Japanese engineering giant Mitsubishi today pledged to move its carbon capture and storage operations to London after winning a major project to clean up emissions at the Drax power station in Yorkshire.
The plan means Mitsubishi will move “a handful” of staff here but with a view to hiring more. It will possibly make its Japanese developed carbon capturing solvent product in the UK as well.
Successful implementation of CCS at major carbon emitting industries has proven elusive over the years but Drax says its tie-up with Mitsubishi would be one of the biggest projects in the world.
Since the power station has moved from coal to burning pellets made from waste wood, Drax argues that, when combined with technology that takes the carbon out of the smoke it produces, the power station becomes one with “negative emissions”.
If the project comes to fruition, carbon from Drax will be taken through a pipeline to be buried under the North Sea.
If all goes to plan, the carbon capture project could be deployed by 2027, “permanently removing millions of tonnes of carbon dioxide from the atmosphere each year,” Drax chief executive Will Gardiner said.
The government has set up a competition to fund four CCS hubs or “clusters” across the UK with £1 billion for the winners.
Drax has teamed up with other companies in the Humber region to form a project to collect carbon from local polluting companies and pipe it to underground storage.
Gardiner told the Evening Standard the Mitsubishi tie-up put the project - called Zerocarbon Humber - in pole position to win one of the CCS grants.
“This makes a massive difference to our offer. The government will be choosing based on which project is credible and this puts us way out in the lead now.”
The Humber project is led by energy group Equinor.
Other clusters in the competition include the Teesside East Coast Cluster which plans to work similarly, taking locally produced and captured carbon to store under the North Sea. If it goes ahead, it will use the same network of offshore storage as Zerocarbon Humber.
If the Humber project wins the government support, Drax will commit £50 million to fund the next phase of preparatory work.
It will then spend £2 billion to complete the project, but only if it receives enough government support to sell the idea to investors.
That would include guarantees that it would receive a decent price for Drax’s energy in the future, similarly to how the government has worked with developers of windfarm operators.
“The government has to pay me for carbon removal. This is a first of a kind project, therefore I need assurances from them,” he said.
He said he expected a contract for about 15 years would be sealed by the end of 2023.
Drax is yet to figure out how to fund the £2 billion investment - by raising debt or equity. “Do my shareholders see this as a very interesting idea? Yes,” he said. “This is by far the best proven and most cost effective way of removing carbon from the atmosphere and they get it.”
He said it would not necessarily take specialist investors to back it, saying he had been getting positive noises from “Schroders, Blackrock - traditional UK long-only funds.”
How the carbon capture works
Exhaust gas from the burning of Drax’s wood pellets is cooled in a cooling tower then fed into an “absorption tower” where it is exposed to Mitsubishi’s alkaline solvent which absorbs the CO2. The CO2 is then compressed and dehydrated before being piped away for storage in a geological gap underground such as a used-up oil or gasfield. Known as Mitsubishi’s KM CDR process, it has been demonstrated in coal fired plants in Alabama and Nagasaki.
How the Humber cluster project works
Starting at the Drax power station, a pipeline network built by National Grid would take carbon from Drax, SSE Thermal’s gas fired power station at nearby Keadby and British Steel’s Scunthorpe plant to Centrica Storage’s site in Easington, where it will be compressed.
It will then be piped under the Southern North Sea using offshore infrastructure shared with the Teesside industrial cluster.
What Greenpeace thinks
Greenpeace’s chief scientist Dr Doug Parr says he believes many people within Drax sincerely believe they are doing good with their biomass and carbon capture model.
However, he is concerned about how much damage is done to biodiversity of woodland and carbon emissions by the very fact of chopping down trees to create the pellets it burns.
Drax says it only uses the waste from sawmills from trees that would have been chopped down anyway for building materials and other uses. However, Parr is concerned that the fact sawmills can now make additional money from their sawdust, twigs and other byproducts will change the economics of timber to make it cheaper, encouraging more use and more carbon emissions.
He is also concerned that, as biomass becomes an ever bigger power source, forest managers will cut corners for profit.
“It is mired in complexity. However carefully the woodland is managed, the processes of drying, pelleting, transport are not carbon neutral even when you capture the CO2 and bury it.”
Meanwhile, he adds, in order to really make an impact on climate change, the scale of biomass use would have to be vast.
“Drax are taking this stuff seriously but that is a long way from delivering an outcome where environmentalists can say: ‘yes, we are happy with that.’”
He was concerned the government had so enthusiastically backed biomass and was likely to commit billions of pounds of taxpayers’ or household billpayers’ money to an energy source that may not prove to be sustainable.
Environmental groups in the south east of the US, where Drax gets much of its wood, have protested about the felling of valuable, biodiverse woodland.
Drax denies allegations of unsustainable wood harvesting and says the carbon emitted in the burning of its pellets is offset by the fact that the sustainable forests from which it sources them absorb carbon dioxide from the atmosphere.
Debate rages over whether newly planted trees absorb as much carbon as those they replace.