CCS sector development in the UK

Getting ready for Phase 2 and Phase 3

27th March 2015

Emrah Durusut emrah.durusut@element-energy.co.uk

Element Energy Limited www.element-energy.co.uk

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Energy technologies modelling

Consumers behaviour modelling

Strategic market analysis

Energy networks modelling

Commercialisation strategies

Advanced geographic modelling

Techno-economic studies

Policy recommendations

Project management

Project financing

Element Energy is a specialist energy consultancy, with an excellent reputation for rigorous and insightful analysis across a wide range of low carbon energy sectors

These include: Carbon capture and storage, energy systems, energy networks, renewable energy systems, the built environment, hydrogen and low carbon vehicles

We consult on both technical and strategic issues – we believe our technical and engineering understanding of the real-world challenges support our strategic work

About Element Energy – a consultancy focussed on the energy sector

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Element Energy-led CCS publications in the last two years: We provide insight and analysis across all parts of the CCS chain

Project Description Year Clients

CCS sector development scenarios

▪ Element Energy-led project to develop three realistic and deliverable CCS scenarios at scale in the UK by 2030 by considering the practical steps that are required

2015

Infrastructure in a low-carbon energy system to 2030

▪ Element Energy-led project on characterisation, cost and feasibility of transmission, distribution, CO2 transport and storage, and DSR infrastructures under a number of CCC decarbonisation scenarios to 2030

2014

Demonstrating CO2 capture in the industrial sectors by 2025

▪ Element Energy led a study for DECC and BIS, to identify the carbon capture opportunity in the UK energy intensive sectors by 2025 by reviewing the main technologies that could be deployed in the period to 2025, as well as the main barriers for uptake of industrial carbon capture

2014

CO2-EOR: Analysis of fiscal incentives

▪ Element Energy-led project to quantify the potential impacts of fiscal incentives for CO2-EOR in the UK Continental Shelf in detail, recognising the additional costs, complexities, uncertainties and longer-term liabilities faced by CCS projects involving CO2-EOR

2014

CCS hub study for Scotland

▪ Element Energy led a comprehensive project, which examined a wide range of CCS scenarios to develop blueprints and detailed business plans for how to deliver CCS at least cost, least risk, and with maximum flexibility

2014

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This talk draws on insights from the “CCS sector

development scenarios” project, which was

commissioned by the ETI, and delivered by Element

Energy and Pöyry with the help and collaboration of

DECC’s expert chair (Patrick Dixon), the CCSA (Luke

Warren) and the Crown Estate (Shabana Ahmad and

Ward Goldthorpe).

The summary report is available at:

http://www.eti.co.uk/carbon-capture-and-storage-building-

the-uk-carbon-capture-and-storage-sector-by-2030/

Background to material presented

DISCLAIMER - all material presented today represents the view of the author, not clients, partners

or stakeholders

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ETI’s analysis of the UK energy system points to the central importance of CCS in enabling the UK to meet its carbon budgets efficiently. Without CCS, the cost of reaching UK Climate Change targets will double from a minimum of around £30bn per year in 2050.

Apart from its role in power generation, CCS can capture industrial emissions at low cost; provide flexible low carbon energy for industry, transport and heat through gasification; and deliver high value negative emissions (in combination with bio-energy).

ETI ESME scenarios suggest that a cost-optimal 2050 energy system in the UK would require building a sector storing ca. 100 million tonnes of CO2 by 2050.

To reach this target requires the establishment of a CCS sector and associated infrastructure by 2030, storing ca. 50 million tonnes of CO2 with ~10 GW of power CCS and contribution from industrial sources.

This level of ambition is consistent with DECC’s EMR delivery Plan (which included up to 13 GW of CCS by 2030), and with the Committee on Climate Change’s (CCC) power sector scenarios reaching 50gCO2/kWh by 2030.

CCS sector development scenarios: Project background

Source: The Energy Technologies Institute’s (ETI) modelling of the UK energy system

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Three CCS sector development scenarios

CCS

growth

Implement Wood’s recommendations

to coordinate UKCS oil production and

increase commercial attractiveness.

High CO2-EOR policy support (e.g. tax

incentives)

CO2 has a value due to the demand

from the CO2-EOR projects in the CNS

“CO2-EOR”

“Balanced” “Concentrated”

Push “on all fronts”

to win support from

diverse stakeholders

A variety of regional

source clusters

Multiple fuel sources

and capture

technologies

Geographic

concentration

around the two

competition projects

to reduce T&S costs

and barriers.

Dominant role for

SNS storage and

gas CCS

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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“Concentrated” scenario: Transport and storage network development

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

2025 2020/2021 2030

1 Mt 5 Mt 11 Mt

2 Mt 8 Mt 29 Mt

Shoreline terminals Storage only EOR fields New offshore pipelines New onshore pipelines Re-use offshore pipelines Re-use onshore pipelines

Goldeneye

5/42 aquifer

Captain aquifer (2022) Feeder 10

Goldeneye pipeline

SNS aquifer 2

CNS aquifer 2

Potential EOR development

New over-sized trunk pipeline

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Comparison of the scenarios: Transport and storage network development

Shoreline terminals Storage only EOR fields New offshore pipelines New onshore pipelines Re-use offshore pipelines Re-use onshore pipelines

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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Comparison of the scenarios: CCS cost reduction

Concentrated scenario CO2-EOR scenario

Balanced scenario All scenarios achieve significant cost reductions

with CCS costs less than £100/MWh by 2030 - scale of cost reductions vary by technology and scenario

All scenarios are affordable in terms of the demand on levy control framework funds (i.e. £1.1 to £1.3 billion by 2025 and £2 to £3 billion by 2030)

10 GW scale power CCS sector with a number of industrial CCS projects storing ca. 50 Mt/yr by 2030 can be delivered by creating a supportive policy environment with early action on critical issues

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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Timelines for capture and storage deployment in the Concentrated scenario

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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Key requirements for CCS sector development in the UK: 1) Timely implementation of both CCS Commercialisation Programme projects

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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Key requirements for CCS sector development in the UK: 2) Early investment in physical appraisal to expand the promising 5/42 and Captain aquifer stores and appraise further sites

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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Key requirements for CCS sector development in the UK: 3) Enable early investment decisions by phase 2 projects by awarding a further 3 appropriately designed CfDs by 2020

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

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Key requirements for CCS sector development in the UK: 4) Stimulate a robust project development pipeline by delivering clear signals to project developers about the scale and strength of policy commitment to developing CCS

Source: Element Energy and Poyry for the Energy Technologies Institute, CCS sector development scenarios, The summary report is

available at: http://www.eti.co.uk/carbon-capture-and-storage-building-the-uk-carbon-capture-and-storage-sector-by-2030/

Thank you for your attention

If you have questions, please contact:

Emrah Durusut emrah.durusut@element-energy.co.uk

Element Energy Limited www.element-energy.co.uk