Is India ready to fully fund carbon capture technology?

20th Sep 2017

Following a news report that India is ready to fully fund carbon capture and storage (CCS) projects, WCA Policy Manager, Liam McHugh, has been looking at what this means for India and the general advancement of CCS technology around the world.

Liam began by looking at the implication of the announcement.

Q: What does this mean?

A: This is welcome news. India is taking a bold and promising first step to CCS deployment by acknowledging that the technology will play a vital role in its energy and industrial sectors by delivering near-zero emissions. In many ways, this should be considered the next logical step for enhancing the Indian economy’s existing low-carbon credentials developed through the rapid deployment of low-cost solar PV.

Q: Is this realistic? Can India fully fund a CCS project?

A: Minister Goyal’s statement seems to suggest that the Government is realistic in the role it will have to play to make delivery a reality. While technologically proven, CCS deployment globally has struggled due to a lack of policy equality in comparison to renewables. This experience should guide the India government.  Government support will be critical in the early stages, to deliver the first batch of CCS projects, particularly in the development of key infrastructure, such as storage sites.

To my mind, the bigger question is can India afford not to fully fund a CCS project. Looking globally, the Intergovernmental Panel on Climate Change forecast that the cost of climate action would be 138% more expensive without CCS. To give some idea of how this could impact a national economy, the UK climate advisory body estimated a 10-year delay to CCS deployment would cost an additional £1 billion to £2 billion cost per year in the 2020s, rising to between £4 billion and £5 billion per year in the 2040’s.

The costs borne by CCS today will be recouped for many decades to come.   

Q: Is India ready for large scale CCS?

A: As shown in other countries, CCS delivery can be complex. Equally, however, CCS challenges are primarily related to market issues, rather than the technology itself - key processes in the operation, such as CO2 separation, have been used for over 6 decades now.

I see several opportunities that exist today that suggest large-scale CCS deployment is a plausible scenario in the coming decades. In recent years, the Government has promoted plant efficiency in the country’s coal fleet, closing older subcritical stations and building or upgrading the coal plants to use supercritical or ultra-supercritical HELE technologies. The International Energy Agency considers HELE technologies a critical first step on the road to CCS given less emissions will need to be captured.

It is also worth noting that India can already boast an existing promising CCS project.  Carbon Clean Solutions (CCSL) based in Chennai is currently generating electricity on a commercial basis, without subsidies, while capturing some 97% of its carbon emissions.

In the near-term, India should work to consider developing a long-term strategic vision for CCS with clear milestones that enhances the credibility of deployment. The focus in the coming years should be on the enabling steps that will be required to deploy CCS at scale, particularly storage mapping. A clear CCS strategy would also promote opportunities for international partnerships, such as international financial institutions funding characterisation of potential storage sites.

Q:If it does happen, what does this mean for CCS on the whole?

A: Without doubt, Minister Goyal’s announcement is a welcome development for a sector that has seen several setbacks in recent years. It is very early stages and details of Minister Goyal’s vision have not been released as yet. Those with an interest in CCS, however, will hope that the Indian Government’s position translates across to international climate and energy discussions, perhaps with a special focus in the upcoming climate talks in Bonn.

Q: How does this fit in with India’s continuous use of coal?

A: Clearly, the announcement signals the Indian Government recognises that coal will have a long-term role in the national energy mix for decades to come. Indeed, this is supported by a recent high-profile government report published . Deploying CCS means that coal generation will continue with near zero emissions.

To be clear though, CCS should be recognised as a broad suite of technologies with applications beyond coal. A developed CCS sector can be applied to all fossil fuels generation and industrial sectors delivering emissions reductions consistent with Paris Agreement goals

Q: Final thoughts?

A: CCS is one of the most significant priority areas that require attention to ensure global average temperature rise is limited to 2 degrees. India’s ambition to deploy CCS to meet this scenario should be welcomed. As with other aspects of climate action, the international community has a vital role to play in supporting emerging economies, such as India, meet their climate action ambitions. Globally, renewable technology benefit from around $100 billion in subsidies every year, if equivalent levels of support were provided to CCS it is safe to assume that deployment levels would be significantly higher. CCS requires policy parity with other low-carbon energy technologies. This is particularly true in international forums. To date, international financial initiatives, such as the Clean Technology Fund, have characterised CCS as being in the pre-commercial phase – thereby denying funding in favour of renewable and efficiency proposals. This has happened despite CCS operating at scale in 17 projects and being identified as an eligible low-emission technology in the Clean Development Mechanism.  Specific CCS funding provisions are required in order to stimulate pilot or demonstration projects in economies, such as India, bring global emission reduction benefits.

As a major coal using economy and critical stakeholder in international energy and climate forums, the World Coal Association has an existing relationship with India and we look forward to embedding CCS support as part of our work programme.