This is a valuable article by Matthew Ulterino, an independent consultant from London and a colleague of EiD. This is an excerpt from his article in Energy and Environment, Volume 23 No. 2&3, 2012. This is a debate that is going to continue for some time.
Carbon Capture and Storage: Sitting on the Wrong Side of Innovation
Proponents of carbon capture and storage (CCS) tout the innovation and economic benefits that its deployment and diffusion would offer. In the U.K., the government is prepared to spend £1 billion toward a CCS demonstration project – a seed-payment for an industry it projects will employ 100,000 people and generates £6.5 billion in economic value by 2030. They are not alone in their support. The Zero Emissions Platform (ZEP) states that over $26 billion in funding has been proposed by governments globally for large-scale projects. Yet for all these pledges, not a single utility-scale CCS plant is operating anywhere on the planet, though plenty have been cancelled or postponed. Very recently in the U.K., in fact.
There are many reasons why CCS has been slow to move from concept to application to maturity. In this, it bears resemblance to countless other technologies that struggle for early stage adoption. But as government has chosen to be highly vested in its outcome, it must be considered whether CCS bears the markings of an innovative technology that justifies the push from the public sector. Yet CCS’ lack of progress and still distant timeframes to maturity stand in stark contrast to cost, efficiency and penetration figures from renewables. Looking at historical precedence in other sectors makes CCS’ promise even harder to fathom.
A 1990 book by Arnulf Grubler, The Rise and Fall of Infrastructures: Dynamics of Evolution and Technological Change in Transport, shows there’s a tipping point where incumbent systems reach saturation and new systems capture irreversible market share – 90% / 10% is cited – that portends that the fossil fuel energy regime could soon peak. The U.S. Department of Energy reports that in 2009, 3.8% of global electricity generation came from non-hydropower renewable energy; the figure exceeds 20% including hydro. Individual country figures show where the peak may have happened. As a percentage of domestic electricity supply, wind has exceeded 10% in Denmark since 1999, reaching 22% in 2010[1]. In Germany, 2010 production from wind and PV combined met 8.2% of all domestic generation[2]. Solar itself is forecast to provide 10% of supply in Germany by 2020[3]. As leader countries demonstrate the technological ability and institutional capacity to drive this change, Grubler’s historical review shows that other countries soon follow. This has been remarkably consistent across technologies and eras.
Either renewables or CCS initially cost more than the predecessor – system changes in transportation demonstrate low-cost is not the initial driver anyway. But only renewables offers convincing evidence for near-term price parity and long-term price decreases. Alternatively, the technical challenge to fit and retrofit fossil plants with CCS capability, construct the pipeline network for the captured CO2, and select and ensure the soundness of underground repositories suggest greater complexity than innovation. No doubt there’s much to be done to move the cost and reliability of renewables toward the historic norms of fossil-based centralised energy: improved grid dynamics, dispatchability, and storage to name a few. But governments would be far wiser targeting innovations in these sub-sectors than prolonging outmoded incumbents.
[1] Danish Energy Agency.
[2] German Ministry for the Environment and Reactor Safety.
[3] Bundesverband Solarwirtschaft e.V.
Energy in Demand - Sustainable Energy - Rod Janssen 
I actually work in CCS on a process called Chemical Looping Combustion and I can confirm that the slow progress has indeed been quite frustrating. However, this lack of commercial breakthrough is nothing but a natural consequence of the lack of incentive for industrial backing.
The fact is that CCS will always be more expensive than conventional coal and unless carbon legislation is implemented, industry will never have any financial incentive to drive the widespread adoption of CCS. The technology is actually there to deliver clean electricity which would be around 40% more expensive, but this technology will obviously not be commercially deployed before it makes financial sense to do so, especially within our current economic environment.
The fact remains, however, that CCS is a very important transition technology to a sustainable energy future. The world will be burning fossil fuels for many decades to come and this will end very badly if CCS is not implemented on a large scale. The problem is just that this will not happen before there is a real industrial incentive to drive the implementation (and the further innovation that will naturally follow from this experience).
Until that happens, researchers like myself will have to go to great trouble to get public funding to try and squeeze a little more optimization out of the system. This is a very inefficient way of doing things…