UK Receives 26 Bids in First-Ever Carbon Storage Site Auction
The UK reports a strong response for its first-ever carbon storage licensing round which offers up 13 areas along the coast for the emerging industry. The North Sea Transition Authority (NSTA) reports it received 26 bids in the three-month process that closed last week and which is likely to be the first many auctions as they seek to develop the industry to provide carbon storage.
The NSTA reported it was launching the carbon storage licensing round in June in response to unprecedented levels of interest from companies eager to enter the market. The agency said the areas, which lay off the coasts of Aberdeen, Teesside, Liverpool, and Lincolnshire. The sites are in four cluster areas that they seek to develop for the industry and while specific amounts were not announced, the NSTA said it expects the new sites would contribute to the aim of storing up to 30 million tonnes of CO2 per year by 2030. They have estimated up to 100 CO2 stores could be needed for the UK to meet the net zero by 2050
In identifying the sites, they said they were looking for a combination of attributes such as the right geological conditions, proximity to existing infrastructure which may be able to be re-purposed, and links to industrial clusters which are looking to carbon storage to help meet their decarbonization goals. In choosing suitable areas to make available for licensing, the NSTA considered issues including co-location with offshore wind, environmental issues, potential overlaps with existing or future petroleum licenses, and other activities to ensure that each of the technologies can progress.
“We were very pleased with the quantity and quality of applications we have received from a diverse range of applicants,” said Nick Richardson, NSTA Head of Exploration and New Ventures. “The clear appetite among companies to get involved shows that the UK is well-positioned to become a world leader in the sector. Carbon storage can play a big part in reducing greenhouse gas emissions into the atmosphere.”
There are currently six carbon storage licensees on the UK Continental Shelf which the NSTA believes could meet up to one-fifth of storage needs if they reach their maximum potential of up to 40 million tonnes per annum injection rates by the mid-2030s.
The agency said it would be reviewing the bids for the new sites that came from a total of 19 companies. They expect to award the licenses in early 2023. The companies receiving the licenses will then need to obtain a lease from The Crown Estate or Crown Estate Scotland before they can progress a project. The NSTA expects that the first injection of CO2 could happen within four to six years. The captured CO2 would come from industrial processes and then be transported, via ship or pipeline, for storage in rocks deep beneath the seabed.