Sarah Tennison (Tees Valley Unlimited) - Teesside Collective: Current Progress on the Industrial CCS Project in Teesside - UKCCSRC Cranfield Biannual 21-22 April 2015

1. Developing an industrial CCS network in
Teesside
Sarah Tennison
@Teescollective
www.teessidecollective.co.uk
info@teescollective.co.uk

2. Why ICCS and Why Teesside?

4. Over £3bn investment over last
5 years
Company Capex
SSI £1.9 billion
Air Products £600 million
Sembcorp and SITA £200 million
SNF Oil & Gas £150 million
BOC Linde £100 million
Huntsman Tioxide £65 million
Lotte Chemicals £60 million

5. Who are Teesside Collective?
Multinational companies based in Teesside with an
interest developing a CCS network on Teesside
BOC Largest steam methane reformer in UK
Growhow Largest UK ammonia fertiliser
producer
SSI Europe’s second largest blast furnace
Lotte produces PET for15bn drinks bottles
per year
National Grid Store developer
TVU Local Government
NEPIC Cluster representative
“CCS on industrial plants is going to be a
critical part of the global effort to prevent
serious climate change. Teesside is in the right
place, at the right time, to get ahead of the
curve.”
Sir David King, UK’s Special Representative
for Climate Change
“A CCS network in Teesside is a critical step,
giving a shot in the arm to British industry’s
long-term future.”
Dianne Sharp, North East Director, CBI

6. What will Teesside Collective
do?
• Use the £1million received from DECC to:
– Engineer and cost a solution to capture CO2 from 4 industrial plants, onshore transport network, offshore
transport network, and identify a store
– Develop the Business Case for an industrial CCS network
– Propose a solution to ‘how can Industrial CCS be funded?’
• We have:
– Commissioned Pale Blue Dot, Amec Foster Wheeler, and Societie Generale
– Completed the Engineering
– Developed the draft Business Case
– Developed the draft funding models
– Commissioned the economic impact assessment
• Project will be launched by July 2015 – as much information as possible will be public

7. Funding mechanism
• Without a funding mechanism, such as the low carbon power sector has, Industrial CCS will not
happen
• Costs cannot be passed on to consumers
• EU ETS certificates are not bankable
• Industrial companies can close – long term financing unavailable
• Clustering important to minimise individual credit risk and decrease infrastructure costs
• Taking the Transportation and Storage out of project to reduce risk and make project more
bankable – Regulated Asset Base, Capital Grant
• NER400 opportunity, especially for Transport and Storage for clusters
• A funding mechanism is possible and will be presented by July

8. ICCS Timetable and Key Risks
Critical Path Risks
• Ability to attract Pre-FID finance before funding mechanism in place
• Government timetable for implementing a funding mechanism
• Storage – speculative FID on additional storage sites
Teesside Collective
• 2015 – 2016: Scope Pre-FID work and identify Pre-FID funding
• 2016 – 2019: Undertake Pre-FID work - permitting and
consenting, FEED, initial engineering, agree finance
structure, agree ownership structure, agree storage tariff
• 2019 – 2021: Bid for NER 400 for and apply for UK Government’s
ICCS funding mechanism
• Early 2020’s: Reach FID, let EPC contracts, start operations
Storage Operators (who ???)
• 2015 – 2018: Secure funding to develop follow on storage sites to FID
including storage appraisal, storage permit,
agreement of financial securities and liabilities
UK Government
• 2015 – 2016: Identify funding for Industrial CCS Pre-FID work
and storage development
• 2015 – 2019: Agree ICCS funding mechanism, agree budget,
and obtain legislation change
• 2019 – 2021: Agree Member State NER400 projects and
match funding principles
EU
• 2015: Agree with Member states to/not-to sell
additional 300m EUA allowances
• 2016 – 18 Agree eligibility for 300m allowance fund
• 2015 – 19 Agree eligibility for NER400 and method for pre-
selection of projects before allowances sold
• 2020+ Process NER400 applications