Industry Perspectives Panel Discussion
IEAGHG International CCS Summer School 18th – 23rd July 2011
Champaign, Illinois, USA Locally hosted by STEP and MGSC
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IEA Blue Map: Goal of halving global energy-related CO2 emissions by 2050 (compared to 2005 levels) & least-cost means of achieving goal through the deployment of existing and new low-carbon technologies - CCS is used to capture 9.4 Gt of CO2 from plants in power generation (55%), industry (21%) and fuel transformation (24%)
© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Global market for CCS is huge – particularly in Asia
Selected for funding
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19
19
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Asia
China
India
Russia & CIS
Europe
MEA
NAM
LAM
Global Power Market in next 5 years
64 Nr of CCS projects Source: GCCSI
Wind
Hydro
Nuclear
Coal
Gas
Solar
Other renewable
Huge industrial opportunity!
CCS MARKET
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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
The ‘Grand Challenges’ of CCS
• Timescales – Speed of development and deployment • Technology diversity • Integration – CCS components to CCS systems • Scale-up issues – Pilots to demos • Roll-out to meet targets – ‘MW to GW’ • CCS economics and financing • Cost reduction of capture • Secure, long-term storage • Public perception and acceptance • Policy, politics and regulation
© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
The ‘Grand Challenges’ of CCS
• Timescales – Speed of development and deployment • Technology diversity • Integration – CCS components to CCS systems • Scale-up issues – Pilots to demos • Roll-out to meet targets – ‘MW to GW’ • CCS economics and financing • Cost reduction of capture • Secure, long-term storage • Public perception and acceptance • Policy, politics and regulation
© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
The ‘Grand Challenges’ of CCS
• Timescales – Speed of development and deployment • Technology diversity • Integration – CCS components to CCS systems • Scale-up issues – Pilots to demos • Roll-out to meet targets – ‘MW to GW’ • CCS economics and financing • Cost reduction of capture • Secure, long-term storage • Public perception and acceptance • Policy, politics and regulation
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IEAGHG Summer School, Champaign, IL. July 17–22, 2011
Technological
Political
Social
Economic
STEP / PESTLE analysis
The Macro Environment... Obstacles and Barriers
Legal
Environmental
The Macro Environment... Gateways & Opportunities
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IEAGHG Summer School, Champaign, IL. July 17–22, 2011
The Competitive Business Environment
Porter’s 5 Forces
Potential Entrants Threat of new entrants
Substitutes Threat of substitute
products and services
Suppliers Bargaining power of suppliers
Buyers Bargaining power of buyers
Industry Competitors
Rivalry amongst existing firms
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IEAGHG Summer School, Champaign, IL. July 17–22, 2011
‘5 forces’ for CCS
Potential Entrants: ● Who would want to ? Substitutes: ● No ‘single’ solution, but... ● ...other low carbon technologies ● None for Industrial Processes ● None for Carbon Negative Industry Competitors: ● None yet
Suppliers: ● No integrated CCS supplier
― Capture, Transport, Storage separate ● Partnerships & Alliances keys ● Oil & Gas industry
a good technology source ― but it’s not the same industry
Buyers ● ... Think that ‘CCS is expensive’
― Not so, it simply comes in large chunks ― Not expensive compared to
‘do nothing’ or ‘Business As Usual’ (BAU) scenarios
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IEAGHG Summer School, Champaign, IL. July 17–22, 2011
CCS Business Model ?
The costs The uncertainty Capture
Storage Capture
Storage
Is this a good start for a CCS business model? Perhaps we should look a better balance ?
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IEAGHG Summer School, Champaign, IL. July 17–22, 2011
CO2 Technology All Seismic Services Wellbore Integrity Evaluation Drilling & Completion Cementing Logging, Testing & Sampling Lab Analysis Data Processing Modeling & Plume Prediction Data Management Operational Monitoring Verification Monitoring Compliance Monitoring
What’s Needed for Storage Project Success…
People + Technology
&
People
Geology Geophysics
Reservoir Engineer Drilling Engineer
Petrophysics Completion Engineer
Geomechanics Geochemistry
Hydrogeology Economics
HSE Injection
Project Management
People
Geology Geophysics
Reservoir Engineer Drilling Engineer
Petrophysics Completion Engineer
Geomechanics Geochemistry
Hydrogeology Economics
HSE Injection
Project Management
Tools for Team Integration
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IEAGHG Summer School, Champaign, IL. July 17–22, 2011
Industry Perspectives on CCS
● Not happening yet ● Needs to be attractive to buyers ● Needs to be attractive to suppliers ―or they will just find other things to do with the resources
● A business is not just a bunch of demonstration projects ● Large scale deployment of CCS will need large storage sites. ―Saline formations are a key resource to develop.
● It needs to happen ― “...there is no alternative.” (Margaret Thatcher) ― “We must succeed...” (Dan Quale)
Technology - What do we know today?
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Finance
€ Legal
Public awareness
Main CCS challenges in Europe are non-technical:
R&D
TODAY 1st gen. CCS technology
is available, ready for scale up + integration!
2nd gen. 3rd gen.
CO2 capture challenges
Addressing cost and efficiency losses through EU demo programme
CCS & carbon negative potential
2nd and 3rd gen. R&D must start now!
€ Funding gaps:
Large pilots
Demonstration projects
Early commercial projects
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CO2 transport
CO2 pipeline technology is mature but combined systems have yet to be developed
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Possible issues ?
€
Cross border/region/ state line transport
Infrastructure development key to wide-scale deployment & cross-sectoral engagement
Financing excess transport capacity in first-mover projects
CO2 storage
Saline aquifers = challenging, but superior storage potential
Demonstration projects will provide key learnings
TODAY: R&D projects
Moving from R&D projects to small pilots/large scale storage sites
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The R&D imperative
Post-combustion – integration and optimisation with power plant; improve solvents Pre-combustion – improved gasification of solid fuels; full process integration and optimisation for power, competitive availability and load-following characteristics Oxy-fuel –boiler design & CO2 capture, compression and conditioning processes
CO2 capture
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Saline Aquifers: procedures & modeling CO2 quality impact on transport and storage Wellbore integrity Adapt and develop safety assessments and standards for large-scale transport Mitigation and remediation
CO2 storage and transport
Maximise knowledge sharing
Sharing beyond the minimum legal requirement
Transparency and relevant information
Distinguish between stakeholders & categories of knowledge / levels of detail
Share knowledge on a reciprocal basis with EU & developed/developing countries
Key to success of EU demo programme by:
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CCS
Realise the full potential of CCS
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CO2 in industrial processes and
products
Geothermal heat production
Establish an overarching
2050 energy
decarbonisation scenario
Maximise international cooperation
CCS =
hydrogen production!