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Overview of the Teesside Collective Industrial CCS
Project and respective insights for the Cement Industry
Tim Dumenil
SCCS Workshop - Industrial CCS: Constraints and
Opportunities for the Cement Industry
28th August 2015
Agenda
Introduction
Why Teesside & Why Industrial CCS (ICCS)
Project Objectives and Overview
Infrastructure Requirements
ICCS Value Chain & Support Mechanism
ICCS Business Case Output
Next Steps for Teesside
Insights for the Cement Industry
2
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Management Consultants for the Energy Transition
Management Consultants for The Energy Transition
1
Carbon Capture & Storage
2
Oil & Gas Transition
3
Emerging Energy Systems
We help organisations of all sizes to create opportunities and mitigate risks arising from major changes in the energy markets.
Pale Blue Dot delivers Management Consultancy to the energy industry, large energy users and the public sector.
© Pale Blue Dot Ltd 2015
Why Teesside & ICCS?
Image Source: Teesside Collective
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TVU Objectives
5
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System Capacity
5 mTpa or
15 mTpa
Storage Solution
Bunter 154km
Captain 433km
Teesside Overview
5 major elements to capture, transportation & storage of 2.8 mTpa of CO21) Capture, 2) Gathering, 3) Boosting, 4) Offshore Transport, 5) Storage
A
B
C
D
E
Image Source: Amec Foster Wheeler
© Pale Blue Dot Ltd 2015
Estimating Infrastructure needs
Multiple sources of CO2 supply
CO2 volumes variable
Longevity of the businesses
Importance of timing of an acceptable ICCS investment mechanism
7
9.7
2.30.3
12Mt CO2 currently emitted
Tier 0, > 1000ktpa
Tier 1, > 50ktpa
Tier 2, > 5ktpa
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Business Case Output
© Pale Blue Dot Ltd 2015
Teesside ICCS is technically & economically viable:
Scenario discounted capex cost ranges £0.8-£2.1bn
Over 20 years the entire ICCS Chain for the Reference Scenario requires undiscounted financial support of £5.4bn (£1.5bn PV7) equating to £95/T for 56.5mT CO2 stored. (13% IRR. 7% Discount Rate)
Capture 47%, Gathering 3%, Offshore 50%
Trebling the infrastructure only requires an additional 8% of support (£104m)
Financial Support
(£/T over 20 years)
Excluding Return Undiscounted PV7
Ammonia 25.5 8.4
Steel 30.5 10.1
Hydrogen 34.8 12.4
PET 116.7 42.8
Including Return Undiscounted PV7
Ammonia 37.4 10.5
Steel 45.3 12.7
Hydrogen 61.6 17.5
PET 214.9 61.6
ICCS Value Chain – initial thoughts
9
Disaggregated model Each emission site will require a capture facility, which may be operated by
the process company, or someone else
Onshore transportation of gases is commonplace & many interested players
Offshore transportation of gases is also commonplace but fewer players
Very few players in storage domain
Several variations all with multiple players, which adds commercial complexity
Onshore TransportationCapture 1
Offshore Transportation
Storage
Capture 2
Capture 3
Capture 4
CO2
Contracts
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Commercial Support Mechanism
10
Image Source: Societe Generale
Three options for a Funding Mechanism reviewed:
a Storage Mechanism Payment
a CO2 CfD Emitter Mechanism
a hybrid
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Next Steps
11
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Ambitious Schedule
“Bridge Phase” to secure funding and support for transition from Concept Study to Pre-FEED
Establishing an agreed Funding Mechanism solution with HMG is key
Additional emitters, i.e. new Power CCS project, to help fill 15 mTPa infrastructure and deliver significant scale efficiencies
Teesside Conculsions
12
ICCS technically and economically viable… but…
Full Chain Costs: 50% Capture, 50% Transport & Storage
Lots done and known on capture. Storage??
Commercially more complex versus a single full chain power station project
Multiple sources, vastly differing scales, cross-chain liabilities
Increased risk of commercial carbon leakage
Multiple players add complexity to risk allocation & financing
Maintaining the “polluter pays” principle
Financial support needs may be significant. ICCS needs a commercial mechanism that is attractive to global corporations
© Pale Blue Dot Ltd 2015
Cement Industry: CCS is core to Carbon Strategy
13
4 levers for CO2 emission reductions Energy efficiency 10%
Alternative fuels (biomass) 24%
Clinker substitution 10%
Carbon Capture and Storage 56%
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Image Source: IEA and MPA
Cement Industry: CCS is core to Carbon Strategy
14
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Anticipated CCS Beachheads
CCS Progress
Capture via 2 options √
Oxyfuel at €50/T CO2
Storage??
Scale of Factory
1-2 mT
10 mT
Regional Solutions
Cost of Cement
Image Source: ETI and MPA
Tim Dumenil
Creative Spirit and Energy Consultant
Management Consultants for the Energy Transition Carbon Capture & Storage – Oil & Gas Transition – Emerging Energy Systems
t: +44 1330 826890 m: +44 7891 385 395
e: [email protected] w: www.pale-blu.com Pale Blue Dot Energy Limited, Scotland Registered No: SC453362 Business Office: Brathens Eco-Business Park, Hill of Brathens, Glassel, Banchory, Aberdeenshire, AB31 4BW Registered Office: Johnstone House, 52-54 Rose Street, Aberdeen, AB10 1HA, United Kingdom