Overview of CCS development

1. Overview of CCS development

2. “The Development of clean coal technology is one of the biggest challenge of our industry. Indeed, it may be the biggest” - WulfBernotat, CEO, EON -

3. Where are we and where we are heading- hard facts “Electricity generation is entering a period of transformation as investment shifts to low-carbon technologies — the result of higher fossil-fuel prices and government policies to enhance energy security and to curb emissions of CO2. In the New Policies Scenario, fossil fuels — mainly coal and natural gas — remain dominant, but their share of total generation drops from 68% in 2008 to 55% in 2035, as nuclear and renewable sources expand. The shift to low-carbon technologies is particularly marked in the OECD. Globally, coal remains the leading source of electricity generation in 2035, although its share of electricity generation declines from 41% now to 32%.” – IEA Analysis WEO 2010.

4. What does it mean?

5. Period Atmospheric Concentration CO2 Methane NOx Before 1800 AD 280 PPM 750 PPB 270 PPB 1800 AD 300 PPM 775 PPB 280 PPB 2000 AD 380 PPM 1650 PPB 310 PPB Increase in GHGs • Even if CO2 emissions are stabilized at present levels, its atmospheric concentrations will reach 500 PPM by the end of 21st century • If methane emissions are held constant at current levels, its atmospheric would stabilize at 1900 ppb (11% higher than present levels) in less than 50 years.

6. What does it mean?

7. With 5-6°C warming - which is a real possibility for the next century - existing models that include the risk of abrupt and large-scale climate change estimate an average 5-10% loss in global GDP, with poor countries suffering costs in excess of 10% of GDP.

8. Global responses- International Policy & Market Evolution UN Framework Rio Treaty Non-binding targets 1990 levels by 2000 Berlin Mandate Further reductions needed JI Pilot Phase Kyoto Protocol Binding Targets , Emissions Trading + CDM The Hague Collapse Negotiation suspended on KP rules Marrakesh Accords KP rules agreed Kyoto Period National trading & compliance programs in place 05-07 00 04 08-12 94 96 98 04 92 02 Bush Administration US withdraws from KP JI Pilot Phase No formal crediting; testing market solutions EU ETS Phase I Targets on Major Industrials in EU 15 + Accession Countries EU ETS Phase II More sectors + 6 gasses, links to Kyoto Parties Danes Open CO2 Market Power sector UK Open CO2 Market All industrials

9. Relevance of CCS

10. Without CCS cost will go up by 70%

11. Relevance of CCS- Quantitative terms

12. Relevance of CCS- Supply potential The ultimate objective of that Convention is the “stabilization of greenhouse gas concentrations in the atmosphere at a level that prevents dangerous anthropogenic interference with the climate system”. From this perspective, the context for considering CCS (and other mitigation options) is that of a world constrained in CO2 emissions, consistent with the international goal of stabilizing atmospheric greenhouse gas concentrations. With respect to the period up to 2020 and taking into account natural gas processing, the cement sector and the power sector the technical potential of CCS is of 1.45 GtCO2. A portfolio of other candidates CDM abatement options suggested that around 3.7 GtCO2 abatement potential is available in these sectors in 2020 (i.e. CCS constitutes 28% of the total potential supply of abatement options to 2020). For 2020, the analysis suggests, assuming an annual demand of 2,100 MCERs in 2020, that CCS would be deployed under the CDM, with total levels in the range 117‐314 MtCO2 per year. This would represent between 6‐9 percent of total CER supply..

13. Why CCS is necessary The only technology available to mitigate greenhouse gas (GHG) emissions from large-scale fossil fuel usage is CO2 capture and storage (CCS). The ETP scenarios demonstrate that CCS will need to contribute nearly one-fifth of the necessary emissions reductions to reduce global GHG emissions by 50% by 2050 at a reasonable cost. CCS is therefore essential to the achievement of deep emission cuts.

14. Electricity Sector will be in focus as far as CCS is concerned

15. Typical CCS Options • CCS through Amine route • CCS through Separation route • CCS through natural absorption of CO2 in brine solution – Kenya example • CCS through natural absorption of CO2 in brine solution – Australian example • CCS through molten sodium ( Doosan R&D) • CCS through enhance afforestation (enhancing green cover) • CCS through algae and bio capturing

16. Typical CCS process- 1) CO2 Capture in Electricity and Heat Generation

17. CO2 Capture Toolbox: Current and Future Technologies

18. Commercial CO2 scrubbing solvent

19. Power Plants: Cost with CO2 Capture

20. Expected Trends of Chemical Absorption Capture Process Performance

21. Net Efficiencies of Fossil-Fuelled Power Plants

22. 2010 Coal-Fired Power Plant Investment Costs

23. Pre Combustion technolgy

24. Maturity of Pre Combustion technology components

25. Oxy fuel combustion

26. Cost of CO2 transfer

27. Storage of CO2

28. Techno economic feasibility of storage capacity

29. Global Potential and status of CCS plants

30. Global Electricity Production by Fuel and Scenario, 2005, 2030 and2050: Baseline, ACT Map and BLUE Map Scenarios

31. Global Electricity Production by Fuel and Scenario, 2005, 2030 and2050: Baseline, ACT Map and BLUE Map Scenarios

32. Timeline expected for implementation

33. Regional Distribution of proposed CCS projects

34. India India is the world’s third-largest coal user. Coal accounts for 62% of the country’s energy supply Use of coal is expected to grow rapidly (IEA, 2007). Nearly 75% of the coal produced in India is used in electricity generation, the remainder being used in the steel, cement, and fertiliser industries. Given the abundance of coal in India, combined with rapidly growing energy demand, the government of India is backing an initiative to develop up to 9 Ultra-Mega Power Projects. This will add approximately 36 GW of installed coal-fi red capacity, offering important opportunities to test CCS. India’s current annual CO2 emissions amount to over 1 300 Mt, about half of which is from large point sources that are suitable for CO2 capture. The 25 largest emitters contributed around 36% of total National CO2 emissions in 2000, indicating the potential existence of a number of important CCS opportunities (IEA GHG, 2008).

35. Estimates of geological storage potential in India are in the range of 500 to 1 000 Gt CO2, including onshore and offshore deep saline formations (300-400 Gt), basalt formation traps (200-400 Gt), unmineable coal seams (5 Gt), and depleted oil and gas reservoirs (5-10 Gt) (Singh, et al., 2006). A recent assessment of coal-mining operations in India gives a theoretical CO2 storage potential in deep coal seams of 345 Mt (see Table 6.5). However, none of the fields has the ability to store more than 100 Mt. CO2 storage in deep coal seams is still in the demonstration phase (IEA GHG, 2008).

36. CO2 Storage Capacity of Indian Coal Mines

37. CO2 Storage Capacity of India Analysis of oil and gas fields around India shows that relatively few fields have the potential to store the lifetime emissions from even a medium-sized coal-fi red power plant. However, recently discovered offshore fields could provide opportunities in the future. The potential for CO2-EOR needs to be further analysed on a basin-by-basin basis. It is not possible to develop a suitable estimate today (IEA GHG, 2008). Deccan Volcanic Province, a basalt rock region in the northwest of India, is one of the largest potential areas for CO2 storage. The total area is 500 000 km2 with a total volume of 550 000 km3 with up to 20 different fl ow units. It reaches 2 000 m below ground on the western fl ank. Storage capacity is around 300 Gt CO2 (Sonde, 2006). Thick sedimentary rocks (up to 4 000 m) exist below the basalt trap. In order to model the long-term fate of CO2 injection in such mineral systems, geochemical and geo-mechanical modelling of interaction between fluids and rocks is required.

38. CO2 Storage Capacity of India There is considerable potential for CO2 storage in deep saline aquifers, particularly at the coast and on the margins of the Indian peninsula, and in Gujarat and Rajasthan (see Figure 6.9). Aquifer storage potential has also been demonstrated around Assam, although these reservoirs are 750-1 000 km from the nearest large point sources. The Indo-Gangetic area is an important potential storage site (Friedmann, 2006). The Ganga Eocene-Miocene Murree-Siwalik formations have good storage potential as deep saline formations, but high salinity and depth preclude economic use. The Ganga area has a basin area of 186 000 km2, with a large thickness of caprock composed of low permeability clay and siltstone (Bhandar, et al., 2007). The proximity of sources to the potential storage site makes it a good candidate for a pilot project.

39. Point Sources of CO2, Storage Basins and Oil and Gas Fields on the Indian Subcontinent

40. Financial Aspects Given appropriate emission reduction incentives, CCS offers a viable and competitive route to mitigate CO2 emissions. In a scenario that aims at emissions stabilisation based on options with costs up to USD 50/t CO2 (ACT Map1), 5.1 Gigatonnes (Gt) per year of CO2 would be captured and stored by 2050, which is 14% of the total needed for global temperature stabilisation. In the ETP BLUE Map scenario, which cuts global CO2 emissions in half and which considers emission abatement options with a cost of up to USD 200/t CO2, CCS accounts for 19% of total emissions reductions in 2050. In this scenario, 10.4 Gt of CO2 per year would be captured and stored in 2050. Without CCS, the annual cost for emissions halving in 2050 is USD 1.28 trillion per year higher than in the BLUE Map scenario. This is an increase of about 71%. About half of all CCS would be in power generation and half would be in industrial processes (cement, iron and steel and chemicals) and the fuel transformation sector. Overall, on the basis of current economics, the financial consequences of CCS range from a potential benefi t of USD 50/t CO2 mitigated (through the use of CO2 for enhanced oil recovery) to a potential cost of USD 100/t CO2 mitigated. CO2 capture leads to an increase in capital and operating expenses, combined with a decrease in plant energy efficiency. In terms of cost per tonne of CO2 captured, costs are USD 40-55/t for coal-fi red plants, and USD 50-90 for gas-fi red plants. In terms of cost per tonne of CO2 abated, the figures for coal-fi red plants in 2010 are around USD 60-75, dropping to USD 50-65/t CO2 in 2030; and for gas-fi red plants, USD 60-110 in 2010, dropping to USD 55-90 in 2030. CO2 Transport

41. Options for financing CCS

42. Options for financing CCS

43. CCS VALUE CHAIN • Source This refers to activities which must occur at the source (e.g. power plant) from which CO2 will be captured, before the capture technology is installed. • Capture The process through which CO2 is separated (or “captured”) from flue gasses, being emitted from the “source”. • Transport The transportation of CO2 from the “source”/capture site, via pipeline, to the off-takers. • Usage & storage The use of CO2 for purposes such as EOR; and the eventual permanent storage of CO2 underground

44. PROJECT LIFE CYCLE

45. POLICY ISSUES

46. Stages of CCS development

47. Roadmap to achieve objectives Increased support for the research and development (R&D) of energy technologies that face technical challenges and need to reduce costs before they become commercially viable. Demonstration programmesfor energy technologies that need to prove they can work on a commercial scale under relevant operating conditions. Deployment programmesfor energy technologies that are not yet cost-competitive, but whose costs could be reduced through learning-by-doing. These programmes would be expected to be phased out as individual technologies become cost-competitive.

48. Roadmap to achieve objectives CO2 reduction incentives to encourage the adoption of low-carbon technologies. Such incentives could take the form of regulation, pricing incentives, tax breaks, voluntary programmes, subsidies or trading schemes. The ACT scenarios assume that policies and measures are put in place that would lead to the adoption of low-carbon technologies with a cost of up to USD 50/t CO2 saved from 2030 in all countries, including developing countries. In the BLUE scenarios the level of incentive is assumed to continue to rise from 2030 onwards, reaching a level of USD 200/t CO2 saved in 2040 and beyond. Policy instruments to overcome other commercialisation barriers that are not primarily economic. These include enabling standards and other regulations, labelling schemes, information campaigns and energy auditing. These measures can play an important role in increasing the uptake of energy-efficient technologies in the building and transport sectors, as well as in non-energy intensive industry sectors where energy costs are low compared to other production costs.

49. THE CCS NETWORK – ABU DHABI • National Carbon Capture & Storage network • CO2 capture from existing and future power & industrial sources • Transportation pipelines • Injection in oil reservoirs for EOR • Target a significant cut to Abu Dhabi’s carbon footprint: 20-30 million Tons (1.5 billion scf/d) by 2030 • Promote clean fossil fuel power and industry • Build an early model of large scale commercial stage application • Assume global leadership and drive carbon capture technological progress

50. CCS PROJECT – PHASE I • Operation in phases by Q1, 2013 and Q1, 2015 • Capture 5 million Tons/ year - Largest development in the world • Engineering and design in progress • 4 Carbon Capture facilities covering wide range of applications: Power Generation: Pre-combustion, GTs, Boilers; as well as industry (Steel). • Highly advanced CO2 pipeline network with excess capacity to cater for growth until 2030.