Energy Transition Outlook 2021

ENERGY TRANSITION OUTLOOK 2021

The investment case for CCUS The volume of capital needed to flow into CCUS creates opportunities for a variety of fundingmechanismsandbusinessmodelstobeimplementedtosuitinvestorriskappetite. As several first-of-a-kind projects are beginning to progress on a global scale, a better understanding of the cost for CCUS is emerging, along with an increased understanding of appropriate allocation of risk. This, coupled with the growing commitment from the UK in providing clarity over business models, will be key in growing investor confidence to commit to the scaling of CCUS. The NSTD has modelled that the total transport and storage costs for a capacity of 10 million tonnes per annum could be between £2-3 billion. This will be partly financed from industry, alongside a contribution from the government CCUS Infrastructure Fund announced in the Budget in 2020. The announcement by government of support for Hynet and the East Coast CCUS Clusters is welcomed. However, to achieve the net zero ambition all of the five projects identified as eligible for Phase 1, and additional projects, need to be progressed rapidly. The capture process requires a range of different technologies and is as equally as important as the T&S side. The lead option for many proposed capture projects is amine processing, which involves passing flue gases through a solution that absorbs carbon dioxide. The costs associated with capture processes per tonne are estimated to be around three times that of the transport and storage element. Government is also working on business models that will support capture from industrial facilities and power generation.

Source: BEIS Industrial Decarb Strategy

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