CCS current trends and future prospects

Introduction

To address the major cause of climate change, significant global policies, frameworks and investments are being directed towards large scale, long term, low carbon technologies such as carbon capture and storage (CCS). CCS stakeholders therefore seek to develop a 'first mover' advantage by developing the only technology with the potential to reduce CO2 emissions from power plants and factories.

Scope

*An understanding of how the EU Climate Package will impact the development of CCS technologies with the introduction of two key CCS incentive schemes.

*A list of the CCS R&D projects which the EC now supports, a list of CCS projects across the world and a review of announced European CCS projects.

*A review of the multitude of largely unresolved challenges that CCS faces and reasons why utilities choose to pursue their involvement with CCS.

*Reasons why future utility and industrial company profits may well be significantly influenced by the success of their engagement with CCS.

Highlights

The EU Climate Package marked an important milestone for CCS in the EU with the introduction of two key CCS incentive schemes. Together with key industrial, research and service partners, the EC now supports several R&D projects. In parallel, G8 leaders are calling for 20 demonstration plants to be launched by 2010.

A current review of announced large-scale EU CCS projects suggests that utilities have taken the lead on CCS, yet CCS projects across the world are still a rarity with the majority in the research and small-scale pilot phase. Moreover, low carbon prices and significant costs, risks and barrier to entry will see most shareholders steer clear of CCS.

CCS faces a multitude of challenges yet utilities are competing for EU funds as they come to realize that future utility profits may well be significantly influenced by the success of their current and future engagement with CCS. Other stakeholders with expertise across the CCS value chain are also contributing to the development of CCS.

Reasons to Purchase

*Determine the current true level of CCS uptake and how recent developments will affect the future deployment of commercial-scale CCS technologies.

*Tailor your corporate strategy, knowing that commercial-scale CCS will come to market by 2015, despite significant current limitations.

*Turn significant commercial, environmental and strategic limitations to your advantage and gain 'first mover' advantage.

Report Highlights
Highlights

The EU Climate Package marked an important milestone for CCS in the EU with the introduction of two key CCS incentive schemes. Together with key industrial, research and service partners, the EC now supports several R&D projects. In parallel, G8 leaders are calling for 20 demonstration plants to be launched by 2010.

A current review of announced large-scale EU CCS projects suggests that utilities have taken the lead on CCS, yet CCS projects across the world are still a rarity with the majority in the research and small-scale pilot phase. Moreover, low carbon prices and significant costs, risks and barrier to entry will see most shareholders steer clear of CCS.

CCS faces a multitude of challenges yet utilities are competing for EU funds as they come to realize that future utility profits may well be significantly influenced by the success of their current and future engagement with CCS. Other stakeholders with expertise across the CCS value chain are also contributing to the development of CCS.
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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 2
ANALYSIS 3
Increasingly, select utilities are being challenged by the future commercial, environmental and strategic potential of CCS 3
Overview 3
The EU Climate Package marked an important milestone for CCS in the EU, with the introduction of two CCS incentive schemes 4
Together with industrial, research and service partners, the EC now supports several R&D projects to develop CCS technology 5
G8 leaders plan for 20 demonstration plants to be launched by 2010 to ensure that CCS is commercially viable by 2020 6
A current review of announced large-scale European CCS projects suggests that utilities have taken the lead on CCS 7
CCS projects across the world are still a rarity and the majority are still in the research and small-scale pilot phase 8
The commercial uptake of CCS hinges on the emergence of a credible carbon price - which European policies are yet to deliver 9
The incremental costs and risks of the first few large-scale CCS demonstration projects will be too high for most shareholders 10
CCS still faces a multitude of challenges, most of which currently remain unsolved 11
Select utilities are competing for the €1.05bn EERP funds, but the main event is the 300 million allowances available under EU ETS 12
Future utility profits may well be significantly influenced by the success of their current and future engagement with CCS 13
Stakeholders across the CCS value chain are increasingly seeking to benefit from the early and low risk leverage of existing expertise 14
APPENDIX 16
Ask the analyst 16
Datamonitor consulting 16
Disclaimer 16
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List of Tables
List of Figures
Figure 1: The EU now supports, in whole or in part, several CCS R&D projects to develop CCS technology across Europe 5
Figure 2: G8 leaders have suggested building 20 pilot/ demonstration plants globally and the EU is planning to build up to 12 demonstration plants by 2015 6
Figure 3: A current review of announced large-scale European CCS projects suggests that utilities have taken the lead on CCS 7
Figure 4: The majority of CCS projects across the world are still in the research and small-scale pilot phase 8
Figure 5: Over the past 6 months, the carbon price has stabilized and has been trading in the €10-15 price range 9
Figure 6: Low carbon prices imply significant additional funding requirements and delayed commercial roll-out of CCS 10
Figure 7: The current planned and proposed CCS projects do not target significant emission levels from developing and emerging economies and this trend is likely to continue 11
Figure 8: EU utilities undertaking CCS demonstration projects are also those that tend to rely on heavily polluting fossil fuel power generation 13
Figure 9: Players currently involved in parallel ventures are deploying existing knowledge and building new expertise across the CCS value chain-a low risk, high return proposition 14
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