In 2019, a partnership between BP and the German energy provider ENBW agreed to pay £231 million ($290 million) in annual option fees only.
While the offshore wind industry is booming, the Crown Estate is already eyeing the next opportunity to cash in on its deep-sea empire: carbon storage. The seabed around the UK has room to store 78 billion tons of carbon dioxide: more than enough space to accumulate the equivalent of 200 years of the country’s annual emissions. Increasingly, the North Sea is being seen as a destination for storing carbon captured from hard-to-decarbonise industries, including steel, cement and fertilizer production.
“As the science on climate change has progressed, we have realized that simply decarbonizing the energy sector in itself is not enough. We also need to cut emissions and decarbonise other industries, other sources of emissions,” says Jonathan Pearce, leader of the British Geological Survey’s carbon dioxide storage team.
Although it remains the heart of the UK’s fossil fuel industry, the North Sea may eventually play a significant role in the country’s decarbonisation plans. In 2019, the Committee on Climate Change, a public body that advises the government, concluded that carbon capture and storage is a “necessity, not an option” if the UK is to achieve its target. legally binding goal of achieving net zero greenhouse gas emissions by 2050.
But the carbon storage schemes have gotten off to a rocky start, says Esin Serin, a policy analyst at the Grantham Research Institute of Climate Change and the Environment at the London School of Economics. In 2011 and 2015 the government canceled major carbon capture and storage projects, drawing criticism from those who say the UK has been slow to capitalize on its natural storage assets. That is starting to change. The government’s promise to reach net-zero carbon emissions “was a turning point for carbon capture, use and storage,” Serin says.
The UK has set itself a target of capturing up to 30 million tonnes of carbon dioxide each year by 2030, with the first carbon capture groups focused on industrial towns and cities in the North East and North West of England. “There is now a real global competition over who is going to reap the industrial and economic benefits of the global effort to try to get to net zero emissions,” says Serin.
All of that means the Crown Estate now sits on another valuable asset in the deep sea. The estate is responsible for granting rights to carbon storage below the seabed around England, Wales and Northern Ireland, as well as pipeline leases that would transfer carbon dioxide to these underground reservoirs, most of which are located in the North Sea. The storage licenses are approved by the North Sea Transition Authority (NSTA), a public body that regulates the oil, gas and carbon storage industries in the North Sea.
So far, the NTSA has issued seven licenses for carbon storage on the seabed in England. One of those licences, awarded in 2013 to Shell, expired, so there are now six activated carbon storage licences, covering five sites in the North Sea and one in the Irish Sea west of England. In September 2022, the NSTA closed bidding for the first public round of carbon storage licenses after receiving bids from 19 companies for the 13 carbon storage sites offered. But any company that wants to transport and store carbon under the sea will also need to buy the rights to the Crown Estate. So far only one project is maintained a lease from the Crown Estate: a part of the North Sea that is being explored by a partnership between BP, Carbon Sentinel and Equinor New Energy for its carbon storage potential.
—————————————————-
Source link