The North Sea Transition Authority (NSTA) has this week fired the starting gun for the UK’s first-ever licensing round in offshore carbon storage.
Thirteen zones off Britain’s coasts are earmarked, from Aberdeen to Lincolnshire, and from Liverpool to the eastern Irish Sea. Bidders will compete for rights to bury between 20 and 30 million tonnes of CO2 this decade in depleted gas reservoirs and saltwater aquifers.
Co-location with offshore wind farms, proximity to existing pipe networks open to re-purposing, and potential overlaps with existing or future petroleum licences, all played a part in ring-fencing the plots.
Arguably the prime concern has been links to industrial clusters, who intend burial of carbon as a means to help meet their goals for industrial clean-up.
Anticipating keen competition from bidders, the NSTA points to what it calls “unprecedented levels of interest” from eager entrants to the storage market. Strong competition means that prospective licensees will need to produce high-quality bids to win licences, it believes.
Formerly Oil and Gas UK, the semi-independent NSTA has a board dominated by the hydrocarbon industry.
Experts believe the six carbon storage licences already covering parts of the UK’s Continental Shelf could meet up to one-fifth of storage needs this decade, provided they reach their maximum potential of up to 40 million tonnes a year of CO2 is injected into them by the mid-2030s.
The capacity of reservoirs bid for in this round is uncertain. But they offer the potential to make a significant contribution to decarbonising the UK economy.
The window for bids closes on 13 September. The NSTA will then evaluate each on technical and financial criteria.
Early 2023 should see the award of new licences. Before they can progress a project, holders will also need to secure a lease from the Crown Estate or Crown Estate Scotland.
The first injection of CO2 could come by 2027.
The NSTA, the Crown Estate and Crown Estate Scotland have recently published a joint statement explaining how they intend to work together. The NSTA has also agreed a memorandum of understanding with Ofgem, which will act as the economic regulator for the transportation and storage of carbon dioxide.
The Government’s Ten-Point Plan published in November 2020 supported setting up four clusters for carbon capture, usage and storage, in areas such as the North East, the Humber, North West, Scotland and Wales. Attracting private investment is the goal.
NSTA chief executive Andy Samuel, pictured, said: ” In addition to the huge environmental benefits of significantly reducing carbon dioxide emissions into the atmosphere, the facilities will provide opportunities for many thousands of highly-skilled jobs”.
More details here.