The Nuclear Effect on Carbon Capture Plans

As the Fukushima crisis throws a question mark over nuclear energy use, many European countries are trying to accelerate the development of technology that cleans carbon dioxide emissions from conventional fuel plants. "The use of coal in some countries like China and India is actually growing," European Union Energy Commissioner Günther Oettinger said at the Mar. 1 inauguration of a carbon capture project in Italy. "If we can prove that this technology is safe and reliable, we will have a product that we can export in countries where coal production remains key."

Nuclear energy, which offers homegrown low-carbon power to nations that use it, took a blow from Fukushima, especially in Europe. Germany halted 25 percent of its nuclear capacity and may close its oldest plants permanently after the Green party surged in Mar. 27 state elections. Switzerland shelved plans for new reactors, the U.K. said it may delay plans, and Italy is holding off on its newly launched nuclear program.

Any lost generation is likely to be made up with natural-gas-fired plants, according to Bloomberg New Energy Finance (BNEF), but the trend also lends urgency to projects seeking to extract carbon emissions from fuel combustion and lock it deep underground. While countries from China to the U.S. are looking for solutions, Europe has committed the most government funding for projects on carbon capture and storage, or CCS—$10.5 billion, vs. $5.1 billion in the U.S., $4.9 billion in Canada, and $2.5 billion in Australia, according to BNEF. Yet even in green Europe—home to the world's largest cap-and-trade system for carbon emissions as well as an array of national carbon taxes—the pace is slow. Much of the money committed to CCS in Europe won't be allocated until 2012.

The main problem with CCS is cost: "Capturing carbon is really expensive," says Age Kristensen, vice-president of technology at Statoil in Calgary. "It's just not economic." Statoil is the world's largest CCS operator, with three projects in Europe and Africa. Its Salah (Algeria) project injects about one million tons of carbon dioxide a year below the Saharan desert, using solvents to separate carbon from natural gas. Statoil also has a project under the North Sea that has been operating since 1996.

The Italian pilot project, at energy company Enel's coal-fired plant near the southern city of Brindisi, is the latest in a series of European Union-sponsored initiatives. It will cost €20 million ($28 million) and test solvents and new technologies for carbon capture. The most efficient solvents will be used in a €1 billion project at Enel's Porto Tolle plant in Northern Italy, which will have a capacity of 2,000 megawatts and hopes to capture 1 million metric tons a year, or 90 percent of its carbon emissions. The plant is one of six partly EU-financed programs in Spain, the U.K., the Netherlands, Germany, and Poland. All six programs aim to be operational by 2015 and commercially viable by 2020, with capture rates between 80 percent and 90 percent.

Sauro Pasini, head of Enel's research and development department, says the testing seeks cheaper, more efficient ways to clean emissions and cut costs from about €90 per captured ton of CO2 to about €45 a ton or less—still far higher than the current €16 a ton for carbon permits trading in Europe. CCS skeptics such as Carlo Stagnaro, a researcher at think tank Istituto Bruno Leoni, say the cost of CCS needs to be €20 or €30 for it to be economically viable. "Coal is the cheapest energy source ... and what do we do? We make it the most expensive by spending loads on cleaning it up. ... We could spend the money on other things, on safer nuclear," he says.

The only current market for the gas is pumping it into depleted oil wells to help extract more petroleum. Storing it in underground aquifers or under seabeds is all cost, no revenue. "Finding efficient storage and capture technologies would solve both pollution and energy security issues," says Giuseppe Zollino, a nuclear engineer and professor of economics of energy at the University of Padua, Italy. "That's why everyone is scrambling to do it, but it means hefty government funds in the development phase."

While debates rage over carbon capture efforts, coal demand is seen rising 20 percent from 2008 to 2020, according to the latest report by the International Energy Agency. That's one reason Enel Chief Executive Officer Fulvio Conti believes finding ways to make carbon capture cheaper and safer is worth it. "Coal is here to stay in the near future, and we can't afford to run the risk of being in the cold and dark because something happens in the Gulf, or in North Africa, or elsewhere," he says. "We need to keep our options open."

The bottom line: Efforts to capture and store carbon emissions, while costly, may gain momentum after the partial nuclear meltdown in Japan.

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