London — Porthos CO2 Transport and Storage confirmed Nov. 19 that it would be bidding for support in the Netherlands' SDE++ auction in the week beginning Nov. 22.
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Joint development partners in the carbon capture, transport and storage project in the Port of Rotterdam are Air Liquide, Air Products, ExxonMobil and Shell.
The Netherlands' SDE++ auction has a budget of Eur5 billion ($5.9 billion), with a bidding window open across four rounds between Nov. 24 and Dec. 17.
Funding from the mechanism was required "to bridge the gap between Emissions Trading Scheme, or ETS, costs and the total outlay for capturing, transporting and sequestering CO2," Porthos said.
The four partners were expected to sign definitive transport and storage contracts before the summer of 2021, Porthos said.
"The associated permit procedures will run until the end of 2021, early 2022 – after which the partners will take a definite investment decision," the project company said.
Construction of Porthos infrastructure is scheduled for 2022 and 2023, with the system entering operation at some point in 2024.
Captured carbon emissions from refineries and chemical works are to be piped 30 km on land up to the Maasvlakte, then a further 20 km offshore to an empty gas fields (P18-2, P18-4 and P18-6) operated by TAQA.
The Netherlands' SDE++ auction mechanism is to award support on the basis of CO2 emissions saved, rather than megawatt hours produced (as was the case under previous SDE auctions).
The move away from a focus on renewable energy costs opens support up to CCS and hydrogen electrolysis projects, as well as to heat pumps and innovative technologies like extraction of heat from water.
On offer is a sliding premium whereby the government pays the difference between the cost price of a technology and the market price of carbon abatement, expressed in euros per metric tonne of CO2. It guarantees to do this for 12 or 15 years.
The government sets the cost price per technology. These range from negative amounts, which in this round include some categories of onshore wind felt to be intrinsically profitable, to a maximum of Eur301.37/mt CO2 in the case of hydrogen from electrolysis.
If a new CCS project applies for and gains more than Eur400 million in subsidies, the developer must sign an implementation agreement with the Dutch state within two weeks of the subsidy decision, according to auction guidance.