Carbon Capture and Storage: A Technology at a Crossroads

Howard Herzog / MIT Energy Initiative

Carbon Capture and Storage (CCS):

A Technology at a Crossroads

University of Chicago

November 18, 2015

Outline

• CCS Basics

• The Crossroads

• Technology Status

• Demonstration Status

• Negative Emissions

• Outlook



CCS Basics


What is CCS?

Carbon dioxide (CO2) capture and storage (CCS) is a process consisting of separation of CO2 from industrial and energy-related sources, transport to a storage location, and long-term isolation from the atmosphere.

Intergovernmental Panel on Climate Change (IPCC)

Special Report on Carbon Dioxide Capture and Storage

CCS

Sources and Sinks

• Large Stationary Point Sources Power – Coal, Biomass, Natural Gas

Industrial –» High Purity - Gas Processing, Ammonia, Ethanol, Hydrogen

(Refineries)

» Other – Cement, Steel, Refineries

• Sinks Geologic Formations

» Proven - Depleted Oil & Gas Reservoirs, Deep Saline Formations

» Speculative – Unmineable Coal Seams, Basalts

Utilization» Proven – EOR, Commercial Markets

» Speculative – Building materials, Chemicals, Fuels


Role of CCS in a Mitigation

Portfolio


IEA CCS Roadmap, 2013; consistent with World Energy Outlook 450 Scenario through 2035

Portfolio of CO2 Emissions Reductions for 2DS through 2050


FAQs

• Is CCS feasible?

Yes, all major components of a carbon capture and sequestration system are commercially available today.

• Why is CCS use limited today?

It is almost always cheaper to emit to the atmosphere than sequester. Therefore, opportunities are limited to niche areas until carbon policies are put in place.


The Crossroads

The Crossroads

• CCS Technology Development has made

great strides in the past 25 years

• The technology is ready for commercial

scale demonstration and deployment

• However, the necessary markets have not

developed due to lack of strong climate

policy


GHGT Participant Numbers


Inherent Strengths of CCS

• It produces dispatchable power, as opposed

to intermittent power from wind and solar.

• It is the only mitigation technology that can

rescue potentially hundreds of trillions of

dollars of stranded fossil assets.

• It provides the major pathway to negative

emissions when combined with biomass-

fired power plants.


FOSSIL FUEL ASSETS

AND CLIMATE CHANGE

0

2000

4000

6000

8000

10000

12000

14000

16000

Recoverable

Carbon Stocks

2014 (IPCC)

Recoverable

Reserves 2013

(BP)

2°C budget (2013-

2100)

3°C budget (2013-

2100)

Glo

bal

emis

sion

s [G

t C

O2]

Carbon Budget

Oil

Natural Gas

Coal

Stranded

Assets


Technology Status


Post-Combustion Capture

Gas Clean-up

Steam CycleElectricityBoilerCoal

Air

Flue Gas

Steam

CO2Capture

CO2

Stack Gas

Howard Herzog / MIT Energy InitiativeSource: ABB Lummus

Poteau, OK – 200 tpd

CO2 Capture at a Power Plant

Technology Status

• Post-combustion capture is most advancedcommercially Many improvements over past 15 years (e.g., solvent

technology)

• Pre-combustion, once thought the future, is struggling High capital costs, complexity

• Oxy-combustion, the least studied approach, is slowly moving forward Chemical Looping and Ionic Transport Membranes

could revolutionize this approach



Geologic Storage Status

• Commercial Analogues

Enhanced Oil Recovery (EOR) – since 1972

Acid Gas Injection – since 1989

Natural Gas Storage – since 1915

• Commercial Operations: 5 projects at megaton/yr scale

• Subsurface Uncertainty

Capacity

Long-term Integrity

Induced Siesmicity

• Other Issues

Regulatory Framework

Long-term Liability

Public Acceptance

Costs

• Carbon Price needed to incentivize CCS with geologic storage is $50-100/tCO2

Results in an increase in cost of electricity from 40-90%

Additional incentives required to overcome first-of-a-kind costs

• Cannot compete with business-as-usual. Must compete with large-scale renewables and nuclear



Demonstration Status

Major Demonstration Projects

• Phase 1 – Pioneer Projects (little/no gov’t

money)

Natural Gas Processing (4) – Sleipner (Statoil),

In Salah (BP), Snovit (Statoil), Gorgon

(Chevron)

Synfuels - Weyborn (Dakota Gasification),

EOR driven



Sleipner (North Sea, Norway)


• Phase 2 – CCS RD&D Programs

Power Plants

» Operating – Boundary Dam (Canada)

» Under Constuction – Kemper (US), Petra Nova (US)

» Planning – TCEP (US), White Rose (UK), Peterhead

(UK)

Industrial Facilities

» Operating - Air Products (US, Methane Reformer), ADM

(US, Ethanol), Quest (Canada, Methane Reformer)

» Under Construction –Alberta Trunk Line (Canada,

pipeline between refinery and fertilizer plants to EOR)



Role of EOR

• Phase 2 – CCS RD&D Programs

Power Plants

» Operating – Boundary Dam (Canada)

» Under Constuction – Kemper (US), Petra Nova (US)

» Planning – TCEP (US), White Rose (UK), Peterhead

(UK)

Industrial Facilities

» Operating - Air Products (US, Methane Reformer), ADM

(US, Ethanol), Quest (Canada, Methane Reformer)

» Under Construction –Alberta Trunk Line (Canada,

pipeline between refinery and fertilizer plants to EOR)


Boundary Dam

Worlds’s first CCS Power Plant


Paying for CCS Projects

• Market Pull Carbon markets (regulatory driver)

Electricity markets

EOR

Others (e.g., polygeneration)

• Technology Push Subsidies

Tax credits (investment, production)

Loan guarantees

Mandates (portfolio standards)

Others (e.g., Feed-in tariffs, contracts-for-differences)

• Other Drivers Regulatory

Business


Boundary Dam Economics

• Regulatory Driver

40-year old coal plants must be retrofitted with CCS or close down

• Electricity markets

If retrofit CCS is low-cost option (Had to be competitive with new NGCC)

• By-product sales (EOR, fly ash, H2SO4)

• Government cost-sharing ($240 million)

• Business Driver – Utility-owned lignite


0

20

40

60

80

100

120

140

160

BD Initial

CoE

Federal

Subsidy

CO2

Revenues

BD Final

CoE

Base Load

NGCC

Levelized

Co

st

of

Ele

ctr

icit

y [

$/M

Wh

]

CCS Capital Costs

Non-CCS Capital Costs

Fuel Costs

O&M Costs

Subsidies and Revenues

Net Costs

Null

BOUNDARY DAM

4 Reasons BD can compete with

NGCC:

1. Federal Subsidy

2. EOR (sulfuric acid and fly ash)

3. Low lignite costs compared to NG

4. Lower capital costs due to retrofit

•27

1

2

3

4

3

Source: Adapted from SaskPower


Negative Emissions:

BECCS and DAC

Intervention Strategies


Intervention Strategies

Atmospheric GHG

Concentrations

Human Activity

Earth Systems

Global Temperature

CO2

Removal

IPCC Working Group 3

Summary for Policy Makers

• April, 2014

• CCS mentioned 39 times

• Key points:

CCS reduces costs of meeting key stabilization

targets (i.e., 450 and 550 ppm)

Strong call by IPCC for negative emissions by

BECCS (bio-CCS)

Without CCS, certain targets cannot be met

(due in part to CCS role in negative emissions)


BECCS – Ampere Study

450 ppm case


BECCS

• Without CCS, there will be no BECCS

Issues with storage are identical

Cost of BECCS > CCS

» Biomass more expensive than coal

» Biomass-fired power plants more expensive than coal-

fired power plants due to lower conversion efficiencies

At high enough carbon price, BECCS<CCS


Impact of Carbon Price on

BECCS



Direct Air Capture (DAC):

Concentration Matters

• Concentration is a critical variable

• Concentration in air approximately 300 times more dilute than coal-fired flue gas – 12% (120,000 ppm) vs. 400 ppm

• Key challenges this poses for air capture: Have to handle 300 times more air

Mass transfer driving force is reduced by a factor of 300

• Any air capture process will perform significantly better and more cheaply on a feed stream at 12% CO2 vs. a feed stream at 400 ppm CO2


Sherwood Plot

King et al., Separation and Purification: Critical Needs and Opportunities, National Research Council report, National Academy Press,

Washington, DC (1987).


What is Correct Scale Factor?

• How does cost vary with concentration?

Sherwood Plot suggests a linear variation» Cost of air capture = 300 * cost of CCS

Physics suggests a logarithmic (based on ideal work)» Cost of air capture = 4 * cost of CCS

• Reconciling the 2 approaches

Real work = ideal work x efficiency

It can be shown from empirical data that the efficiency is a strong function of concentration

Result is closer to a linear variation

House Plot


Copyright Kurt Zenz House, draft for submission (in press) .


Outlook

Moving CCS Forward

• Need for CCS becomes more important as

climate policy becomes more stringent

• It appears climate policy will NOT reach

levels needed to incentivize large-scale CCS

deployment before 2030

• Therefore, technology policy is required for

CCS to keep moving forward


Incentivizing CCS in Near-Term

• US Clean Power Plan

30% investment tax credit (proposed)

$50/ton CO2 stored tax credit (proposed)

• UK Billion pound competition (2 projects)

Contract for differences

• Norway Direct subsidy for up to three demonstration projects:

cement, ammonia, waste-to-energy

• EU ETS

Resurrect the NER program????


Closing Thoughts

• Strong Climate Policy (carbon price of at least $50/tCO2). CCS has to be competitive with the other large-

scale, low-carbon supply technologies, specifically renewables and nuclear.

» Study after study has shown all of these low-carbon technologies are needed.

» Issue: Will policymakers create a level-playing field?

• Weak Climate Policy (situation for at least next decade). CCS requires technology push to move forward.

» Issue: Where will political support for CCS come from? Is CCS an orphan technology?



Contact Information

Howard Herzog

Senior Research Engineer

Massachusetts Institute of Technology (MIT)

Energy Initiative

Room E19-370L

Cambridge, MA 02139

Phone: 617-253-0688

E-mail: [email protected]

Web Site: sequestration.mit.edu

Carbon Capture and Storage: A Technology at a Crossroads

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