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Commercialization Process for CCS on Natural Gas Power Systems Economics of Natural Gas CCS

Commercialization Process for CCS on Natural Gas Power Systems Economics of Natural Gas CCS. USEA Workshop on Technology Pathways Forward for Carbon Capture & Storage on Natural Gas Power Systems 22 April 2014, Washington DC. Haroon S. Kheshgi, ExxonMobil Research and Engineering Company.

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Commercialization Process for CCS on Natural Gas Power Systems Economics of Natural Gas CCS

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  1. Commercialization Process for CCS on Natural Gas Power Systems Economics of Natural Gas CCS USEA Workshop on Technology Pathways Forward for Carbon Capture & Storage on Natural Gas Power Systems 22 April 2014, Washington DC Haroon S. Kheshgi, ExxonMobil Research and Engineering Company

  2. NG-CCS an Important Option in Second Half of Century in Least-Cost Climate Policy Scenarios • Models show CCS to be an important option along with demand reduction, renewables, and nuclear power • Models assume • Future cost of options • Global price on carbon • Technology availability worldwide • Public acceptance • No significant barriers to implementation • Mandating high-cost CCS • Bypasses lower cost options • Endangers public support Source: IPIECA (2013)

  3. Operating Large Scale CCS Projects: Zero Experience with NG-Power-CCS Source: GCCSI 2014 The Global Status of CCS

  4. Cost Estimation: Perspectives on Cost Assumptions Lack of technology maturity Affects cost, and adds uncertainty First-of-kind plant raises cost Capital charges Total erected cost: M & L +installation + offsites + contingencies… Retrofits raise complexity and installation + offsites Indirect cost rise in proportion to direct costs Potential for innovation to decrease cost Cost of capital (financing) must be assumed to estimate cost of emissions avoided

  5. Electricity Cost from Gas and Coal Generation Chart shows zones of lowest levelized cost of electricity (LCOE) for gas vs. coal generation Lowest cost depends on fuel prices and CO2 cost

  6. Electricity Cost from Gas and Coal Generation with CCS Chart shows zones of lowest LCOE including CCS options Boundaries represent avoided CO2 cost between generation technologies Gas CCGT and CCGT-CCS lower LCOE than coal-CCS over a wide range of gas prices

  7. Studies Confirm Broad Economic Window for Gas:Gas-CCS Only Attractive Above ~$100/t CO2 Source: IPIECA (2013)

  8. Summary Current operating facilities rely on a combination of low cost (e.g. gas processing) co-benefits (e.g. EOR) high CO2 cost (e.g. Norway’s carbon tax) Broad economic window for gas and gas-CCS, therefore, an attractive long-term option Current gas-power-CCS technology not demonstrated successfully not attractive until CO2costs above ~$100/t CO2 Recommendations: Advance capture technologies through RD&D to lower cost for power-gen Address barriers to CCS that raise costs or risks to CCS investments Sound regulatory framework for CCS Clear and equitable rules on CCS long-term responsibility

  9. Electricity Cost including Nuclear Supercritical Coal-CCS Gas CCGT-CCS Nuclear Gas CCGT $28/tCO2 Supercritical Coal • Nuclear Chart overlays nuclear zone of lowest LCOE on gas and coal zones • Nuclear dominates coal-CCS, with lower LCOE at all CO2 costs

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