• 6 hours Shell Oil Trading Head Steps Down After 29 Years
  • 10 hours Higher Oil Prices Reduce North American Oil Bankruptcies
  • 12 hours Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 13 hours $1.6 Billion Canadian-US Hydropower Project Approved
  • 15 hours Venezuela Officially In Default
  • 17 hours Iran Prepares To Export LNG To Boost Trade Relations
  • 19 hours Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 1 day Saudi Oil Minister: Markets Will Not Rebalance By March
  • 1 day Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 1 day Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 2 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 2 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 2 days Santos Admits It Rejected $7.2B Takeover Bid
  • 2 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 2 days Africa’s Richest Woman Fired From Sonangol
  • 2 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 3 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 3 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 3 days Lower Oil Prices Benefit European Refiners
  • 3 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 4 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 4 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 4 days OPEC To Recruit New Members To Fight Market Imbalance
  • 4 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 4 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 4 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 4 days GE Considers Selling Baker Hughes Assets
  • 4 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 5 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 5 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 5 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 5 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 7 days The Oil Rig Drilling 10 Miles Under The Sea
  • 7 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 7 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 8 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Graham Cooper

Graham Cooper

Graham is a writer for Environmental Finance.Environmental Finance is the leading global publication covering the ever-increasing impact of environmental issues on the lending, insurance, investment…

More Info

Coal Fired CCS Projects Facing Funding Challenges

Coal Fired CCS Projects Facing Funding Challenges

Carbon capture and storage (CCS) faces formidable funding challenges, according to a recent survey of private sector capital providers.

“Across Europe, there is likely to be private sector finance for only two demonstration projects, rather than the 12 hoped for,” conclude the Climate Group and the Ecofin Research Foundation (ERF), who conducted the survey on behalf of the Global CCS Institute.

The survey comprised a series of questions to more than 30 institutions about the likely risks and returns associated with first-generation industrial-scale CCS. Although based in Europe, many of the private sector finance providers have a global remit.

The questions centred on a hypothetical 2GW new-build coal plant with post-combustion CCS. The total cost of the plant was estimated at around €6 billion ($8 billion), of which €4.7 billion would need to come from the private sector. A carbon price of at least €100/tonne of carbon dioxide (CO2) would be required to make such a plant competitive with a similar plant without CCS, say the Climate Group and ERF in a report on the survey. This compares with a current price of around €15/t in the EU Emissions Trading Scheme.

Another risk facing the technology is a drop in gas prices, as might result “if the shale gas revolution that has hit the US comes to Europe”. Coal-fired CCS projects would then “find their economics totally undermined, even if gas-fired plant had to fit CCS”, says the report.

Among other findings, the report notes:

• Large-scale private equity funds would be wary of the operating challenges of CCS;

• It is unlikely that CCS will be able to meet the high returns required by venture capitalists;

• Infrastructure funds generally avoid high technology and construction risks such as those associated with CCS;

• Bond holders or shareholders of large pension funds and insurance companies would be happy for corporates to use their balance sheets to finance CCS, but to the tune of no more than 1-2% of group assets;

• Debt may be available for CCS projects, but only if three key issues are addressed: performance guarantees to cover the whole power generation and carbon capture operation, sponsors with a track record of implementing large complex projects and, in the long term, plants with CCS must be capable of competing with other sources of power without public funding.

CCS involves capturing CO2 emissions at the power plant, compressing it, and transporting it to underground formations such as depleted oil or gas fields for indefinite storage. 

By. Graham Cooper

Source: Environmental Finance




Back to homepage


Leave a comment
  • Anonymous on September 26 2010 said:
    Although I have not studied this issue as thoroughly as I should have, I still know a little about it. It is possible that CCS is a nutty (i.e. uneconomical) idea, and on the basis of what has been going on in Germany with CCS (and the speculation about it), it is VERY possible. Better find somebody to study CCS who really and truly knows the relevant economics. I suspect that I would have been the right man about ten years ago, but unfortunately I have almost completely lost interest.
  • Anonymous on September 26 2010 said:
    As long as economic planners in Europe consider CO2 to be a pollutant and an ultra-hazardous material, they will find themselves stuck at this impasse.Coal IGCC is a highly efficient and economical -- and clean -- way to use coal to generate power. But if you feel you must sequester the CO2 produced, you have already hamstrung yourself.It is a quasi-religious belief backed by many volumes of pseudo-science, but it exerts an enormous force upon European natinal and EU political and economic planning. It is a form of energy starvation and economic suicide, but it makes the bureaucrats feel as important as high priests and bishops within their very own secular religion.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News