Modern coal-fired power stations like MPP3 near Rotterdam (1070 Megawatt) and the Eems power station in Groningen (2 x 800 Megawatt) cause much and heated controversy in the Netherlands. Just before the outbreak of the economic crisis, the Dutch government approved the construction of two power stations. With one notable ambition: those plants had to be CCS ready in order to fulfil Dutch and international climate agreements to halt further climate change above two degrees Celsius. The city and harbour of Rotterdam even based their climate policy – or Rotterdam Climate Initiative as they’ve called it – on CCS. Without CCS the city cannot meet it’s 50% CO2 reduction target in 2025 by far. Moreover, the Rijnmond area (Rotterdam and vicinity) is one of the biggest emitters in the Netherlands, responsible for more than 10% of all Dutch CO2 emissions.
Though environmentalists such as Greenpeace and Friends of the Earth like to see otherwise, all mayor economies in the world run on energy from fossil fuels. Especially in the BRIC countries (Brazil, Russia, India and China) the share of coal in the energy mix, one of the dirtiest fossil fuels in terms of CO2 emissions but also one of the cheapest for their economies, is substantial. They will use coal as a means of power generation now and during the next decades. In order to mitigate runaway climate change above two degrees, CCS – in combination with biomass incineration - is seen as a "key technology" according to the International Energy Agency (IEA).
The necessity of CCS applications is strongly advised in the last and Fifth UN Assessment Report Climate Change 2014: Mitigation of Climate Change of the IPCC. Whereas wind and solar energy are mentioned four times each in its summary for policy makers, it pays ten times more attention to carbon dioxide capture and storage. Two findings in this report are illuminating: “CCS technologies could reduce the lifecycle CO2 emissions of fossil fuel power plants” and “in the majority of low-stabilization scenarios, the share of low-carbon electricity supply (renewables, nuclear and CCS) increases from the current share of approximately 30% to more than 80% by 2050, and fossil fuel power generation without CCS is phased out almost entirely by 2100”.
Or just read David Hone’s blog on the recent COP21 at Paris. Hone, climate change advisor for Shell, writes strikingly clear that, if we want to keep the 1,5 degrees Celsius on the table, CCS is essential: ”Apart from massive reliance on CCS both on the way to net zero emissions and afterwards to correct over accumulation, such a plan would require a complete rebuild of the energy system in just 40 years. A pathway that doesn’t involve use of CCS would require net zero emissions in just 23 years – an option that isn’t even remotely feasible.”
Today CCS has arrived at its crossroads. After great progress during the 1990s to 2009, applying CCS at fossil powered stations almost came to a halt worldwide. Without proper climate policy and well-functioning carbon market mechanisms such as the EU ETS (Emission Trading System) “it is always cheaper to emit carbon dioxide to the atmosphere than to capture and store it”, as one CCS expert aptly puts it. Moreover, there are huge gains as well as huge investments for forthcoming decades at stake. These dilemmas are more obvious at ROAD (Rotterdam Opslag en Afvang Demonstratieproject (Rotterdam Storage and Capture Demonstration project).
ROAD, a joint venture of MPP3 owners E.ON/Uniper and Engie (previously known as GDF Suez), intents to capture and store 25% of its annual three million tonnes CO2 emissions 3.5 kilometres beneath the North Sea. This 250 Megawatt CCS plant, including pipelines and operations, will cost almost € 600 million, to be financed by the EU (€ 180 million), the Dutch government (€ 150 million), ROAD (€ 100 million), the harbour of Rotterdam (€ 15 million) and, at a good CO2 price, by ETS.
Right there, at the CO2 price traded at ETS, the biggest headache for the project developers begins. In 2009 ROAD assumed a price of €15 per tonne CO2, rising to €30 per tonne CO2 to ensure that its accounts are balanced. The ROAD assumption turned out to be incorrect: instead of rising, the CO2 price at the ETS dropped from €15 in 2009 to a mere €7per tonne today. With a deficit of over a hundred million euros the CCS project wasn’t viable and therefore put on hold for years.
”Until a few months ago we were in dire straits”, Hans Schoenmaker, CCS director of ROAD from its inception in 2009, comments. ”But thanks to additional strong commitments of German, Norwegian and, possibly, French, governments to financially contribute, it’s almost sure we can find additional EU support to built our CCS plant next year and become operational in 2018. Over the course of four years we will demonstrate a post-combustion process by capturing CO2 with a solvent, separate pure CO2 and then transport and inject it in an almost depleted gas field. If the project turns out to be successful, from 2022 on we may be able to continue CCS operation.”
Changing political mood
Meanwhile, fierce opposition to coal-fired power stations is gaining momentum in the Netherlands. Whereas NGO’s and leftist parties couldn’t get a foothold during negotiations for the much hailed Dutch ‘Agreement on Energy for Sustainable Growth’ (or Energieakkoord) and modern coal-fired plants were exempted from previous coal taxes in 2016, the mood in the country has changed. A week before COP21 in Paris, 64 university professors signed an open letter (in Dutch) to Prime Minister Rutte to close all coal-fired power stations, including the three modern ones. According to the scientists closing them all is necessary, affordable and viable. It’s a point of view shared by a marginal parliamentarian majority nowadays.
One of the signatories is Geert Verbong full professor in Transition Studies at the School of Innovation Sciences at the Technical University Eindhoven. He is specialised in the history of technology and has been working on the social dimensions of smart grids and the implementation of solar PV. “Putting millions of tonnes of CO2 into the atmosphere is wrong policy”, he says. “Even professor Jacqueline Cramer, environmental minister during the Balkenende IV administration (2007-2010), has changed her mind and is in favour of closing all coal-fired power plants, even the new ones that have been built when she was minister. In effect, CCS functions as a subsidy on fossil fuels. It is better to introduce a CO2 tax because the EU ETS is not functioning at all. Incineration of biomass in coal-fired power plants is a wrong option as it prevents the development of a bio-based economy. It is an illusion to think there are no losers during the energy transition. That’s ‘creative destruction’ according to Schumpeter. Fossil energy sources with high marginal costs are doomed. Renewables like wind and solar PV with no marginal costs and steadily diminishing prices will be the future.”
Learning curve for biomass
Professor dr. André Faaij, Academic Director of the European Energy Academy Europe and University Professor at the RuG (University of Groningen), also a lifelong scientific researcher of energy systems, bio-energy and CCS for IEA and IPCC, doesn’t agree with the rationale of this so-called ‘coal letter’. ”It’s politically biased”, he says. “Many scientists that have signed, aren’t experts in energy systems or technologies. That’s not according to rigorous scientific standards. Also, most of them don’t know the implications of their proposals”, he continues. ”One way or the other, closing three new coal-fired power stations worth some six billion euro, means someone will have to pay for the losses, whether it will be the energy companies who will claim that prior deals are broken or the consumers. This is destruction of capital, money that won’t be spent on renewable energy or energy efficiency.”
But there’s more. According to Faaij, closing the brand new coal-fired stations - which are flexible to complement renewable capacity and are suited for high shares of biomass co-firing - will put the development of the bio-based economy on hold. ”Only with high volumes of biomass, stable markets and optimizing supply chains we can lower biomass costs over time’, he continues. ”This learning curve is essential for the bio-based economy: biomass can be refined to extract valuable sugars or ethanol while lower grade fractions for co-firing will reduce the costs for energy generation considerably. Although I do agree that burning coal as such is disastrous for the climate, when biomass co-firing is applied in combination with CCS it can also act as leverage for the bio-based economy and the necessary CCS infrastructure we both need during this century. Once these power stations have closed down, this biomass can be used for advanced bio refining and CCS to achieve zero or negative CO2 emissions. In that way, coal-fired power stations can be used as a start for essential transitions in the energy system towards a low-carbon economy.”
Towards a regional energy hub
According to Corné Boot, manager Public and Regulatory Affairs at E.ON Benelux, the new MPP3 plant not only is a state of the art technology. It also functions as a regional energy hub for the whole Rijnmond (Rotterdam, Leiden and The Hague) area as well. Boot: “Within the EU, the Netherlands has the most strict emission standards. The MPP3's environmental performance is better than any other coal-fired plant in the EU, just as its fuel efficiency. Whereas 40% is average, MPP3 is generating at approximately 47%.”
Though Boot admits its CO2 emissions are almost twice as high as gas-fired power stations, E.ON believes the environmental footprint of MPP3 will come on a par with gas-powered plants in the long run while keeping the costs substantially lower and its performance flexible. “As a regional energy hub MPP3 will generate all kinds of products and energy flows”, he says. “Excess thermal energy may go to residential quarters in The Hague, Rotterdam and to greenhouse horticulture near by. Using natural gas for heating is expensive nowadays. Moreover, greenhouses can also use our CO2 emissions to stimulate plant growth. Other industrial processes already buy steam, demi-water and gasses. And the chemical sector can use, amongst others, fly ash for cement and gypsum for plasterboards as a by-product of hard coal. Biomass incineration, to conclude with, is also a push for the development of more advanced bio-refineries, otherwise some parts of the chemical sector might move abroad. Instead of losing innovative industrial activity, we may even export parts of this state of the art technology to BRIC countries, not in the least CCS.”
Image: MPP3. Source: E.ON.