Dec 2, 2020

Germany energy regulator to close 4,788MW of coal plants

Coal
Germany
Environment
Dominic Ellis
3 min
Move reflects Germany’s commitment to ending the fossil fuel, and idles the equivalent of five nuclear power plants in one step
Move reflects Germany’s commitment to ending the fossil fuel, and idles the equivalent of five nuclear power plants in one step...

Germany’s energy regulator says as much as 4,788MW of coal-fired power generation capacity will cease to be marketable from January 1, as part of a policy to take carbon-polluting capacity out of the market, according to a Reuters report.

The move reflects Germany’s commitment to ending the fossil fuel age, idling the equivalent of five nuclear power plants in one step, while also cushioning the impact on utilities, regions and employment.

“The tenders have met with a positive response from the operators. The round was clearly oversubscribed,” says Jochen Homann, the head of the Bundesnetzagentur regulator.

The average payment that operators will receive to shut plants is £59,626 per MW, incurring total public spending of £285.2 million. Bids ranged between £5,441 per MW and £134,985 per MW.

Germany has decided to abandon coal by 2038 and achieve a mostly carbon-free energy system by 2050.

According to a statement from the country’s Federal Ministry for Economic Affairs and Energy from March this year, the country’s adoption of the Act on the Phase-out of Coal-fired Power Plants will take an entire generation to complete. 

“It is a long-term project that comes after tough debates and a milestone for Germany’s energy transition. Germany is one of a handful of industrial countries in the world that is phasing out nuclear power by 2022 and power generated from coal by 2038 at the latest, and is deploying an active structural policy that provides clear prospects for the people living in the regions affected by this. 

"We are taking care to design the coal-phase out in a way that delivers legal certainty, is based on sound economics, and provides for a social equilibrium,” said Peter Altmaier, Federal Minister for Economic Affairs and Energy, at the time.

“A number of power plants will be retired before the end of the year. At the same time, we are expanding the use of renewables and retrofitting coal-fired power plants with CHP technology. Our structural change projects for local communities are also to begin this year. We will soon be signing an agreement to this effect between the federation and the Länder where lignite is being mined and decide on specific projects within the coordination body set up by the federation and the Länder.”

The Federal Ministry report says that the Act on the Phase-out of Coal-fired Power Plants contains provisions stipulating a gradual phase-out of electricity generation from hard coal and lignite by 2038 at the latest; a continuous monitoring of the energy security situation; the deletion of CO2 certificates; compensation for electricity users in the event of a rise in electricity prices resulting from the coal phase-out; and adjustment payments for older employees working in the coal sector. 

The loss of electricity caused by the gradual phase-out of coal will be compensated for by a higher renewables target of 65 percent by 2030. At the same time, funding for combined heat and power will be extended and developed to encourage the transition from coal to more flexible and climate-friendly power sources, the report adds.

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Jul 29, 2021

Carbon dioxide removal revenues worth £2bn a year by 2030

Energy
technology
CCUS
Netzero
Dominic Ellis
4 min
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades says the UK's National Infrastructure Commission

Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission

Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.

The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.

The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture. 

It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.  

The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020. 

Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.

The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.

While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.

Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.

Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse. 

"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.

“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.” 

The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets. 

Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.  

Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."

McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:

  • Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
  • Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
  • Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
  • Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
  • The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere

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