Norway Embarks on Mission Improbable

The stench of tons of compressed waste is something you get used to. High above the warehouse floor, tightly packed bales of British rubbish are stacked and waiting to be burned, across the North Sea from the homes in Bristol and Birmingham that produced them.

In a modern plant wedged between pine and granite on the edge of Oslo, Nordic power company Fortum is using British rubbish to generate electricity and warmth for a nearby district-heating project. This energy- from-waste plant alone incinerates 45 tons of rubbish at 850 degrees Celsius every hour.

“It’s the smell of money,” laughs Pal Mikkelsen, the plant’s director.

For years Norway has charged British cities to take their waste while creating a valuable source of heat and energy on the side. Now it has plans to create a third source of income from UK rubbish.

Mikkelsen is eager to explain how the work being done at his plant could play a role in helping his country take Britain’s carbon emissions too.

The Fortum plant is vying with other high-carbon industrial players to be part of a radical national programme to turn carbon capture into a new pan-European industry, with Norway in the driving seat.

Norway’s plans are audacious. Its government believes that within the next five years it will be able to develop a system to rid the whole of Europe of its unwanted carbon emissions.

Under the scheme, CO2 from factories all across Europe could soon be piped on to ships and brought to Norway. Cutting-edge carbon storage sites will then inject the gas deep into salt caverns under the seabed.

The individual elements of this chain are technically proven but carbon capture and storage (CCS) has so far failed to gain traction across Europe. Investors have balked at the eye-wateringly high costs and daunting risks. Governments, too, have quickly lost their nerve.

It is almost two years since the UK Government abruptly pulled the plug on £1bn worth of funding for two major CCS power plant projects backed by some of the biggest energy companies in Europe, for instance.

Norway believes that by pushing ahead with its own CCS plans the technology may find its way back on to the agenda. This could provide a new industrial avenue for the country in a similar way that Britain’s rubbish helped create an energy-from-waste industry.

The Norwegian “CCS Highway” has a better chance of success in large part by circumventing the need to court nervous investors. It benefits from direct government funding.

The industrial partners taking part in the first phase of the scheme will be responsible for upgrading their plants to trap CO2. The state will take on the considerable risk involved in creating a transport and storage network, however.

This will include gas-carrying ships, subsea pipelines and a storage facility some 40 miles off the coast of Norway, in saline caverns beneath the seabed. The set-up bill is estimated at €1.4bn (£1.2bn) and the system is expected to cost €100m a year to operate.

Trude Sundset is chief executive of Gassnova, the state enterprise created to meet this tall order.

“A lot of European countries have tried and, to be honest, failed. The only projects we now see are in Norway. We will prove that CCS is possible, but also that it is necessary to combat climate change,” she says in Gassnova’s Porsgrunn offices.

“We’re taking a holistic approach. We believe that you cannot build one full-scale project. Each project’s learning needs to feed back into research for bigger projects. That’s when the technology providers can really see that it is worthwhile to find new ways to make things more efficient. You’ll never see costs reduce until you create a market,” she says.

Norway itself uses hydropower to meet 90pc of its electricity needs. Its relentless commitment to “green” innovation means it has a carbon footprint so small it would only need to use 1pc of its subsea storage – so it is calling on Europe to use the salt caverns too, and has found a receptive audience.

A key to resurrecting European CCS ambitions has been a shift in focus from power generators to industrial sites and gas networks. The pace of carbon cutting in the electricity sector is fast gaining speed as renewable energy sources come on stream, but for big industrial plants CCS is the only known solution.

In the UK, heating and industrial emissions make up almost half of the total greenhouse gas emissions. The proportion is likely to grow as renewable power and electric vehicles take off.

“The UK has certainly transitioned from where CCS was being investigated to provide a new fleet of coal-fired power stations – that is long off the agenda now,” says Bruce Adderley of the UKCCS Research Centre.

“The areas of focus that are coming through strongly now are both industrial CCS and the potential to use CCS in conjunction with converting the gas grid from running on methane, to hydrogen,” he says.

Leeds City council has already taken steps to convert the gas grid to run on hydrogen, rather than natural gas or methane. The process will include carbon capture technology to trap the CO2 produced. Similar plans are afoot to create a “hydrogen cluster” in Manchester and Liverpool.

“The Norwegians have seen what we in the UK have done in adapting natural gas to hydrogen and have done some strategic thinking of their own. They have an enormous gas industry and they want that industry to continue in the future,” Adderley says.

Norway is the UK’s largest foreign source of gas. It also relies heavily on its oil and gas exports to fuel its wealthy economy and support almost 200,000 jobs. Last year oil and gas exports accounted for NOK350bn, or £34bn, of which gas was worth almost £12bn. Its prized natural resource is expected to gush at record rates this year after the Norwegian government raised a production cap at its giant Troll gas field.

Norway’s state-backed oil company Statoil said last month it has begun looking at the possibility of working with power generator Vattenfall to convert its Magnus gas-fired power plant in the Netherlands to burn hydrogen while storing the leftover carbon emissions in a storage facility.

“For them, it’s a win-win. They are hoping to make use of the natural gas they have, and secure use for the carbon storage assets they are developing. The same model could be used in the UK if the relevant companies decided they wanted to do that,” he says.

A government hand in CCS is what could mean the difference between whether the UK is able to use its own natural assets rather than rely on Norway.

“The Norwegians have offered to be the solution for the whole of North-West Europe and are galvanising industry to do just that. ‘Bring us your carbon,’ they’re saying. But there’s no reason that the UK couldn’t do that itself,” he adds.

In Britain’s industrial heartland, business leaders have been emboldened by fresh political support for CCS and are investigating whether they could do just that in Teesside.

The Tees Valley is home to the largest chemicals complex in Britain, and the second largest in Europe. Its greenhouse gas emissions are also three times as large as any other part of the country. Efforts to forge a future in a low-carbon world are moving ahead apace, says Sarah Tennison, from the Teesside Collective.

The cluster includes major employers in Teesside, such as Lotte Chemical UK, BOC, CF Fertilisers, Sembcorp Utilities UK and SABIC UK. It is also home to the UK’s largest hydrogen reformer working together to establish Teesside as one of Europe’s most attractive locations for future clean industrial development.

Tennison says it could save 11m tons of CO2 over 15 years if its first phase plan moves ahead. This would take an investment of £110m to construct the capture sites, and £29m every year to operate, but at £58 for every ton of carbon saved it is still a bargain, Tennison says.

It would prove cheaper than present day offshore wind farms and projections for new nuclear plants. In return UK plc would also gain an annual economic boost of £2.5bn, export £4bn worth of products and generate a £2bn trade surplus every year.

“I think government is taking this seriously,” Tennison says. They understand that the transportation and storage elements of this plan may need new business models to succeed. So, yes, it would be a relatively new thing for government to own regulated assets but it wouldn’t need to be long term. Once the risks have been managed and the costs are better known the hope is that project financing could flow into the newly created market.

“The Government really needs to take that approach if it’s going to succeed at CCS. It would be a massive step-change but it would also be a massive win for the UK as well,” she says.

Source: www.worldoil.com