Boris Johnson wanted to make Britain ‘the Saudi Arabia of wind’. But Grant Shapps is keen to send Britain’s green agenda in a new direction. Speaking at The Spectator’s Energy Summit on 26 April, the Secretary of State for Energy Security and Net-Zero announced the government’s ambitions for Carbon Capture, Utilisation and Storage – CCUS – where carbon dioxide is sucked out of the air with the aid of solvents and either put to use or buried deep in the ground where – hopefully – it will remain locked up forever after. The technology does not merely offer the chance to cut future emissions but also to remove past emissions from the air.
‘I can’t promise that it will match the glamour of the jet engine,’ he said, citing a British triumph of the past, developed in his Hertfordshire constituency. ‘I wager that most people have never heard of CCUS. But they will soon.’ Britain, he asserted, is a ‘geological goldmine’ when it comes to CCUS – thanks to large caverns beneath the North Sea from which oil and gas has been extracted in the past. Beneath the UK continental shelf is the potential capacity to store 78 billion tonnes of carbon dioxide, one of the highest totals of virtually any country. That is equivalent to 100 years’ worth of UK emissions plus 100 years’ of European emissions. CCUS technology is vital if we are to reach net-zero carbon emissions, he said, because there are some industries, such as cement and chemicals, which have no other way of going green. But with CCUS, we could go carbon negative.
What’s more, CCUS is a technology in which Britain has a lead, Shapps added, being one of only four or five countries which were ready to develop it. To this end, Chancellor Jeremy Hunt’s recent Budget announced £20 billion for CCUS – an enormous sum even compared with that available for many other zero carbon technologies. The money will be used to try to create three clusters which could create 50,000 jobs by 2030. With carbon credits trading for £90 per tonne of carbon, it could earn Britain £5 trillion from storing other people’s emissions.
Not everyone is quite as optimistic as Shapps when it comes to CCUS, however. Also speaking at the summit, Labour’s Shadow Minister for the Green New Deal and Energy Alan Whitehead confirmed that Labour would also support CCUS, but only up to a point. ‘The idea that CCUS itself is going to sweep up all carbon and we can carry on as we did before is fanciful,’ he said. ‘Shapps does seem to have discovered CCUS very suddenly.’
The Conservative government is not new to CCUS, however. Indeed, its history on the subject may lead some to wonder how realistic Shapps’ ambitions are. During the coalition years George Osborne launched a £1 billion project to support a full commercial scale CCUS plant. A competition narrowed down the candidates for the subsidised project to one: at Peterhead power station in Aberdeenshire. But then in 2015, days ahead of the Paris climate summit, the government suddenly cancelled the project. As a result, we still don’t have a full-scale working CCUS plant. What has changed to justify the government’s sudden enthusiasm?
Lord Browne of Madingley – former chief executive of BP, now running an investment fund ‘BeyondNetZero’ – has spotted another potential flaw in the government’s plan for CCUS. ‘CCUS is not the only way to remove carbon from the atmosphere,’ he told the summit. ‘If you can figure out ways of using the ocean to absorb more carbon, you might get a lower cost way of storing it.’ He didn’t expand, but other technologies under development involve not just storing carbon but turning it into something of value – the ‘U’ in CCUS. If we can extract carbon from the atmosphere and turn it into building materials or biochar (which can improve some soils) then we could have an industry with a marketable product, not just earning money through carbon credits. But such technologies could undermine any competitive advantage that Britain has with its underground caverns.
Shapps was also challenged for his assertion that Britain would have the cheapest energy in Europe by 2035, on account of its huge investment in offshore wind power. Britain already has the first, second and third largest offshore wind farms in the world and is now building the fourth largest. The Japanese and Koreans are impressed, claimed Shapps, and wish they had seen the potential of wind power.
Less impressed is Dieter Helm, Professor of Economic Policy at the University of Oxford. ‘I’ve been around long enough to hear these speeches before,’ he told the summit. ‘It is 16 years since the then Labour government produced the first paper on CCUS. All these speeches want to pretend that the trilemma of energy cost, energy security and carbon emissions will go away. I don’t believe it. There is no escape from the trilemma. You have to tell the public the truth. To have an energy transformation is going to cost a huge amount of money, and it is going to rely on overseas investment.’
Britain has an economy which is 80 percent services, says Helm, a public with little in the way of savings and an economy with a huge current account deficit. That means that most investment will have to come from overseas. We don’t have a major manufacturing base, and a lot of net-zero technology requires large quantities of minerals which have to be mined abroad – which means we don’t have guaranteed supply chains.
One thing was noticeably absent from Shapps’ speech to the summit: hydrogen. Given the importance that the government has put on the ‘hydrogen economy’ in the past, it was surprising more lip service wasn’t paid to this technology. But Lord Callanan, Minister for Energy Efficiency and Green Finance, was able to shed some light on the government’s latest thinking. ‘There’s a bit too much hype on hydrogen,’ he said pointedly – although that didn’t stop him claiming that hydrogen would create 100,000 jobs in Britain by 2050, a figure he admitted came from ‘sticking a finger in the air’. Hydrogen would play an essential role in decarbonising lorries, buses and construction vehicles, said Callanan. It could also provide long-term energy storage, with surplus wind and solar energy being used to generate green hydrogen.
But as for home heating, said the minister, hydrogen may play less of a role. ‘People think hydrogen is a straight swap for natural gas,’ he said. ‘But it very much isn’t.’ This is revealing because the government has suggested in the past that hydrogen might be used as an easy, like-for-like replacement for gas in the domestic gas grid. It is possible to feed up to 20 percent hydrogen into the existing gas network, but this is where it might stop.
The reason is because hydrogen is extremely expensive to produce. Even if the electrolysis required to produce ‘green’ hydrogen can be successfully upscaled – which it hasn’t been yet – it will be far less efficient to use electricity for this purpose than it would be using the electricity as the supply of energy itself. Therefore, the government is leaning heavily towards heat pumps for home central heating – with all the costs they entail. In the absence of electrolysis, hydrogen for large vehicles – in the short term at least – may have to come from ‘blue’ hydrogen produced from natural gas, with CCUS being used to capture the carbon dioxide produced as a by-product and pump it underground.
There is one further problem with hydrogen, which was raised in the session. Hydrogen molecules are so small that they have a tendency to leak from whatever vessel the hydrogen in stored in. Moreover, loose hydrogen is itself a greenhouse gas. The warming potential of loose hydrogen is something we may have to investigate before committing too much faith in its role in a net zero economy.
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