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Making the business case for CCS

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Jane Paxman, Policy and Communications Director, 2Co Energy

Jane Paxman, Policy and Communications Director, 2Co Energy

Published in: Business, Economy & Finance

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  • 1. making the businesscase for ccsLessons Learnt from Early CCS/CCUS demonstrationand DeploymentGCCSI EMEA Members’ MeetingEdinburgh, May 2013Jane Paxman, Director Policy and Communications
  • 2. the reverse effectWhat was considered important to the business case?0 1 2 3 4 5 6Regulated returnsViable storage solutionsLarge, credible suppliersLong term supply, offtake…Tax incentivesProject clusteringPremium power priceGovernment-backed lendingCO2 emission priceEOR revenueCapital grant2
  • 3. the reverse effectDVPP business plan:EOR would enable zero cost storage3Power PlantCapture StorageTransport2Co’s storage costs do not pass back to the plant, asthey will be covered by EORCosts from transport
  • 4. the reverse effectDon Valley CCS project funding requirement:significant funding challengeApproximately £5bn capex requiredacross the Don Valley CCS project value chain4Estimated total project costs(excluding financing fees)Estimated power plant costbreakdownComponent Share (%) Component Share (%)Power plant 68% CCS 59%Transport (2Co share) 0% Non-CCS 26%Storage 26% Other 7%Sub-total 94% Sub-total 91%Financing costs* 6% Financing costs* 9%Total 100% Total 100%* Financing costs comprise fees and interest accrued during construction
  • 5. the reverse effectDVPP funding requirement:proposed funding allocation5Potential sources of fundingfor DVPPPotential sources of debtfundingShare (%) Share (%)Grants 26% MFI 24%Equity 14% ECA 58%Debt 60% Commercial 18%Total 100% Total 100%
  • 6. the reverse effectDVPP business plan:operating cost split (steady-state)6CO2 tax = EU ETS allowance purchases
  • 7. the reverse effectDVPP business plan:revenue profile7
  • 8. the reverse effect