First UK carbon storage licencing round opens for bids
The North Sea Transition Authority (NSTA) has launched the UK’s first-ever carbon storage licencing round, with 13 areas available for bids.
The areas being offered for licensing are off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire in the Southern North Sea, Central North Sea, Northern North Sea, and East Irish Sea and are made up of a mixture of saline aquifers and depleted oil and gas field storage opportunities.
According to NSTA, the offered areas have a combination of attributes such as the right geological conditions, proximity to existing infrastructure which could be re-purposed, and links to industrial clusters which are targeting carbon storage to help meet their decarbonisation goals.
In choosing suitable areas, the UK regulator said it had considered issues including co-location with offshore wind – whether there are any familiar challenges and mitigations around existing or future offshore wind developments – environmental issues, potential overlaps with existing or future petroleum licences, and other activities to ensure key technologies can all be taken forward.
The application window is open for 90 days, closing on 13 September, and will be evaluated on technical and financial criteria.
It is expected that any new licences will be awarded in early 2023. The size and scale of the licensed stores mean that they are likely to proceed at different paces, but first injection of CO2 could come as early as four to six years after the award.
So far, the level of interest suggests there will be strong competition meaning that prospective licensees will need to produce high-quality bids to win licences, NSTA added.
“This is an important day on the path to net-zero emissions. 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,” said Andy Samuel, NSTA chief executive.
“Carbon storage is going to be needed across the world. There is growing investor appetite and we are keen to accelerate development of the carbon storage sector so that UK is well-positioned to be a global leader. The NSTA is ready to work with industry, government, regulators and others to deliver these exciting projects at pace.”
The new carbon storage areas, alongside the six previously issued, could have the ability to make a significant contribution towards the aim of storing 20-30 million tonnes of CO2 by 2030, NSTA said.
This round is said to be the first of many as it is estimated that as many as 100 CO2 stores could be required in order to meet the net-zero by 2050 target.
The Government’s Ten-Point Plan, published in November 2020, supported the establishment of carbon capture, usage and storage in four clusters – in areas such as the North East, the Humber, North West, Scotland and Wales – encouraging private sector investment.
NSTA, The Crown Estate and Crown Estate Scotland recently issued a joint statement explaining how they intend to work together and the NSTA has separately signed a Memorandum of Understanding (MoU) with Ofgem, which will act as the economic regulator for the transportation and storage of carbon dioxide.
Besides being awarded a licence from the NSTA, successful applicants will also need to obtain a lease from The Crown Estate or Crown Estate Scotland, depending on location, before they can progress a project.
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