The UK has the potential to “far exceed” its targets for carbon capture and storage, however, delays, cancellations and under-delivery represent a significant danger.
Following the UK’s first Carbon Storage Licensing Round, Westwood Global Energy Group published analysis, highlighting the possibility for seven carbon storage sites with a capacity for over 45mn tonnes per annum (MTPA) as soon as 2030. This works out at double the lower end of the UK’s targets. The country is also on course to succeed its 2035 ambitions and could more than double its 50MTPA target.
Yet, even minor delays on the existing project pipeline could have a big impact. Westwood modelled a scenario through which Track-1 clusters are able to maintain phase 1 progress, but then find subsequent phases facing a two-year delay, with all other announced projects also being delayed by two years. This would see the 2030 target missed and shows the importance of timely project completion.
Potential risks lie in a host of different areas, including funding timelines, with few projects expected to take final investment decisions until funding has been awarded; the financial support mechanisms available for projects outside of the Track-1 and Track-2 clusters currently being unknown, meaning without clarity projects are unlikely to carry on investing; and storage site appraisals deeming a site unsuitable, meaning a project then does not progress to a Storage Permit application.
It further cited potential problems around work programme delays, noting how across the 21 licenses awarded through the government’s Carbon Storage Licensing Round, there are four firm wells and nine contingent wells, as well as four firm and five contingent 3D seismic data acquisition commitments. This will increase demand for rigs and seismic roles, with increased competition likely meaning delays are inevitable for some. It also drew on how access to CO2, co-location challenges and infrastructure re-use all also come with threats.
Catherine Horseman-Wilson, Senior Analyst – NW Europe, explained: “The UK has a significant opportunity, with a strong capability to surpass its targets, but contingency planning will be a crucial element in securing its full potential, particularly in ensuring the strict adherence to schedules and maintaining a reliable CO2 supply.”
