Perspectives on CCS Prospects

Panel Discussion

12th – 18th August 2012 Beijing, China

Locally hosted by Tsinghua University

CCS Global Deployment M

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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%)

IEAGHG Summer School 13 – 17 Aug 2012

Matthew Billson Head of Technology Development

Office of Carbon Capture & Storage

Department of Energy and Climate Change (DECC), UK

UK Energy challenges

• 20% electricity generation will close by 2020 • £100bn investment needed • Reduce CO2 by 80% by 2050

Energy mix: • New nuclear • Renewables • CCS

5

UK CCS activity

Technology & knowledge transfer • FEED studies • 2 projects

Commercialisation programme • £1bn capital grant + “contract

for difference” (£xxxm) • Projects announced Nov / Dec

2012

R&D programme • 2011-2015, £125m

• Ferrybridge, 5MWe, 100t/CO2/pd (operational 2011)

• Aberthaw, 3MWe (operational 2012) • QICS project • UKCCS Research Centre

Public perception • Jobs & growth • Electricity bills

(cheaper than doing nothing)

• My2050 • Local engagement

Changes to UK Electricity Market • Legislative process: summer 2012 – autumn 2013 • Effective from 2014

Time

Price “Low carbon” Electricity

Price “Dirty” electricity

Electricity price

Max Prins Shell

CCS IN THE FUTURE – TAKE-OFF & COMPLEXITY – IMPACT ON JOBS?

CAPTURE TRANSPORT STORAGE

Company ‘A’ Company ‘A’ Company ‘A’

SIMPLE

‘A’

‘B’

‘C’

‘D’

‘E’

‘F’ ‘G’

COMPLEX

9

CCS JOB

• Conventional E&P Industry roles will change

• Projects will get more complex

ISSUES:

• Comunication along the CCS value chain

• Risk awareness

• Liabilities and transfer

WAY FORWARD - TRAINING

In addition to specialists, train E&P professionals that can see across the whole chain

RETAINING CCS CAPABILITIES

• It will take time for CCS industry to take off.

ISSUES:

• How to retain capabilities within companies until CCS fully going on commercial scale

WAY FORWARD - MANAGING CCS STAFF POOL:

• Retain CCS capabilities. Have staff work on containment,i.e. also on sour gas, water injection.

• Many commonalities, this will ensure continuation and maintaining expertise.

Once CCS takes off, create CCS skillpool, training programs etc

Ludger Schluter ALSTOM

16/08/2012

Perspectives on CCS Prospects

IEA GHG Summerschool Beijing

© ALSTOM 2012. 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 ALSTOM’s express written authority is strictly prohibited. .

IEA Summerschool BJ – 16 Aug 2012 P 12

The CCS market is vast and the EU leadership must be preserved

Selected for funding

12

19

19

2

7

2

3

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

Large potential for CCS world-wide

CCS MARKET

Source: Alstom Market Analysis - GCCSI

© ALSTOM 2012. 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 ALSTOM’s express written authority is strictly prohibited. .

IEA Summerschool BJ – 16 Aug 2012 P 13

CCS experience: 16 pilots/demos

Component manufacturer

Alstom know-how for a solid development of

Technology

Introduction Maturity of Technology

Plant integration experience (supply of turnkey power plants)

© ALSTOM 2012. 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 ALSTOM’s express written authority is strictly prohibited. .

IEA Summerschool BJ – 16 Aug 2012 P 14

Hardcoal CCS power plant Post amine CO2 price impact, base case on-shore T&S

CO2 market price scenario Cost of Electricity (CoE)

2025: CO2 price 42 €/tCO2 => ref & CCS plants CoE = 82 €/MWh A realistic CO2 price could trigger the CCS deployment

EUR

2030405060708090

100110

2010 2015 2020 2025 2030 2035

CCS plant w CO2 priceCCS plant base caseRef plant w CO2 priceRef plant base case-40

-20

0

20

40

60

80

2015 2020 2025 2030 2035

Scenario 1 w CO2 priceBase case without CO2 price

€/MWh net€/tCO2

w CO2 price

no CO2 priceRef

plant

CCS plant

73,5

© ALSTOM 2012. 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 ALSTOM’s express written authority is strictly prohibited. .

IEA Summerschool BJ – 16 Aug 2012 P 15

CCS – Political Framework

CO2 regulation to be developed

CO2 regulation already applied

No CO2 regulation to date, IFIs only

Scope: Coal & Gas fossil plants >300 Mwe

Requirement is an assessment of:

availability of suitable storage sites,

technical and economical feasibility of CO2 capture and transport

Suitable space for future CO2 capture

UK requires CCS-Readiness (not assessment only)

European Union

Federal: Requirement to be defined for all new coal PPs Queensland: the requirements for all new coal PPs are: Use of world’s best practice low emission technologies

CCS-ready + retrofit within 5 yrs after CCS validation

NSW & WA: recommendation for all coal power plants:

Implement CCS if economically & technically feasible

Australia

International Financial Institutions

Looking at CCS readiness as a requisit to finance

Coming requirements to be able to meet

CO2 reduction target in the future

www.alstom.com

Eric Drosin Zero Emissions Platform (ZEP)

Jingjing Qian National Resources Defence Council (NRDC)

Time to throw your questions at the experts!