Energy Transition Outlook 2021

ENERGY TRANSITION OUTLOOK 2021

To provide a secure and reliable CCUS Transport and Storage network, the below steps must be taken:

The UK’s regulatory regime It is expected that carbon T&S infrastructure will be an economically regulated asset and will form a critical UK future infrastructure network. As the business models are developed, it is important that appropriate regulation is devised to capitalise on oil and gas assets as part of the regulated asset value. This will be a key component in ensuring the net-positive-value of the project and attracting necessary investment into this space. At present, there is no single CCUS regulator with oversight of the whole value chain, nor an independent economic regulator for the T&S model. It is now expected that BEIS will perform this role in the initial phase with an established regulator potentially taking on these responsibilities at a later date. Currently, the OGA is the licensing authority for such activity, with engagement from the Crown Estate where necessary. Once such a regime is in place, CCUS projects will develop in clusters through funding from both government and the private sector. The UK has the ambition of expanding these clusters to begin to form a UK-wide carbon network as the projects become more economically viable. It is expected that as the current and future projects grow, there will be a decreasing need for government support as CCUS becomes commercially viable. To reach this point, overcoming market failures by progressing all cluster projects rapidly now is key. Delay will prejudice the UK’s ability to decarbonise at the required pace to meet its net zero targets. There is also a need to expand exploration and appraisal activity in order to look beyond the initial cluster areas. If CCUS is expected to reach 100-150million tonnes by 2050 this implies 5- 10 gigatonnes of capacity is likely to be required to meet such UK’s long-term ambitions. Additional action is therefore required now to support the development of “bankable” storage locations.

Construct and/or identify potential re-use of infrastructure

Evaluate store and cap rock potential

Dry CO 2 transported under-pressure to formation (store)

Remote subsea wells inject CO 2 into formation

CO 2 remains trapped due to impermeable cap rocks and traps

Sealing the store, decommissioning, and ongoing monitoring

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