This document summarizes a presentation on carbon capture and storage (CCS) projects in Australia. It discusses Australia's greenhouse gas emission reduction commitments and reliance on fossil fuels, making CCS essential. It outlines the Australian government's support for CCS across the innovation chain, including funding demonstration projects like the CCS Flagships. It notes lessons learned, such as underestimating costs and timeframes and the high risks associated with storage. The challenges of developing CCS include storage issues, building regulations and markets, and attracting long-term private investment across the CCS supply chain.

1. Global CCS Institute
Melbourne Members’ Meeting 2011
Session C – CCS Projects
Presented by Mark Weaver
Clean Energy Division
Australian Government Department of Resources,
Energy and Tourism
ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

2. Greenhouse commitments
• Australia is committed to emission reduction
targets
– By 2020: 5% below 2000 levels
– Proposed: 80% below 2000 levels by 2050
• These targets are a major challenge given our
heavy reliance on fossil fuels
– Coal 77% of electricity and 32% of emissions
– Growing profile of gas/LNG developments
– Improvements in efficiency are important
– However, carbon capture and storage (CCS)
essential to achieve major cuts in emissions
– Responsibilities as a major international energy
supplier
ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

3. CCS puzzle from Australian
Government perspective
Legislative
Certainty
Knowledge &
Collaboration Storage
CCS
Engagement R&D
Demonstration
ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

4. Government support across the innovation chain
TECHNOLOGY PUSH MARKET PULL
Research Development Demonstration Deployment
Pilot Commercial Supported Competitive
Scale Scale Commercial Commercial
Imagining Incubating Demonstrating Promoting Sustaining IMPACT
Competitive,
low-emission
ANLEC R&D energy supply
and use
Greenhouse
CSIRO gas reductions
New industries
CO2 CRC
NLECI
CCS FLAGSHIPS
CARBON PRICE

5. CCS Flagships & commercial scale projects
Gorgon LNG Wandoan /
Project QLD integrated
To sequester 3.5 CCS project
MT per year. To sequester 1 MT
per year. Capture
project under
review.
CarbonNet
Collie South To sequester
1 – 3 MT per year.
West Hub
To sequester 2.4 MT per
year.
ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

6. How does CCS Flagships differ from
other programs?
• Staged selection process
• Preparedness to fund early project development stages
• Close involvement in project development
Photo source: Carbon Sequestration Leadership Forum

7. Lessons learnt from
Government perspective
• Prior estimates of project costs and deployment timeframes –
wildly optimistic
• Development pathway does not sit neatly within a Government
grant program box.
• Do not put the capture plant cart ahead of the storage horse
• All Australian projects involve “greenfield” storage sites
• Accordingly, uncertainty on storage presents the highest risk

8. Future approaches to
Government support for CCS
• Prioritise expenditure on storage – progress capture options
in parallel
• Keep an open mind on funding/ financing mechanisms
• Keep an open mind on risk allocation and sharing

9. Challenges ahead
• Storage – community – resource
conflicts
• Building regulatory consistency and
regulator capacity
• Maintaining funding in challenging
economic times
• Implementing market pull
mechanisms
• Building a business model for private
sector investment across the supply
chain

10. Conclusions
• CCS Flagships Program – necessity required
flexibility
• Domestic and global events present
challenges
• Project development much more
challenging and longer than expected
• Progress - particularly proving up storage is
slow
• Proving up storage is Australia’s highest
priority
• Building the business model is essential
• This will test the risk appetite of Governments
and industry

11. Thank you
ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY