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7th study meeting Tokyo - Holger Bietz

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On 16 May 2013, the Global CCS Institute hosted its seventh study meeting in Tokyo. This presentation is by Holger Bietz, the Institute's General Manager, Projects, Financial and Commercial.

On 16 May 2013, the Global CCS Institute hosted its seventh study meeting in Tokyo. This presentation is by Holger Bietz, the Institute's General Manager, Projects, Financial and Commercial.

Published in: Technology, Business

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  • 1. THE GLOBAL STATUS OF CCSHOLGER BIETZ – General Manager – Projects, Financial and Commercial7th Study Meeting – Tokyo16 May 2013
  • 2. THE GLOBAL STATUS OF CCS: 2012 Released October 2012. Update released January 2013. Comprehensive coverage on thestate of CCS projects andtechnologies. Challenges and recommendationsfor moving forward.2
  • 3. KEYMESSAGE CCS IS ALREADY CONTRIBUTING,BUT PROGRESS MUST BE ACCELERATED39 operating projects: 6 natural gas processing plants 1 fertiliser plant 1 synthetic natural gas plant 1 hydrogen plant8 projects under construction (Execute): 2 electricity generation plants 2 natural gas processing plants 1 hydrogen plants 1 fertiliser plant 1 ethanol plant 1 oil refining
  • 4. KEYMESSAGEVolume of CO2 potentially stored by large-scale integrated projectsCCS IS ALREADY CONTRIBUTING,BUT PROGRESS MUST BE ACCELERATED4
  • 5. KEYMESSAGE CCS IS ALREADY CONTRIBUTING,BUT PROGRESS MUST BE ACCELERATED5Volume of CO2 potentially stored by large-scale integrated projects
  • 6. KEYMESSAGE STEADY PROGRESS BUTIMPORTANT DEVELOPMENTSLarge-scale integrated projects by asset lifecycle and year6
  • 7. KEYMESSAGEVolume of CO2 potentially stored by primary storage type and region7January 2013 UpdateSTEADY PROGRESS BUTIMPORTANT DEVELOPMENTS
  • 8. KEYMESSAGE8Quest, CanadaTCM, NorwayPlant Barry, USBoundary Dam,CanadaSTEADY PROGRESS BUTIMPORTANT DEVELOPMENTS
  • 9. KEYMESSAGE ACCELERATION OF CCS DEPENDS ONCOLLABORATION AND KNOWLEDGE SHARING CCS faces difficult and time-consumingchallenges. Sharing knowledge gained is critical toaccelerating the deployment of CCS. Collaboration and effort is required to increasethe intensity and scope of knowledge sharingactivities.9
  • 10. PROJECT KNOWLEDGE-SHARING AGREEMENTSINSTITUTE FUNDING STATUSActiveCommencing/under discussionCompleted2. Trailblazer(Tenaska)FEED studies3. Nelson 6(Tenaska/Entergy)Development studies1. RCI(Rotterdam CCS Network)Storage and shipping studies 6. Getica(ISPE)Feasibility Study10. Callide Oxyfuel(OTPL)Transport and CO2 injectionstudies4. Pioneer(TransAlta)FEED studies11. CarbonNet(Victorian Government)Commercial and Planning studies5. Mountaineer(American Electric Power)FEED studies7. ROAD(Maasvlakte CCS)FEED studies &execution planning8 Chiyoda(Chiyoda/Tokyo University)Shuttle shipping study9. South West Hub(Western Australian Government)General reports13. CSIROAmine emissionstudies14. CarbonNet MMV(Victorian Government)MMV scope study15. Loy Yang(Worley Parsons, MHI)Process validation model16. Yanchang CCUS(Shaanxi Yanchang Petroleum)Capture, storage and permit reports10
  • 11. PROJECT KNOWLEDGE-SHARING AGREEMENTSFeasibility/FEED Case Studies StatusProjectCaptureTransport/InfrastructureStorageandMMVFinanceandCommercialPolicy,LegalandRegulationPublicEngagementRiskandEnvironment1Rotterdam CCS NetworkProjectComplete2 Trailblazer Energy Center Complete3 Nelson 6 CCS ProjectComplete4 TransAlta Pioneer In progress5 AEP MountaineerComplete6 Romanian CCS Demo PlantComplete7 ROAD Project In progress8 Chiyoda Project Complete9 South West Hub Project In progress10 Callide Oxy-fuel Project In progress11 CarbonNet Project In progress13 CSIRO Complete14 CarbonNet Project - MMV Complete15 Loy Yang Complete16 Yanchang CCUS Project Commencing
  • 12. PROJECT KNOWLEDGE SHARING– AEP mountaineer project (1)KEY ASPECTS OF AEP’S MOUNTAINEER PROJECT The project aimed to design, construct, and operate Alstom’s chilled ammoniaprocess to capture approximately 90% of the CO2 from a 235 MWe slipstreamfrom the existing 1300 MWe Mountaineer power plant. Around 1.5 million tonnes per annum of CO2 were to be treated, compressed andinjected into suitable deep saline formations for permanent storage approximately2.5 kilometres underground.REPORTS AND OUTCOMESThe knowledge sharing reports delivered to the Institute covered a wide range oftopics including: technical studies, business case, engineering and designconsiderations, integration and storage.In July 2011, AEP announced the project would be put on-hold beyond the front-endengineering design (FEED) phase, due to the current uncertain status of nationalclimate policy and weak economy.12
  • 13. PROJECT KNOWLEDGE SHARING– AEP mountaineer project (2)CCS Front End Engineering and Design ReportThe front-end engineering and design package included: a +/- 25% cost estimate (see table below) all information needed Environmental Policy ACT a construction contracting strategy preliminary PFDs and mass and energy balances a deep well drilling program for characterization of subsurface geology at one ofthe CO2 storage sitesSystem (Phases I, II & III) Estimate ($ x million) USDCapture System $665Storage System $160Sub-Total $825Escalation $71Sub-Total $896Risk Based Contingency $103Total Constructed $999Phase IV Operations $66Total Project Cost $1,065AEP has put the project on hold as a lack offederal climate change legislation adverselyimpacting AEP’s ability to fund it’s cost shareof the commercial scale project.
  • 14. PROJECT KNOWLEDGE SHARING– ROAD project (Netherlands) (1)14PROJECT DETAILSLocation: Rotterdam, NetherlandsStatus: DefineProponent: Maasvlakte CCS Project C.V., a joint venture of E.ON Beneluxand Electrabel (a subsidiary of GDF Suez Group)Technical aspects Construction of a new E.ON Maasvlakte Power Plant 3 (MPP3), a 1070 MW (gross) coal-and biomass-based power plant. Retrofit of post-combustion capture is being designed on a 250 Mwe unit of the plant,capturing approx 1.1 million tonnes of CO2 per annum. The captured CO2 will be transported through a 26 km pipeline to the P-18-A Platform ofTAQA in the North Sea and injected into depleted gas reservoirs at a depth of 3500 metresunder the sea bed. The project has obtained all necessary permits and concluded all its costing and technicaldesign work – FID is expected later this year.
  • 15. PROJECT KNOWLEDGE SHARING– ROAD project (Netherlands) (2)15PERMITTING PROCESS REPORT A large number of permits required for all aspects of the CCS chain Obtaining a storage permit was most challenging issue for the project Key issues for the storage permit relate to the: Amount of information requested by the permitting authority Financial Security (funds needed for post-closure activities) Transfer of responsibility and liability
  • 16. PROJECT KNOWLEDGE SHARING– Project Pioneer (Canada) (1)16TransAlta announced the cancellation of this project on the 26th of April 2012, on the groundsthat "the revenue from carbon sales and the price of emissions reductions [were] insufficient toallow the project to proceed at this time".KEY ASPECTS OF PROJECT PIONEER The project was built as a retrofit of TransAlta and Capital Power Corporations Keephills 3(K3) coal-based power plant Pioneer would have captured one million tonnes per annum of carbon dioxide (CO2)through post-combustion technology (MHI). The CO2 was to be transported for enhanced oil recovery (EOR) in nearby oil fields as wellas for permanent storage in deep saline formations.REPORTS AND OUTCOMESKnowledge sharing reports cover a wide range of topics including: regulatory, project risk,socio-economic, public opinion, construction execution, commercial structuring, CCSintegration, risk management, and MMV technology issues.
  • 17. PROJECT KNOWLEDGE SHARING– Project Pioneer (Canada) (2)17SYSTEMS INTEGRATION WORKSHOP – SUMMARY REPORTWhen integrating the capture facility into the host plant the following design features canimprove the efficiency and performance: Integration of utilities Integration of (environmental) monitoring and control systems Optimization of energy/heat recovery and use Waste minimization and use of waste products Optimizing materials and flows/exchanges within the plant Operating flexibility, i.e: Maximizing operational flexibility for the industrial process generating the CO2 (e.g. power plant24-7 load following, handling interruptions in availability of any component in the system, etc.) Optimizing trade-off between cost and operating flexibility Optimization of maintenance, preventative maintenance system and shutdowns
  • 18. PROJECT KNOWLEDGE SHARING– South West Hub (Australia)PROJECT DETAILSLocation: Western Australia, AustraliaStatus: EvaluateProponent:Department of Mines and Petroleum, but moving to an industry joint ventureTechnical aspects: CO2 captured from various industrial sources includingcoal-based urea plant, alumina production and powergeneration. A 50-100km onshore pipeline network is proposed toconnect large stationary sources of CO2. The base case project aims to store around 2.5 milliontonnes per annum of CO2 in onshore deep salineformations.Current focus: Negotiating land access for seismicstudies on land surrounding possible storage sites. 18
  • 19. PROJECT KNOWLEDGE SHARING– Project Carbonnet (Australia)PROJECT DETAILSLocation: Victoria, AustraliaStatus: EvaluateProponent: Department of Primary IndustriesTechnical aspects CarbonNet is a storage led hub project Storage opportunities exist in the offshore Gippsland basin, in depleting oil fields The nearby Latrobe Valley is home to power stations responsible for generating morethan 90 per cent of the state’s electricity Aiming to develop the hub concepts allowing multiple CO2 sources to connect to anetwork of injection sites The business model is unique as it is not driven by a single CO2 emitter Knowledge sharing activities: Commercial frameworks for hub projects (2013) Business model for CarbonNet project (2014)19
  • 20. PROJECT KNOWLEDGE SHARING –our approach in China (1)MoU with DCC-NDRCThe key areas of cooperation identified under the MOU:the promotion international and domestic cooperation; encouraging further research and development; supporting demonstration projects; and developing industrial and academic networks.20
  • 21. PROJECT KNOWLEDGE SHARING- our approach in China (2)MoU with Shaanxi Yanchang Petroleum (Group) Co., LtdThe key areas of cooperation identified under the MOU:the promotion of CCUS in China and globally, including; increase technical and non-technical understanding of the applicationof CCS in the non-power sector including capture, transport andstorage technologies, and regulations and permitting; Increase understanding of CO2 storage and utilisation and monitoring,measurement and verification within China’s unique geology; Enhance public awareness and acceptance of CCS technologydevelopment in China and globally; and Share and dissemination disseminate key learnings in order to helpadvance other projects around the world.21
  • 22. PROJECT KNOWLEDGE SHARING- our approach in China (3)MoU with Shaanxi Yanchang Petroleum (Group) Co., LtdWork towards a Knowledge Sharingagreement:Key reports to be provided under theagreement when finalised: CO2 capture in the coal to chemicalindustry; CO2 storage and EOR in low permeabilityreservoirs; Measurements monitoring and verificationon CO2 storage in the Jingbian, Wuqi andDingbian oilfields; and Regulation and permitting of CCUSprojects in China.22
  • 23. TARGETED REPORTS - THE FIRST TRANCHECommunity communication on key risks of CCS Projects.(Indigo Research Ltd, UK)Relative permeability guideline.(Benson Lab; Stanford U, California, USA)Making the business case for CCS projects:more insights. (2CO Energy, UK)CO2 networks and hubs: participants, roles &commercial structures. (National Grid, UK)CO2 transportation – shipping.(Chiyoda, Japan)Mitigating unexpected CO2 migration.(CO2GeoNet, Italy/France) - with IEAGHGBalancing key contracts for CCS projects.(Baker McKenzie, Australia)CCS public funding programs – Lessons Learnt.(Institute will create this report)Business case for CCS projects.(Summit Power Group, Texas Clean Energy; USA)CO2 networks and hubs: Shared transport andstorage infrastructure. (Deltalinqs, Netherlands)Cross-border transport of CO2.(Maersk Olie og Gas, Denmark)ULCOS – public engagement(ArcelorMittal, France)Overview of NW Sturgeon Refinery(North West Redwater, Canada)Baltic Sea CCS storage (Bastor) summaryreports (Elforsk AB, Sweden)Storage Atlas -(CCOP, Thailand)New Targeted Report Scopes are currently being contractedINSTITUTE FUNDING STATUSActiveCommencing/under discussionCompleted 23
  • 24. TARGETED REPORTS – CONTRACTED AND PLANNEDReport DescriptionAquistore Project Aquistore will serve as the storage site for the world’s first commercial post-combustion CO2 capture, transportation, utilization, and storageproject from a coal-fired electric generating facility. This report will capture key lessons from the project.Compostilla: Progressing onshore storage inEuropeReport will cover of aspects of injection into carbonate reservoirs, the geochemical impact on a carbonate reservoir (induced changes in porosityand permeability); and will comment on regulatory requirements and public engagement activities to highlight the European perspectiveCreating core message Translating the technical results of the Weyburn Project technical research findings into public communication resourcesThe CSIRO Key Social Research findings This report will provide a comprehensive overview of the breadth of recent CCS-focused social research; attempting to categorize, contextualizeand synthesize the key findings, recommendations and challenges evidenced throughout this substantial body of work.Funding CCS Demonstration Projects This report will consider structuring of a CCS project to access commercial bank, ECA, public financing institution and green bank funding andthe respective roles and requirements of bank, ECA, PFI and green bank support.Storage Liability 1 Effects of liability for CO2 leakage in an EOR-CO2 projectStorage Liability 2 Identifying the benefits to liability regimes (or development of insurance markets) through regulatory requirements that incorporate both project-level risk as well as system wide risks when setting payment rates for projectsFramework for geological assessment This work will develop a systematic process to more quantitatively measure and categorise the data available for assessment and maturity of thegeological assessments performed by countries in their storage capacity assessmentsIndonesian Coal Gasification Project: StorageScoping StudyIdentify if there are potential storage sites in Indonesia suitable for long term geologic storage of the intended volumes of CO2 within areasonable range of the coal gasification project.Project management structures for integratedCCS projectsConsidering the different skills required across the value chain and how this changes throughout the asset lifecycle model from Identify toExecute, Operate and ClosureWhat international standards on CCS mightmean for CCS projectsMomentum towards the development of international standards is growing rapidly, as the ISO Technical Committee is forming its working groupsand starting to develop their work programs. The aim of this study would be to examine the implications for standards development at this stageof CCS demonstration.A study considering the costs associated withthe emerging modes of regulationTo assist both project developers in developing their detailed project budgets and business cases, but also policymakers and legislators so thatthey can have a more accurate view of the costs and burden they are imposing on projects.Expansion of the current CDM-Ready project The development of legal and regulatory regime ratings and an assessment model for host countriesTechnology commercial pathways – learningfrom the LNG sectorA study of the rapid and successful development of the LNG industry to identify learnings that can be applied to accelerate the development ofthe CCS industryInnovation in the CCS Sector While there is good analysis of the state of development of CCS technologies, there is much less readily available analysis of what existingprojects are doing to drive innovation and lower the costs of CCS.24
  • 25. TARGETED REPORTS– Don Valley Power Project (UK) (1)25Project detailsLocation: South Yorkshire, United KingdomStatus: DefineProponent: 2Co Energy LimitedTechnical aspects 2Co Energy is proposing to build a new, integrated gasification combined cycle (IGCC)power plant - 920 MW (gross) - and capturing more than 91 per cent of its CO2 emissions. Approximately 4.9 million tonnes per annum of CO2 would be captured through pre-combustion capture technology. CO2 is proposed to be transported via a 90km onshore pipeline to the North Sea coast.From there the pipeline will continue approximately 300km offshore to its final storagedestination. Two offshore storage options are being studied: both EOR prospects ann deep salineformations in the southern North Sea. Front end engineering and design (FEED) studies have been completed and the project isnow looking to improve its business case.
  • 26. TARGETED REPORTS– Don Valley Power Project (UK) (2)26MAKING THE BUSINESS CASE FOR CCS REPORT Capital expenditure of approximately £5 billion A mix of potential funding sources required Grants 26% (UK competition / NER300) Equity 14% (2Co, Samsung, BOC) Debt 60% (ECAs, MFIs and commercial banks) Three major sources of revenue: the UK wholesale power price; the power price premium (CfD); and the revenue from oil production Key risks affecting the business case: regulatory and permitting risk; changes to capital costs; delays in commissioning; changes in oil price; and challenges with decommissioning.
  • 27. TARGETED REPORTS- CCOP storage mapping program (1)Coordinating Committee for Geoscience Programmes inAsia and South-East Asia (CCOP) Institute support for a CO2 storagemapping program in the CCOPmember countries Preparation work for a CO2Storage Atlas that presents thebest available estimates ofpotential CO2 storage capacityMap of CCOP countries 27
  • 28. TARGETED REPORTS- CCOP Storage Mapping Program (2)CCOP Work ProgramPhase 2 – April 2016 till March 2017Application in Member Countries CCOP Storage AtlasPhase 1 – April 2014 till March 2016Three country case studies(onshore and offshore)Case Study estimationsof storage capacitiesFacilitation Phase – March 2013 till March 2014Align goals and objectivesAgree methodologies and workflow,training courses and workshops28
  • 29. A FINAL WORD: COMMUNICATION IS PARAMOUNT!“ ...a fundamental conclusion is thatcommunication should not be seen as an add-onto the project. Successful projects integratecommunication and outreach as a criticalcomponent of the project from the beginning.”International Researcher Team: Commonwealth Scientific and Industrial ResearchOrganisation (CSIRO), Australia; Energy Research Centre of the Netherlands (ECN),Netherlands; Illinois State Geological Survey, University of Illinois, USA; Pacific NorthwestNational Laboratory, operated by Battelle for the US Department of Energy, USA; and AJWInc., USA.“Despite our positive stakeholder engagement,public opposition still ranked in the top 5 of ourproject risks” Longannet Project. - UKLEFT: Opposition groupposters against theBarendrecht Project - HollandLinlithgow Academy Pupil’s Science CommunicationPosters - reflecting community support andunderstanding of CCS.29