According to this conception applicants’ CCR assessments should be with a “no barriers” approach. Applicants are asked to demonstrate that there are no known technical or economic barriers which would prevent the installation and operation of their chosen CCS technologies.
Applicants for a consent are expected to follow best practice as far as this knowledge is available and provide a reasoned justification of their choices.
UK Government made some interesting assumptions as regards the assessment process. In this place – according to the title of this publication - we concentrate on economic feasibility.
According to the said guidance British developers of new power plants face quite a challenge – they will be generally required envisage reasonable scenarios under which CCS is economically feasible.
Important parts of these scenarios will be some assumptions:
1) the technology option chosen as most suitable in the technical part of the assessment should be also applied as the basis for the economical part (but this determination is not binding on the applicant, which can change his mind as regards this issue in the future), also other assumptions adopted in technical part should consequently be applied in the economical one;
2) time – span that should be taken into account for assessments is the entire power station’s lifetime;
3) the vital determinant of the projections will obviously be the anticipated cost of avoided CO2 allowances (see recital 47 of the CCS Directive);
4) British guidance requires to identify transport routes within specified corridors – which costs should (in addition to the costs for carbon capture retrofitting and cost for carbon storage) be accounted for (market in shared transport facilities – if they will develop in time – may be a scenario for comparison);
All assessments should be interpreted in the view of underlying aim of the UK Government’s CCR policy, which is identifying, and not granting development consent to, those plants where it is “unlikely that there will ever be a reasonable business case for CCS”.
What seems to be most important, power plants developers will be required to determine the range of carbon prices, for which CCS is economically feasible and to justify the view that such a carbon price would occur within the lifetime of the proposed power station.
This is probably the most challenging part of the job. It is obvious that such a predictions are burdened today with an immense degree of uncertainty. And even if in an individual country, like UK, forecasts in this field are maybe easier (thanks to the efforts and guidance of the UK Government) than in others, it doesn’t end the issue. Wholesale electricity market is, and will be in the coming years, increasingly pan-European – taking into account at least the latest initiatives of infrastructure corridors “of European interest” (see: MEMO/10/582 and IP/10/1512 of 17 November 2010). It follows, that if in a given territory the electricity will be more expensive, than in others, cross-border transfers should be much easier, than currently. Such corridors could in the coming years significantly change the European wholesale electricity market, the prices, and – consequently – all previous predictions, estimates and assessments.