THE VINE SEPTEMBER 24, 2008
With the recent financial upheaval and gloomy prognosis for the global economy, the price tag for alternative energy will surely get a harder look. Europe, for one, has just priced out the cost of investing in carbon capture and storage, estimating that it will take about $15 billion in public funds and subsidies to jumpstart the yet-to-be-proven technology. The Guardian explains:
One of Gordon Brown's pet energy projects - to build up to a dozen pilot plants to capture and store carbon dioxide as power stations burn coal to generate electricity - would require EU subsidies of as much as 10bn [USD $14.8 million] over the next few years, it emerged yesterday. A study by the consultancy McKinsey into carbon capture and storage (CCS) showed that such plants could be economically viable by 2030 at the latest. But it would require substantial public subsidies to get 10-12 plants running by the EU target date of 2015. They cost twice or three times as much as conventional coal plants: about 2bn for the 300 megawatt plants planned by the industry, which is refusing to go ahead without public subsidies.
Europe has been the global leader in CCS research and development for decades, home to an offshore CCS platform in Norway and an ambitious pilot plant that just launched in Germany last week. The wide-ranging apprehensions about CCS still abound: as I've discussed in a previous Vine post, it's an enormously capital-intensive project that has yet to dispel concerns about potentially fatal safety hazards, and it remains unclear whether the emissions curbed will justify the tremendous expense. But should CCS be proven to be safe and far more cost-effective, it could potentially revolutionize the way the world generates baseload power, for which there aren't a huge number of alternatives (nuclear or hydroelectric, for example, neither of which are particularly green-friendly).
That being said, if anyone is going to take a chance on developing CCS, it should be done quickly, on a scale that will actually give us a broad-sweeping indication of whether pursuing this form of alternative energy will be worthwhile. As both the potential benefits and risks are so pronounced, it seems to make more sense to embark upon a large-scale cooperative effort than a patchwork of individually funded projects. Chris Davies, a Liberal Democrat MEP and the European parliament's rapporteur on CCS, argued that that EU needs "to put this financing mechanism in place very quickly, deliver it to developers, and do it at a European level. If we leave it to national capitals, I'm not confident the projects will go ahead, and time is already running out."
Europe will need to act decisively, one way or the other, if it wants to make this wager, otherwise it may just end up bleeding money on CCS over a protracted period of time without firm indications of whether further investment is worth the pain. The U.S., for its part, has made comparatively anemic investments in CCS, and it's the sort of energy project-high-risk, capital-intensive-that will have an even tougher time finding support in economically austere times. So, Europe-it looks like this one will be your call.