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What next for CCS – CCSA perspective
Judith Shapiro
UKCCSC Early Career Winter
School, Cambridge
Thursday 12th January 2012
The Carbon Capture & Storage Association
www.ccsassociation.org [email protected]
Agenda
• The CCSA
• 2011 – what happened
• 2012 – what to expect
• CCSA Strategy
• Opportunities
• Key issues
www.ccsassociation.org [email protected]
What is the CCSA?
It is:
A Business Association formed in the UK to represent the interests of its members in promoting the business of geo-CCS wherever opportunities may exist, as well as assisting policy developments in the UK, EU and internationally towards a long-term regulatory framework for CCS, as a cost-effective means of abating CO2 emissions
It is not:
A technical forum, a professional institute or an environmental or climate campaign group.
www.ccsassociation.org [email protected]
Vertical slice of policy
influence
• UK
• Europe
• International
www.ccsassociation.org [email protected]
CCSA Members (74)
2Co Energy Air Liquide Air Products Aker Clean Carbon Allen & Overy Alstom Power AMEC Anthony Veder Group Arup BG Group BOC BP Calix Camco International CCS TLM Chevron Clean Energy Group CMS Cameron McKenna CO2 Sense (Yorkshire) CO2Tech Centre Mongstad
ConocoPhillips Costain DNV Doosan Power Drax Power Durham University EDF Energy EON ERM ESB Fluor Gassnova GDF Suez GE Energy Herbert Smith Howden Group Jacobs Engineering Linklaters Lloyd’s Register Maersk Oil & Gas Masdar Mitsubishi Heavy Industries
MMI Engineering N8 Nottingham Centre for CCS National Grid National Physical Laboratory Norton Rose Peel Energy Perenco Petrofac CO2DeepStore Poyry Progressive Energy PWC Rhead Group Rio Tinto RPS Sasol Schlumberger Scottish Carbon Capture & Storage
Scottish Enterprise Scottish European Green Energy Centre ScottishPower Senergy SGS United Kingdom Shell Siemens Statoil Tata Steel Tees Valley Unlimited Total Vattenfall Wood Group Energy Zurich
www.ccsassociation.org [email protected]
2011 – what happened
A turbulent year:
Demo 1 not proceeding
Funding
Delays
…But:
Ferrybridge CC Pilot 100+
Demo 1 Feed studies
Electricity Market Reform
CCS in CDM
www.ccsassociation.org [email protected]
Electricity Market Reform
• Feed in Tariff Contract for Difference
CCS on equal footing other low-carbon technologies
World’s first mechanism to incentivise CCS beyond demonstrations
Transitional arrangements
• Carbon Price Floor
£30/tCO2 (2020)
£70/tCO2 (2030)
• Emissions Performance Standard Set at 450g CO2/kWh
• Capacity payments
www.ccsassociation.org [email protected]
2012 – what to expect (1)
Launch of Demo programme
Aim: cost-competitive CCS in the 2020s
(comparable to other low carbon technologies) Projects operational 2016-2020
Flexible approach
Consideration of part-projects and cluster (+ industrial)
Contract signature within 6-9 months
what’s still on the table? £1bn reallocated
EMR (FiT CfD)
NER300
£125m CCS R&D Programme
www.ccsassociation.org [email protected]
2012 – what to expect (3)
• More clarity on EMR FiT CfD
• NER300 Selection process to conclude 2H 2012
12 CCS projects submitted in total (6 from UK)
Challenges (NER300)
Taking longer to implement than expected
Uncertainty over level of support; EUA price & MS support
Number of early projects delayed
www.ccsassociation.org [email protected]
•Launched 8th September 2011
•Sets out CCS industry view on the ambition for CCS to reach 2030 decarbonisation of the power sector
•How to get from Demos to commercial roll-out of CCS in the 2020s
•Download from CCSA website:
http://www.ccsassociation.org/
CCSA Strategy
www.ccsassociation.org [email protected]
CCSA Strategy - Ambition
• UK Climate Change targets: Reduce GHG emissions by at least 34% by 2020 Reduce GHG emissions by at least 80% by 2050
• Committee on Climate Change (CCC) recommends decarbonised power sector by 2030 • 70GW of low carbon electricity required by 2030 • EMR noted 1/3 of electricity from renewables by 2030. Remaining 2/3 should be met by nuclear, CCS abated fossil fuels and some unabated fossil fuels.
CCSA therefore believes 20-30 GW CCS by 2030 is an appropriate ambition
www.ccsassociation.org [email protected]
1.6 GW in 7
yrs
UK Demos 1-4
25
20
15
10
5
0
2015
2020
2025
2030
UK target
20 GW by 2030
CCS in o
pera
tion (
GW
)
Trajectory
www.ccsassociation.org [email protected]
Trajectory – ‘Progressive Roll-Out’
3GW/yr
1.6 GW in 7 yrs
25
20
15
10
5
0 2015
2020
2025 2030
CCS in o
pera
tion (
GW
)
2GW/yr
1GW/yr
Initial projects will enable networks to de-risk and lower costs of
further projects
2 -4 networks established by 2020 & Retrofits underway
All Regional networks initiated by 2025
First industrial CCS Demo
before 2020
Many industrial
CCS projects
underway by 2025
Large scale storage in saline
formations as well as depleted gas fields likely to be needed by 2020
UK target
20 GW by 2030
www.ccsassociation.org [email protected]
Costs of CCS – Power
• Latest levelised COE data show CCS with gas or coal to be a competitive low carbon electricity option
• CCS Investment costs (£1-2Bn/GW) are lower than nuclear (£3Bn/GW) or offshore wind (£7 Bn/GW)
•CCS is reliable and flexible, and able to complement nuclear and renewables
•CCS causes much less of an increase on Overall System costs (grid, interconnectors, back-up) than alternatives (+15% vs +40%)
•Source: Committee on Climate Change.
•CCC Calculations based on Mott MacDonald (2011) Costs of low carbon generation technologies
www.ccsassociation.org [email protected]
Costs of CCS - Industrial
Source: DECC Clean Coal industrial Strategy based on IEA Technology Roadmap for CCS
• Industrial CCS costs between 20 and 100 USD/t
•There is rarely a renewable alternative
•Some of these costs are less than the ETS carbon price floor* so CCS may be a cheaper option than buying certificates
•*UK Carbon Price Floor will be £70 (113$ ) in 2030
www.ccsassociation.org [email protected]
Total Jobs
0
50,000
100,000
150,000
200,000
250,000
300,000
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
Jo
bs
(m
an
ye
ars
)
UK Possibly UK Non UK
Opportunities
Source : IPA Scotland
UK plc business could be valued at more than £10Bn/yr by 2025
Potentially more than 50,000 jobs in UK by 2035
Potentially more than 20,000 jobs in UK by 2020
www.ccsassociation.org [email protected]
• Infrastructure Right-sized infrastructure (transport and storage)
Cluster/network solutions
Power and industrial
• Industrial Increasing costs of climate change policies
Few alternative options
Maintaining UK competitiveness
• Storage
• Regulations Third Party Access, Marine Planning, Petroleum to CCS licence transition, Financial Security provisions…
Key Issues
www.ccsassociation.org [email protected]
Contact
Judith Shapiro Policy & Communications Manager The Carbon Capture & Storage Association Suites 142-152 Grosvenor Gardens House 35/37 Grosvenor Gardens London, SW1W 0BS United Kingdom Tel: +44 (0) 20 7821 0528 Mob: +44 (0) 7719 763 133 Email: [email protected] Website: www.ccsassociation.org