ctl/ctg - boundary conditions and chances of...

RWE Power Dr. Schwendig 2010-05-03 PAGE 1

CtL/CtG - Boundary Conditions and Chances of Implementation

Dr. Frank Schwendig – RWE Power AG


Starting point

CtL/CtG is economic when oil price is higher than 80 $/bbl ?


Analysed CtL/CtG products

~ 580 m³ H2

~ 180 m³ CH4 (SNG)

~ 270 kg Methanol

~ 140 l FuelsCO2 to atmosphere or storage

1 t ligniteGas

conditioningGasification

Products

From RWE‘s perspective, i. e. - power producer with own lignite mines- experience with coal gasification- Germany


Basis for investigations:

⇒

Based on large-scale project⇒

Realistic information about plant technology and for economic evaluations

Project development for450 MW IGCC/CCS Hürth power plant


Criteria for chances of realization

Market> Market volume, market share of production> Demand for product, space for additional production> Market entrance conditions> Necessary infrastructure> …

Costs> Production costs> Market price> Production costs of alternatives> …


Market conditions - summary

H2

- Almost no open market- Low future potential (example: 10 % of H2 produced in IGCC/CCS

Hürth sufficient for complete bus fleet of Berlin)- Only for special cases and small amounts (slip steam)

CH4 (SNG, synthetic natural gas)- Unrestricted market (20 million tons per year of lignite cover

some 4.6 % of Germany’s natural gas demand)- Existing infrastructure- Optimum market conditions


Market conditions - summaryMethanol- Worldwide over capacity- Price risks

Fuels (Diesel)- Unrestricted market (20 million tons per year of lignite cover

some 3 % of Germany’s motor fuel consumption)- Existing infrastructure- Market access possibly problematic- Good market conditions

2000 2000 2200 3000 29504000 4500

55007000

8000

0

5.000

10.000

15.000

20.000

25.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Cumulative Demand Grow th Cumulative Net Capacity Grow th

demand

capacity

Best market conditions for SNG


Main costs drivers

> Fuel (coal) price

> Plant price

> Emission trading system ⇒ carbon price or CCS


Correlation between coal/gas/oil prices

Coal

Gas

Oil

High oil prices alone do not help because of simul- taneously high coal prices

http://isht.comdirect.de/html/detail/main.html?DEBUG=0&dsc=abs&hist=5y&ind0=VOLUME&lSyms=XBNT.FX1&sCat=IND&sPageType=standard&sSym=XBNT.FX1&type=CONNECTLINE&sTab=chart


RWE’s Rhenish lignite mining area

A 4

A44

A46

North-South-

Railway

Key Data- Surface mining ~ 92 M t/a- 3.4 bn t approved lignite reserves- Further potential: 35 bn t resources

Land recultivationSurface Facilities

Power stations

Garzweiler:1.3 bn t coal reserves

Inden:0.5 bn t coal reserves

A61

Hambach:1.6 bn t coal reserves Approved mining claim

Cologne

offers a coal (lignite) resource which is independent from world market and offers stable fuel costs


Development of plant prices

Plants

Oil

When oil prices seemed to be attractive for CtL/CtG, plant prices were also high (price driver is a booming economy)⇒Realization of a project when plant price is low together

with a perspective of high oil prices

http://isht.comdirect.de/html/detail/main.html?DEBUG=0&dsc=abs&hist=5y&ind0=VOLUME&lSyms=XBNT.FX1&sCat=IND&sPageType=standard&sSym=XBNT.FX1&type=CONNECTLINE&sTab=chart


Emission trading system

Emission trading is a significant cost driver for CtL/CtG products

Share of CO2 costs- depending on carbon price- depending on CO2 intensity and

transfer of C into product respectivelyCH4 (SNG)Split of product costs

Basic product costs w/o ETS

CtL/CtG leads to CO2 emissions, i. e. to costs for CO2 certificates


Emission trading system

Emission trading is a significant cost driver for CtL/CtG products

Share of CO2 costs- depending on carbon price- depending on CO2 intensity and

transfer of C into product respectivelyH2Split of product costs

Basic product costs w/o ETS

CtL/CtG leads to CO2 emissions, i. e. to costs for CO2 certificates


Conclusion

CtL/CtG in Germany

> SNG offers best market opportunities followed by diesel; otherwise rather limited applications

> Coal source independent from world market price needed

> Realization of project, when plant prices are low

> Emission trading sets the hurdle for economy significantly higher

ctl/ctg - boundary conditions and chances of...

Documents