Economic, process and reservoir modelling for evaluating large-scale deployment of carbon capture and storage

Abstract

Carbon capture and storage (CCS) is a key technology for least-cost climate change mitigation, but its deployment rate is significantly slower than projected. This thesis provides novel, quantitative insight into the myriad of risks associated with CCS and provides pragmatic solutions to the development of large-scale CCS from multiple angles. Using the financial metrics that inform private sector investments, this work shows that lack of investor confidence adds a large risk premium to the cost of CCS, contributing 40-70% of its cost. Lowering perceived risk is found to provide a more significant cost reduction than technological innovation would (e.g. with better solvents for capture). Reduced risk could result from governments acting as a `loan guarantor' in the event of CO2 transport and storage failing to meet demand. The value of the oil market, CO2 storage credits, and technological learning on the deployment rate of CCS are assessed through the development of MIICE, a model of iterative investment in CCS with CO2 enhanced oil recovery (CO2-EOR). With a highly detailed representation of cost metrics, financing, the CO2-EOR process and characteristics for thousands of fields, MIICE demonstrates that even with an increasing storage credit (starting at 25$/tCO2), technological learning available and oil prices below 85$/bbl, CCS deployment with CO2-EOR revenue is not lucrative enough to trigger gigatonnes worth of investment by mid-century. With a UK example, the impact of CCS deployment and operation scenarios on reservoir behavior is assessed by simulating varying CO2 injection rates, in their frequency and amplitude, into a geological reservoir model of the UK's main storage sink: the Bunter Sandstone saline aquifer. This work demonstrates the resilience of the storage sink to such variations and provides evidence for accurately representing CO2 storage in energy systems models. By developing detailed process models of four variations of CO2 compression and purification units (CPUs), the potential for an accommodating capture process, in its cost and product purity, is exhibited. Considering a multi-source to sink approach, this result is used to demonstrate the value of a transport network in reducing total system cost i.e., of a group of capture plants. The value of shared capture infrastructure in reducing total capture cost for multiple point sources is also demonstrated. This body of work demonstrates the importance of commercial innovation and a holistic view of CCS in order to achieve its large-scale deployment. The public-sector can play a key role in enabling this with: greater focus on policies eliminating the cross-chain risk of CCS, stronger incentives for CO2 market development, measures to improve public perception and representation of CO2 storage, and schemes attributing greater value to multi-project CCS development rather than individual, isolated projects.