Making the business case for CCS

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Jane Paxman, Policy and Communications Director, 2Co Energy

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Making the business case for CCS

  1. 1. making the businesscase for ccsLessons Learnt from Early CCS/CCUS demonstrationand DeploymentGCCSI EMEA Members’ MeetingEdinburgh, May 2013Jane Paxman, Director Policy and Communications
  2. 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. 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. 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. 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. 6. the reverse effectDVPP business plan:operating cost split (steady-state)6CO2 tax = EU ETS allowance purchases
  7. 7. the reverse effectDVPP business plan:revenue profile7
  8. 8. the reverse effect

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