Compatibility of fossil fuel energy system for UK climate targets
Turk, Jeremy Kraft
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The United Kingdom (UK) has an ambitious greenhouse gas (GHG) reduction target with legally binding commitment of 80% reduction by 2050 relative to 1990 levels. The Committee on Climate Change (CCC) sets carbon budgets to meet this goal, and suggested that electricity generation should be below 50 g CO2e per kWh(e) by 2030. At the same time, the UK is renewing gas distribution pipeline systems to decrease leakages and increase efficiency of gas delivery, all while pursuing a domestic shale gas industry to meet continued demand as traditional gas production decreases. Competing in the same market, the United States (US) became a net exporter of natural gas at the end of 2017, largely due to increased production of shale gas, and holds contracts for distribution in the UK. It is clear that the UK is continuing reliance on natural gas in the near term, despite climate targets, and will need advanced mitigation strategies. One such strategy is using Enhanced Oil Recovery (EOR) with CO2 and coupling it with Carbon Capture and Storage (CCS). This strategy can create of a large commercial market for EOR offshore of the UK, and maintain a 50% chance of keeping temperature rise below +2°C throughout the 21st century. The market has the potential to accelerate CO2 storage investment, and aid in meeting UK climate targets. A coupled CCS-EOR scenario might contribute to decarbonisation of UK grid electricity. Using UK data, progressive introduction from 2020 of 11 CCS-to-EOR gas-power plant projects is estimated to store 52 Mt CO2 yr-1 from 2030. These 11 projects also produce extra revenue of 1,100 MM bbls of taxable EOR-oil from 2020 to 2049. The total average electricity grid factor in the UK reduces from 490 to 90 – 142 kg CO2e MWh-1, with gas generating 132 TWh of clean electricity annually. This life cycle analysis (LCA) is unusual in linking oil production and combustion with CCS and gas fuelled electricity. With a full LCA, this aggressive CCS-EOR scenario provides a net carbon reduction, and progressively reduces net oil combustion emissions beyond 2040. A second strategy could be needed if the projected domestic gas supply gap for power generation (without CCS) were to be met by UK shale gas with low fugitive emissions (0.08%). In this case an additional 20.4 Mt CO2e would need to be accommodated during carbon budget periods 3 – 6. However, a modest fugitive emissions rate (1%) for UK shale gas would increase global emissions compared to importing an equal quantity of Qatari liquefied natural gas, and risk exceeding UK carbon budgets. Additionally, natural gas electricity generation would emit 420 – 466 Mt CO2e (460 central estimate) during the same time period within the traded EU emissions cap. In addition to electricity generation, shale gas supply chain emissions for heat are assessed. This thesis assesses the greenhouse gas emissions intensity of US and UK shale gas as determined by source, distribution and end use for heat. It assesses the merit order of shale gas imported to the UK from the US versus domestic production and use of shale gas in the US or UK, considering distribution network renewals and the total emissions intensity of shale gas used. The import and use of US-produced shale gas liquefied natural gas (LNG) in the UK would increase GHG emissions relative to domestic UK shale gas production and use by 178 Mt CO2e, yet only increasing UK carbon budgets 3-6 by 14.2 Mt CO2e (19.2%). It is found that losses in the distribution phase represent a highly uncertain, but potentially important component of shale gas GHG intensity. This thesis considers the implications for GHG emissions measurement and reporting, climate change mitigation via municipal pipeline renewal, and national carbon budgets to 2035. Most importantly, under the current production-based greenhouse gas accounting system, the UK is incentivized to import natural gas rather than produce it domestically throughout each of the cases studied. This thesis gives policy recommendations to mitigate the impact of perverse incentives in new GHG regulations.