This third webinar in the series 'CCS in Developing Countries' was presented by the World Bank. Deploying CCS in developing countries is critically important. The International Energy Agency estimates that to achieve global emissions reduction targets 70% of CCS projects will be in non-OECD countries by 2050. CCS faces a number of challenges, in all countries, but particularly in developing countries. This webinar discussed some of these challenges and barriers using South Africa as a case study. South Africa is working towards a Test Injection Project and subsequently a Carbon Capture and Sequestration Project. The World Bank considered it important to understand a set of constraints, including regulatory, technical, economic, human capacity, etc. to realization of CCS demonstration and commercialization, and how the CCS development will look like in the South African context, out to 2050. A techno-economic assessment has been undertaken to gain this understanding. The techno-economic assessment explored CCS deployment in six relevant industries in South Africa, and assessed projected scenarios associated with key issues of interest (such as cost, impact on electricity prices, timeframes etc). The key output from the techno-economic study was a techno-economic model, supported by the data sets, specifically for South Africa. The potential storage site capacity has been analysed to provide a strong indication of the likely storage capacity available within physical and economic constraints.

1. Key issues and barriers in developing countries
Webinar – Wednesday 06 May 2015, 0630 AEST

2. Natalia Kulichenko-Lotz
 Natalia Kulichenko-Lotz is a Senior Energy Specialist in the
Energy and Extractive Global Practice at the World Bank. Her
work addresses energy sector policy dialogue and sector reform,
coal and gas-fired power generation, transmission and
distribution networks, energy access as well as advanced
energy technologies, including concentrating solar power and
carbon capture and storage, and related policy and project
development. She holds a Ph.D. in Chemical Engineering, M.Sc.
in Electrical Engineering, and MBA with specialization in
international finance.
Senior Energy Specialist – World Bank Group
 Dr. Kulichenko-Lotz currently manages the World Bank’s energy sector portfolio in
Tanzania, and CCS programs in South Africa, Botswana and Mexico.
 Prior to joining the Bank, Dr. Kulichenko-Lotz worked in a number of U.S. government
and international organizations including the U.S. Department of Energy, U.S.
Environmental Protection Agency, U.S. Agency for International Development, Asian
Development Bank, Pacific Gas and Electric Utility as well as other private companies
and electric utilities.

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4. Moving Forward Carbon
Capture And Storage in
Developing Countries
Natalia Kulichenko-LOtz
Energy and extractive industries global practice
World bank group

5. Presentation Overview
1. Technology development stage
2. International trends
3. Global Climate Change Policy/ country specific Climate Change
Policies
4. Barriers to CCS deployment in developing countries
5. World Bank engagement in supporting development country clients
6. Mexico Program
7. South Africa Program
8. Techno-economic assessment of CCS deployment in S. Africa
5

6. 6
Renewable energy deployment is proceeding at pace
“Fossil Fuels Just Lost the Race Against Renewables” – Bloomberg Business
(15 April 2015)
Source:
IEA Energy Technology
Perspectives 2014

7. 7
But…climate targets difficult to achieve without CCS
Some key findings by the IPCC 5th Assessment Report (2014):
 GHG reduction scenarios reaching about 450 ppm CO2eq by 2100 – the
generally accepted target to limit climate warming to 2°C – are characterized
by:
o rapid improvements in energy efficiency, and
o tripling to nearly a quadrupling of the share of zero- and low-carbon
energy supply by 2050 from:
– renewables
– nuclear energy, and
– fossil energy with carbon dioxide capture and storage (CCS) or bioenergy
with CCS (BECCS)
o these reduction scenarios also typically rely on the availability and
widespread deployment of BECCS and afforestation after 2050
 The total discounted mitigation costs across models rise by an average of
138% without CCS
Source:
IPCC 5th
Assessment Report – Working Group III Summary for Policy Makers

8. 8
Greater CCS deployment is dependent on stringent
climate change policy
CCS is solely a climate change mitigation technology
No stringent climate change policy = limited/no more CCS
Stringent climate change mitigation policy will:
◦Facilitate further deployment of large-scale CCS projects which will reduce
costs and energy penalty
◦Incentivise pre-commercial CO2 geological exploration and increase
understanding of storage capacities
◦Encourage CCS regulatory frameworks to be implemented outside the
developed world (where frameworks are generally already in place)
◦Promote increased public acceptance of the need to address climate change
Internationally, COP21 in Paris (Dec 2015) is aimed at establishing such stringent
climate change policy

9. 9
Barriers to deployment in developing countries
What concerns our clients:
1.Lack of global climate change policy/internationally binding commitments from
industrialized countries
2.Lack of financing mechanisms
3.Lack of capacity – technical and human;
4.Inadequacy of current regulatory frameworks – long lead times to develop new
or adapt the existing ones;
5.Costs, cost, cost – CCS technologies are expensive, a substantial burden on
national scarce resources – development agenda takes priority

10. 10
Stage of CCS in developing countries
Key: Some activity in this space Source: Global CCS Institute

11. 11
Levelized cost of
electricity with CCS
Median levelized cost of
electricity with CCS
(Low Full Load Hours)
Median levelized cost
of electricity with CCS
(Low Full Load Hours)
Source:
Modified from the IPCC 5th
Assessment
Report – Working Group III

12. 12
The World Bank CCS Trust Fund (WB CCS TF)
We started with capacity building. Main objectives of WB CCS TF are:
 To support strengthening capacity and knowledge building to create
opportunities for developing countries to explore CCS potential
 To facilitate inclusion of CCS options into developing country low-carbon
growth strategies and policies
Total contributions to the Trust Fund to date are USD 57 million, with
contributions coming from the UK, Norway and Global CCS Institute
Phase I supported analytical work in 9 countries, Phase 2 will support preparation
of two pilot projects in Mexico and South Africa

13. 13
Phase I CCUS Program in Mexico
 Phase I runs from Aug 2012 to Dec 2015
 Funds allocated: US$ 1.3 million
 Encompasses five projects:
◦ Undertake a prefeasibility study for a capture pilot plant at a natural gas-
fired power station
◦ Assess the monitoring and regulatory requirements for converting EOR
sites into permanent CO2 storage sites
◦ Undertake a study to establish a legal and regulatory framework for
CCUS
◦ Develop a public engagement strategy
◦ Support capacity building where opportunities arise

14. 14
Proposed Phase II CCUS Program in Mexico
 Phase II will run for 5 years from 2015 to Dec 2019
 Five major projects being proposed (but not yet approved):
◦ Detailed design (FEED), construction and operation of capture pilot
plant
◦ Implementation of measures to convert the PEMEX CO2-EOR pilot to
permanent storage project
◦ Establishment of a México Centro de CCUS
◦ Implementation of a CCUS legal and regulatory framework
◦ Assessment of GHG emission reduction options for Mexico (“wedges
study”) and the role of CCUS

15. 15
Phase II CCS Program in South Africa
 Phase II will run for 5 years from 2015 to Dec 2019
 Funds allocated: US$ 27.4 million
 Encompasses three projects:
◦ Exploration, design, construction and operation of a Pilot CO2 Storage
Project (PCSP)
◦ Scoping, design, construction and operation of a CO2 Capture Pilot
Project (CCPP)
◦ Support for the South African Department of Energy development of a
CCS legal and regulatory framework

16. 16
South Africa has a heavily coal-based economy:
 7th largest coal producer in the world
 Coal produces 94% of electricity production (two further 4 800 MW power
plants under construction including Medupi)
 Coal used to meet 30% liquid fuel demand
South Africa is however committed to climate change mitigation
 “With financial and technological support from developed countries, South
Africa for example will be able to reduce emissions by 34% below business as
usual by 2020 and 42% by 2025” – President Jacob Zuma, Copenhagen 2009
Given the coal-based economy, CCS could have significant CO2 mitigation
potential in South Africa
CCS could be a critical technology in South Africa
Source:
The South African Centre for Carbon Capture & Storage

17. 17
2013 Techno-Economic Assessment
Purpose of Assessment
 Explore techno-economics of Carbon Capture and Storage (CCS) development,
deployment and commercialisation in South Africa up to 2050
Assessment Results
 Techno-economic model supported by data sets prepared for South African
context, with the potential storage site capacity analysed further to provide
the likely storage capacity available with physical and economic constraints.

18. 18
Assessment inputs
Study compromises the following elements
 Acquiring information on power and industrial emitters and identifying emitters
with potential for capturing CO2;
 Identifying and costing the capture technology for each emitter;
 Routing the trunk lines from capture regions and identifying appropriate branch
lines from each emitter and costing
 Storage modelling of a wide rang of flow rates and injection durations to assess
and identify 30 year dynamic capacity and injectivity results;
 Compiling the techno-economic model bringing together the above to calculate
cost impact; and
 Reporting and results dissemination

19. 19
Assessment Outputs
Specific Outputs
 The volumes of CO2 captured and stored between 2025 and 2050 for
each sector;
 Incremental cost of CCS deployment in each sector;
 Investment requirements for CCS Infrastructure in each sector;
 Impact on electricity generation costs;
 Cost per tonne of CO2 captured;
 Impact on cost for different CCS technologies and storage assumption;
and
 Timescale costs for deployment.

20. 20
Included CO2 Emitters
South Africa energy needs largely driven by coal
 It is estimated South Africa emits about 510 mtpa of CO2 of which potentially
380 mtpa could be captured
 Eskom reported 232 mtpa and SASOL 61 mtpa of CO2 equivalent
 Eskom power generation and SASOL CTL/GTL processes emitting CO2
assessed for capture
 A number of other industries such as cement production, fuel refineries,
metals and paper and pulp mills are also assessed
 The focus is on the future; that is Eskom’s current fleet of coal fired
generation plants that will be retired between now and 2030 are excluded
from consideration
 Consultant compiled a view of future emissions

21. 21
CO2 Capture
Constraints on Capture / Criteria for Inclusion
 Age of plant: must be ≥ 10 years remaining after date of potential
application of capture
 Scale: must emit ≥ 400,000 tpa of CO2
 Water availability: must be sufficient water available
 Plot area: must be sufficient space available for installation of carbon
capture equipment
 Transport – some plant may be excluded if transport would be unfeasible
(transport decision)
 No cost constraints – initial focus on technical feasibility

22. 22
Potential Storage Basins
Onshore
Algoa
Pletmos
& Infanta
Bredasdorp
S Outeniqua
Algoa &
Gamtoos
Durban &
Zululand
Orange
Northern
Karoo
Molteno
Indwe
Durban
Lebombo
Springbok
Flats
Onshore
Zululand
Durban
& Zululand
Cape Town
Johannesburg
Durban
Port Elizabeth
Bloemfontein
Beaufort West
250 km

23. CO2 Capture Volumes
23
Sector Number of sites
with CO2 capture
Max. annual
capture rate (mtpa
CO2)
Total captured
2025-50
(mt CO2)
Power Generation 22 188.5 4,582
Refining and
CTL/GTL
9 58.5 1,521
Metals 14 37.6 979
Cement 11 10.7 278
Paper 6 7.5 195
Total 62 305.7 7,556
 Majority of sites identified for CO2 capture in north-east of South Africa

24. 24
Capture
 For power sector, capture CAPEX & OPEX derived from existing in-house cost
models
 Modelled as real costs, 2013 basis, without inflation
◦ Recognises technology / cost improvements between now and 2025
 Costs determined for all three capture options for coal fired plant and for
post-combustion capture on natural gas CCGT plant
◦ Cost of IGCC used as proxy for high cost scenario for post-combustion capture
 Costs included to replace net output lost as a result of implementing CO2
capture
◦ Assumed that replacement output from new-build nuclear; costs from in-house cost
models
 For industrial sectors, CAPEX & OPEX derived from published sources
◦ Engineering judgement used where gaps in available data
Capital and Operating Costs

25. 25
Economic Results
Sector Capture cost
(ZAR m)
Transport cost
(ZAR m)
Storage cost
(ZAR m)
Total cost
(ZAR m)
Power
Generation
1,903,965 258,407 216,055 2,378,427
Refining and
CTL/GTL
157,284 85,751 71,697 314,732
Metals 207,908 55,202 46,154 309,264
Cement 107,074 15,697 13,124 135,895
Paper 27,784 11,018 9,212 48,014
Total 2,404,016 426,075 356,242 3,186,332
Consolidated CAPEX & OPEX by Sector - Base Case

26. 26
Economic Results
Consolidated CAPEX & OPEX by Sector - Base Case

27. 27
Sector Total cost of CCS
(ZAR/tonne CO2)
Incremental cost of
production
(ZAR)
Power Generation 519.0 513/MWh
Refining and CTL/GTL 207.0 13.9/bbl
Metals 315.9 211/tonne
Cement 488.2 351/tonne
Paper 245.7 827/tonne
Overall 421.7
Levelised Costs by Sector - Base Case
Economic Results

28. 28
Economic Results
Levelised Costs by Sector - Base Case

29. 29
Sector Electricity costs
(ZAR/MWh)
Average Consumer price 503
Eskom primary energy 206
Average cost of Gen 410
Additional cost of CCS 513
Impact on Cost of Electricity - Base Case
Economic Results

30. 30
Economic Results
Impact on Cost of Electricity - Base Case

31. 31
The Pilot CO2 Storage Project
The South African government and the South African National
Energy Development Institute is currently focused on the Pilot CO2
Storage Project
The Project will store 10,000 – 50,000 tCO2 and aims to:
◦Demonstrate safe and secure CO2 storage in South African
conditions
◦Increase the South African human and technical capacity
◦Raise awareness of the potential importance of CCS
◦Work with government to develop a South African CCS legal and
regulatory environment
Receiving USD 27.3 million from the WB CCS Trust Fund
The Project is currently in the Data Analysis and Project Planning
stage
Source:
The South African Centre for Carbon Capture &
Storage

32. Thank you
nkulichenko@worldbank.org

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