs routinely targeted for budget savings.The most significant program is the CCS Flagship Fund, which was established as a $2 billion fund in 2010 but has been progressively scaled back to around $735m. Similarly, the National Low Emissions Coal Fund started as a $500m Fund has been scaled back to around half that amount. Renewable programs in Australiahave not been targeted to the same extent, but remain far from immune.The $10 billion Clean Energy Finance Corporation (which is set out in the chart) provides an interesting insight into the politics and uncertainty that have characterised this policy space. The Fund was announced as part of the introduction of Australia’s carbon tax in 2011 with a mandate to invest in clean energy which would “prepare and position the Australian economy for a carbon constrained future”. However, the Fund was specifically excluded from investment in CCS as a concession to The Greens party. Yet this may not have long-term consequences for CCS. The Fund formally commenced operation in July this year but with the recent election of a new Government it is set to be abolished along with the carbon tax. The new Government has also committed to reviewing the 20% renewable energy target in 2014, possibly with a view to decreasing the overall generation target.
- In this context, it is reasonable to ask whether equal policy treatment for CCS is actually the solution. Clearly, there is an extraordinary imbalance in the support available for renewable technologies vs CCS and consequently we’re seeing renewables deployed at an exponentially greater pace. Governments, and to some extent industry, must urgently redress this imbalance and commit to a policy and funding effort commensurate with the anticipated role of CCS. This does not necessarily equate to ‘equal’ policy treatment.While the ultimate goal would be technology-neutral policy settings which encourage least-cost abatement and enables all low emissions technologies to compete on a level playing field, in the near term CCS (like many other emerging technologies) will need targeted support to accelerate development and deployment.In Australia, the National CCS Council has developed a Roadmap to 2030 whichprioritises policy support and investment in:Exploration and appraisal of CO2 storage resources;Early-mover, integrated CCS projects;Planning and development of CO2 storage hubs;Research and development – particularly storage; andA national CCS Communications StrategyHowever, success in accelerating CCS will ultimately depend on a long-term political commitment which delivers certainty and stability in policy settings. This is unlikely to be achieved in the absence of an informed, rational discussion of our future energy options that moves beyond the current politics and ideology.