With the carbon capture (CCUS) Track-1 cluster announcement due in October, there is a growing sense of anticipation in the green energy industry. Richard Cockburn, head of energy, explains the latest state of play for CCUS in the UK and looks at what’s coming next.
We are not yet two full years into this decade but for the green energy industry the end of the 2020s is already looming large on the horizon. This is especially true for those pioneering projects which aim to make CCUS a success in the UK.
With a carbon capture target of 10 million tonnes annually by 2030, it is clear that the UK's Clean Growth Strategy and wider clean energy agenda cannot be met without the success of CCUS clusters and that the rapid development of clusters in the UK is now a necessity.
CCUS is developing quickly in the UK and is starting to attract growing interest from green finance investors and stakeholders. Alongside UK Government funding, unlocking this private investment will be the key driver for success. There is still a lot of work to be done and all eyes are on the Track-1 announcement in October, which will confirm which CCUS clusters in the UK will be in the first wave of these projects.
CCUS – where are we now?
Five projects across the UK have reached the required standard to be considered for Track-1. These projects include:
- DelpHYnus, operated by Neptune Energy
- East Coast Cluster, which brings together the BP-led Net Zero Teesside and Equinor-led Zero Carbon Humber schemes and the Northern Endurance Partnership (NEP), which involves Eni, National Grid, Shell and TotalEnergies
- Eni’s Hynet scheme located on the north-west coast of England
- The NECCUS Scottish Cluster, which includes the Acorn scheme with backers Shell, ExxonMobil, Storegga, Harbour Energy, Macquarie, Ineos, Petrofac and Wood
- V Net Zero, led by Harbour Energy.
In order to be shortlisted, the projects had to demonstrate credibly that they could be operational by 2030, be located within the UK, and meet the definition criteria of a CCUS cluster.
The UK Government’s definition of a CCUS cluster is a transport and storage network (i.e. a set of onshore pipelines, offshore pipelines and an associated offshore storage facility) and an associated first phase of at least two CO₂ capture projects.
The pipelines must be capable of transporting CO₂ to the storage site (for example a saline aquifer or depleted oil and gas field), which must be able to store this CO₂ safely and permanently.
It is encouraging news for the UK that all five clusters that submitted applications made the grade.
What will CCUS clusters mean for selected regions?
The development of CCUS clusters will not only help meet the UK's carbon capture targets but also support our heavy industrial regions to decarbonise effectively. Building these industrial CCUS zones could help local industries to control the costs of emitting and help to retain tens of thousands of jobs in the UK, up to 50,000 according to the 2021 Afry and Cambridge Econometrics study carried out on behalf of CCSA . It has been estimated that 50,000 more jobs could be created in the UK takes an ‘early mover advantage’ in the global CCUS race.
For industries such as Teesside and Humber, which together account for nearly 50% of UK cluster emissions, as many as 25,000 jobs could be safeguarded and thousands created according to data from TVCA.
Collaboration is key
Although some of those clusters considered for Track-1 will miss out in the immediate term and may need to wait for Track 2 or later phases, it is collaboration, not competition, that will define the success of carbon capture clusters.
There is going to be an element of realpolitik here and pragmatism will rule. For example, some stakeholders will be members of more than one cluster. Throughout the process, there has been much sharing of best practice, and that will have to continue into the future to drive the pace needed to develop infrastructure and models for success.
In order to develop and build the clusters, a solid, dependable supply chain will need to be in place. Clusters will need to collaborate to ensure optimisation of the supply chain to deliver the work.
The clusters themselves are collaborative entities – NECCUS and the East Coast Cluster, for example, both bring together a number of private and public bodies. We expect to see in the future the clusters sharing information and working together for their overall objectives.
So, what happens next?
The UK Government is amending the CCUS phases to a sequential approach and it is now planning for the launch of Phase-2 (for selecting projects to connect into a cluster) to be made in parallel with, or very soon after, the Track-1 cluster announcement.
The UK Government has previously confirmed that the Phase-2 application process will be open to all prospective capture projects which could feasibly connect to one of the clusters provisionally sequenced onto Track-1, regardless of whether they featured on the original submission. The UK Government has noted that this sequential approach will “help to address concerns over nugatory effort of Phase-2 applicants which may have resulted from the previously proposed overlay approach.”
It will also allow hydrogen stakeholders time to respond to the business model consultation; the feeling is that hydrogen is running behind CCUS at present and needs to catch up.
It is not anticipated by the UK Government that any of these changes will impact the ability for two clusters to be operational by the mid-2020s.