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Carbon Capture and Storage – A Roadmap for Scotland

Section 5 - Risks and Uncertainties

CCS is of course a new and emerging industry where there remains a great deal of uncertainty about many factors.  This roadmap has already highlighted some of those.  And while uncertainties about emerging technologies are not confined to CCS, it is important to understand and assess each of these major risks so that strategies to address them can be delivered.

The table below highlights some of these key uncertainties and some of the key points that need to be considered to mitigate these risks.

Uncertainty

Details

Suggested response

Costs

Fear of scale of investment may deter positive investment decisions – also a fear of impact upon consumer bills.  Lack of clear business model in the short-term.

The Scottish CCTS Joint Study has shown that the financial costs for a CCS project are considerable. However, carbon dioxide abatement costs for electricity generation using CCS are comparable to that for wind and less than for wave power generation.  In a similar way to the renewable energy industry financial support into the future is also crucial for CCS to commence in Scotland. Cost reduction for CCS should occur over time given refinements to process; learning and economies of CCS should therefore become clearer over time.

Carbon Price

In the long term a rising carbon price is required to prompt investment in CCS and other low carbon activity. Current level of carbon price low

In the short to medium term some sort of price support will be needed – this is the rationale behind the current proposals for a generator levy.  Future support models may need to be refined over time.  EU ETS should lead to a rise in carbon price thus increasing future investment.

Business Model

The current business model for the full chain of CCS development is still uncertain - will different industries with different approaches (e.g. utilities

Incentives will be developed including carbon price to develop business models – the Scottish CCS Joint Study report highlighted some potential business models

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