Critical uncertainty and risk in CCS projects

29 February 2024
Posted by: Future Energy
Category: Energy transition

Authors: Robert Hines & David Bamford

Investing in Carbon Capture and Storage (CCS) technology presents a significant opportunity for reducing carbon emissions, particularly if investors are confident in the technology’s scalability and the timely, budget-compliant construction of facilities. However, to navigate this promising yet complex landscape effectively, two critical aspects need careful consideration: Uncertainty and Risk.

Uncertainty: availability of CO2 streams

The Uncertainty lies in the availability of a known, reliable, stream of CO2 over the injection period. Some CCS projects are reported as struggling because the prognosed CO2 stream was over optimistic, the reality being of less volumes and more variability.

The oil & gas industry has deep experience of an analogous issue when the prognosed oil and/or gas production stream is revealed as over optimistic, either too low or too variable. From many, many projects, as many as 70% struggle or even fail for this reason; the root cause is poor appraisal (measurement!) before the development project is selected/defined.

Investors need to assure themselves that the presumed CO2 streams are realistic ie have been properly appraised (ie measured) from the variety of sources within an Industrial ‘cluster’- major power stations burning gas or coal; electricity being generated via waste management (combustion of non-recyclable waste or methane at anaerobic digester or landfills), refineries and chemical plants.

Risk: integrity of CO2 storage

The Risk lies in whether stored CO2 stays stored. Licenses to inject require detailed monitoring plans based on risk profiles of stores. Many current monitoring plan proposals centre around the transfer of technologies from the oil & gas industry but these are typically high cost and are simply inappropriate for the CCS business model.

A better methodology is that by having a very thorough base line, delivered before a CCS project begins, very high levels of store integrity can be established, leading to a much reduced (and therefore cheaper) monitoring plan. With a really integrated approach there will be a much more detailed understanding, demonstrating a high integrity of storage, showing early conformity with modelled behaviour and thus making a reasoned case for reducing monitoring requirements (and then showing best practice when handing over liability to the Crown Estate).

Investors need to be convinced that the realistically costed monitoring plan is based on a thorough base line study.

Conclusion

For CCS projects to be successful, investors need to critically assess and address the uncertainties and risks associated with CO2 stream availability and storage integrity. Ensuring that CO2 streams are realistically appraised and establishing a thorough baseline study for storage sites can significantly mitigate these challenges. By focusing on these areas, investors can contribute to the development of viable, effective CCS projects that play a crucial role in global carbon reduction efforts while also adhering to financial and environmental sustainability principles.

How can we help you?

Request a free bespoke evaluation.

We are grateful to Future Energy Partner for helping us though the ISO certification process. The implementation of ISO standards is what differentiates as a company from our competitors and demonstrates our commitment to Occupational Health and Safety Management.