Many proposed carbon capture and storage (CCS) demonstration and commercial projects have failed to be constructed.
Reviews of these projects have shown that, in most cases, the cost estimates for these projects have increased markedly from the initial cost estimates to the final proposed cost. This has resulted in cost uncertainty, misinformation and a general lack of trust surrounding the costs and economics with regard to CCS project costs.
A robust cost estimate of carbon capture and storage projects is essential for public, regulator and investor confidence in the technology, which is critical to the deployment of the technology.
The study provided framework and guidelines for project scoping and cost estimation for early mover CCS projects.
The work reported on the results from scrutinising previous “new technology” introductions in the energy and process industries. From this work it was evident that:
- Uncertainty and increase in cost estimates are typical in first-of-a-kind and early mover projects.
- Behavioural issues amongst stakeholders, in relation to early underestimates and final costs, range from honest delusion to deliberate deception.
- Notwithstanding ‘better’ application of best practice in preparing cost estimates, known costing pitfalls continue to be a feature of modern day complex energy projects.
- The level of study detail in publically available reports, with regards to cost estimates, is frequently not entirely transparent. This can lead to information being taken and used out of context or misunderstood.
The report recorded that carbon dioxide capture technologies are commercially available today, despite the assertion that carbon capture and storage is an ‘unproven’ technology that will never be deployed. In addition, the storage of carbon dioxide in geological formations is also very well established.