By Deepesh Nanda
With the changing economic dynamics globally, the energy trilemma—involving affordability, reliability and sustainability—must be contended with. These imperatives have also raised concerns over energy security, an important attribute to ensure sustained economic development of any nation. Climate change is a key challenge with implications for the energy trilemma, impacting the ability to balance the three even as it poses a threat to conventional energy production and energy infrastructure. The scenario presents an opportunity to look at other low- to zero-carbon power generation sources or systems that can help resolve the energy trilemma.
For India’s ‘Net Zero by 2070’ goal, carbon capture, utilisation and storage (CCUS) technologies can play a pivotal role. Carbon capture and abatement is critical to achieving the ‘five elixirs’ announced by prime minister Narendra Modi, including the goal to reduce one billion tons of total projected emissions by 2030 and bring down the country’s carbon intensity to less than 45%.
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The roadmap for CCUS
According to the International Energy Agency’s (IEA) Sustainable Development Scenario (SDS), CCUS will account for 15% of the cumulative reduction in emissions in the energy sector, with its contribution set to grow with technology advancements, reduced costs and cheaper abatement options. IEA SDS estimates that by 2070, 10.4 billion tons of CO2 is captured from across the energy sector.
In its simplest sense, carbon capture and sequestration is the process of removing CO2 from the waste gas from industrial or power generation processes. There is a portfolio of options to tackle this challenge, using specific chemicals called solvents and sorbents which have an affinity towards acidic gases. Solvent systems are commercially available technology for capturing carbon from gas plants or industrial processes such as cement and steel. On the other hand, sorbent systems, in early stages of development, are estimated to bring key advantages over solvent systems, such as lower capex and opex due to low sorbent cost and regeneration energy.
While CCUS technologies have been around for over a decade, the ecosystem to get the technologies off the ground at scale has faced constant challenges. One of these is the economics of making it all work. We believe CCUS needs to be a key part of the India decarbonisation strategy for meeting its Paris goals. Ranging from establishing a durable regulatory environment, expediting permitting processes for CO2 storage to positioning CCUS to receive direct investment and incentives similar to those available to other efforts to reduce emissions. Additionally, establishing a market price for carbon will be crucial for providing the needed clarity and stability required to drive investment.
Retrofitting gas-powered plants with CCUS
In India, post combustion, carbon capture serves as a significant channel to decarbonise the power and energy-intensive industries that rely on fossil fuel. Integrating carbon capture systems with gas-powered combined-cycle plants—an effective retrofit strategy—helps cut costs, in addition to extending the lifetime of operating assets, extending their economic viability and even deferring costly decommissioning expenses with forced retirements.
Similar to introducing hydrogen to a power plant—one of the evolving approaches in decarbonisation—CCUS can be applied to both new and existing gas power plants. Today there are known applications of captured carbon dioxide, such as production of synthetic fuels, chemicals, and building materials or for sequestration and enhanced oil recovery (EOR). However, as CO2 storage in geological basins is established at scale, the captured CO2 can be shelved back forever to completely align with the climate goals and emission reduction targets.
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Addressing the cost challenge
One of the key challenges in CCUS deployment is the capital costs involved. Today, technology enables the application of CCUS as a modular solution, which will facilitate incrementalcarbon reduction through each additional module. This is an opportunity for power-plant-owners—as well as industries relying on fossil-fuel powered plants—to take a phased approach by deploying CCUS systems in phases and spread out the capital investment over a longer period.
Several industry bodies and agencies are involved in conducting feasibility studies to define risk identification mechanisms and potential pathways most suited to monetise carbon reduction activity. When the capital and operational costs in CCUS are amortised over a 20-year-period of a plant’s life, the levelised cost of energy from the asset can be highly competitive compared to other forms of decarbonisation assets. We have seen key global support mechanisms that have surfaced this year. For example, the step change through Inflation Reduction Act rolled out in US, presents policy incentives enable an economic tipping point that can make a real difference to the deployment of CCUS. We need to think about how to optimise the whole value-chain to make it an attractive business proposition.
Embracing CCUS should be a strategic priority for the long-term value it brings, especially as it de-risks industries and power plants from future carbon regulations. It can also bring add-on benefits for a country like India by creating 8-10 million full time jobs (CCUS target of 750 mtpa by 2050), while contributing to national GDP. We need a strong carbon-credit and incentive based policy framework that can boost the adoption of low-to-zero carbon technologies. We need an equally important push on CO2 infrastructure that needs to be developed to support the CCUS industry. The facets of critical incentives framework would include a sustained value placed on CO2, uniform standards and procedures for monitoring and safety, tax incentives, assignment of long-term storage liability, and significant infrastructure development.
The author is CEO, GE Gas Power South Asia