The Post-2020 Cost- Competitiveness of CCS
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Transcript of The Post-2020 Cost- Competitiveness of CCS
The Post-2020Cost-Competitiveness of CCS
Eric Drosin
Director of Communications
Why is this Work Ground-Breaking?
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Publicly available cost data on CCS
…remains scarce
Reliable base for ZEP estimationsnew, in-house data provided exclusively by 15 ZEP member organisations
Over 100 contributors and 2 years of work…
Complete CCS value chains; individual reports analyse costs
CO2 Capture
CO2 Transport
CO2 Storage
Focus on new-build coal- and gas-fired power plantslocated at a generic site in Northern Europe from the early 2020s
The study features a BASE and an OPTIMISED case
Reference point for costs of CCS, based on a “snapshot” in time (investment costs referenced to Q2 2009)
Key Conclusions
CCS can technically be applied to both coal- and gas-fired power plants
Relative economics mainly depend on power plant cost levels, and fuel prices
In the 2020s all CCS equipped power plants will operate in base-load since the variable generation cost of a CCS equipped plant will be considerably lower than the variable cost for a corresponding conventional plant.
It is too early to distinguish a technology winner, due to uncertainties that are still large and differences small
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CCS is applicable to both coal- and gas-fired power plants
Key Conclusions
EU CCS demonstration programme will validate and prove the costs of CCS technologies and form the basis for future cost reductions (introduction of 2nd- and 3rd-gen. technologies)
Results of the reports indicate post-demonstration CCS will be cost-competitive with any other low-carbon energy technology (on-/offshore wind, solar power & nuclear), but also will form a reliable low-carbon power source
CCS is on track to become one of the key technologies for combating climate change
ZEP will undertake a complementary study on the costs of CCS in the context of other low-carbon energy technologies
CCS will be cost-competitive with other low-carbon power technologies
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Levelized Cost of Electricity (LCOE) for Integrated CCS projects (coal and gas)
The Levelised Cost of Electricity (LCOE) of integrated CCS projects (blue bars) compared to the reference plants without CCS (green bars)
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CO2 Avoidance Costs – Price of EUAs to Justify Building CCS Projects vs. Plant w/o CCS
CO2 avoidance costs for possible plants commissioned in the mid 2020s – the price of EUAs required to justify building CCS projects vs.a plant without CCS from a purely economic point of view (calculated on the same basis as previous graph)
LCOE for Hard Coal Plants w/CO2 Capture (capture costs only)
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The LCOE for hard coal-fired power plants with CO2 capture (using Middle fuel costs)
LCOE for Natural Gas Plants w/CO2 Capture (capture costs only)
LCOE and CO2 avoidance costs for natural gas-fired power plants with CO2 capture are heavily dependent on the fuel cost. The vertical blue lines for €4.5, €8 and €11/GJ represent the Low, Middle and High cases used for gas fuel cost.
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Key Conclusions
Currently no clear difference between capture technologies & all could be competitive once successfully demonstrated (using agreed assumptions & LCOE as main quantitative value)
Fuel/investment costs are main factors influencing total costs
Reports include the three main capture technologies (post-combustion, pre-combustion and oxy-fuel)…
…but exclude second-generation technologies (e.g. chemical looping, advanced gas turbine cycles)
The LCOE and CO2 avoidance costs calculated are higher than those of previous European capture cost studies, but tend to be slightly lower than majority of recent international studies
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All three CO2 capture technologies could be competitive once successfully demonstrated
CO2 Transport Cost Estimates for Demo Projects
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CO2 Transport Cost Estimates for Large-Scale Networks
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CO2 Transport – Onshore vs. Offshore Pipelines
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Short distance (180 km) pipeline;
small volume transported (2.5 MT CO2 per year)
onshore offshore
5.4 €/tonne CO2
9.3 €/tonne CO2
Short distance (180 km) pipeline;
large volume transported (20 MT CO2 per year)
onshore offshore
1.5 €/tonne CO2
3.4 €/tonne CO2
€ €
Total Cost Euro Per Tonne
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2.5 10 200
5
10
15
onshore pipelineoffshore pipelineship
Mtpa
€/t
Point-to-Point 180 km
2.5 10 200
5
10
15
20
25
onshore pipelineoffshore pipelineship
Mtpa
€/t
Point-to-Point 500 km
Key Conclusions
Clustering plants to a transport network can achieve significant economies of scale – in both CO2 transport/storage in larger reservoirs (on- and offshore)
Large-scale CCS requires the development of a transport infrastructure equivalent to the current hydrocarbon infrastructure
Greatly reduced long-term costs can be ensured with early strategic planning – including the development of clusters and over-sized pipelines – and the removal of cross-border restrictions
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Early strategic planning of large-scale CO2 transport infrastructure is vital to reduce costs
CO2 Storage Cost Ranges
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Storage cost per case, with uncertainty ranges; purple dots correspond to base assumptions
40 Mt5 fields to 1 emitter
66 Mt3 fields to 1 emitter
200 Mt1 fields to 1 emitter
Storage Capacity Estimates
43 255 323980 1313
813 788
2700
24400
123 183600 665
1350 1188 1050
3150
520029200
<1 1-5 5-10 10-25 25-50 50-75 75-100 100-200 >200
11 159765
2380 2100 2000
1050
3750
24400
303 345 4951383 1050 1000
7001350 1600
8000
Offshore Onshore
SA
DOGF
Key Conclusions
1 €/tonne CO2 - 20 €/tonne CO2 = CO2 storage cost range
Location and type of storage site, reservoir capacity and quality are the main determinants for the costs of CO2 storage
Onshore is cheaper than offshore
Depleted oil and gas fields are cheaper than deep saline aquifers
Larger reservoirs are cheaper than smaller ones
High injectivity is cheaper than poor injectivity
Risk-reward mechanism required for large variation in storage costs (up to a factor 10) & risk of investing in saline aquifer exploration
Such a mechanism will aid realisation of saline aquifer potential and ensure sufficient storage capacity
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A risk-reward mechanism is needed to realise the significant aquifer potential for CO2 storage
General Conclusions from the Study
Price of Emission Unit Allowances (EUAs) will not, initially, be a sufficient driver for investment after the first generation of CCS demonstration projects is built (2015 - 2020)
Enabling policies required in the intermediate period – after the technology is commercially proven, but before the EUA price has increased sufficiently to allow full commercial operation
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CCS requires a secure environment for long-term investment
The goal: to make new build power generation with CCS more attractive to investors than without it
+ €=
What’s Next?
ZEP acknowledges costs of CCS will be inherently uncertain until further projects come on stream
Cost reports don’t provide a forecast of cost development but…
…will be updated every two years in line with technological developments and the progress of the EU CCS demo programme
Future updates will also refer to co-firing with biomass, combined heat and power plants, and the role of industrial applications
ZEP aims to undertake further work on costs to put the cost of CCS in perspective with other low carbon energy technology options
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http://www.zeroemissionsplatform.eu/library.html