In light of recent news surrounding the delay of Drax’s project in England, this month’s edition of the Carbon Capture Update, powered by our new CCUS Projects Table, will review the global pipeline for bioenergy with carbon capture and storage (BECCS) power plants.

• Calpine announced a new CCUS project, already in FEED, at its Baytown Energy Center natural gas power plant. This is the second CCUS retrofit that Calpine is developing at its Houston-area power plants. Houston has seen particularly strong interest in CCUS development, with several regional storage hubs and more than 17 Mt/y of point-source capture capacity in development.
• The Sakakemang natural gas development, a joint venture of Repsol, Petronas, and MOECO, has elected to enter FEED despite concerns over the low productivity of early test wells. As the gas stream contains 26% CO­₂, CCUS is necessary for Repsol to meet its commitment of net-zero emissions from new projects. The cost to capture and store CO­₂ for this project has been previously estimated at less than $25/t, yet costs could be much higher if field productivity cannot support the project’s original scale. The expense and difficulty of CCUS, in addition to the project’s troubled fundamentals, could weigh against this project reaching FID.

Spotlight: Global Development of BECCS Faces Policy Risk

Drax announced March 21^st that it had paused its plan to retrofit an existing biomass power plant in northeast England with carbon capture. Uncertainty around the longevity of biomass fuel subsidies was cited by Drax as jeopardizing the project’s viability. Separately, the UK government declined the project for priority in receiving public capital funding, though officials later announced that bilateral talks with Drax would aim to move the project forward. In response, Drax stated that it remains willing to advance the project with supportive commitments from the government. It is worth noting that political brinkmanship may be motivating some of these public statements, as they could strengthen leverage in negotiations. Nonetheless, Drax’s project highlights some headwinds and controversies that bioenergy with carbon capture and storage (BECCS) faces globally.

Though technologically similar to post-combustion carbon capture, which could be applied to a fossil fuel power plant, BECCS is conceptually distinct from most forms of carbon capture in that it can claim negative emissions. Biomass fuel typically is sourced from trees or other plants that capture CO­₂ from the atmosphere. When this fuel is harvested and combusted, a BECCS system can then capture the CO­₂ before it re-enters the atmosphere, thus the system produces negative lifecycle emissions. This system is often compared favorably to direct air capture (DAC), as BECCS is generally estimated to be a much cheaper method for removing CO­₂ from the atmosphere.

However, adoption of BECCS faces several obstacles. Power generation from biomass tends to be significantly more expensive than natural gas and other fuels, necessitating fuel subsidies, carbon prices, or both to be competitive. Additionally, BECCS is controversial due to concern over fuel sources. Critics claim that improperly managed fuel production can contribute to deforestation and undercut the net emissions reduction achieved.

Globally, commercial-scale BECCS projects are concentrated in Northern Europe. The EU’s mandatory carbon markets, subsidies for bioenergy, and a large fleet of existing facilities have helped to support development there. Even so, only one modestly sized project has passed FID, mustering a capacity of just 0.07 Mt/y. The delay of the Drax project, which aimed to capture as much as 8 Mt/y, could bode poorly for the prospects of BECCS mega projects in the future, particularly outside of the EU.

If you are interested in our new CCS Project database, please email info@btuanalytics.com with your name, company info, and the subject as “CCS Database.”