1

Douglas Spalding

Carbon Capture and StorageAn Industry Perspective

Content

•Energy Policy, and the Market•Carbon Abatement Technologies

- Track 1 –‘Efficiency’Improvements- Track 2 –Carbon Capture and Storage

•Conclusions

2

UK Perspective –CO2 Reductions from 1990

• Kyoto target = -12.5%(2008-12)

• Current Status = -4.4%(2005)

• EU ETS Phase I NAP = -11.75%, (Install’ns only)(2005-07)

• EU ETS Phase II NAP = -???%, (GHGs)(2008-12)

• National Goal = -20%(2010)

• Energy White Paper 68 = -60%National Goal (2050)

278

111

245

266

MtCO2

20122005 20501990 2020

BAU

-12.5%-20%

-60%

UK 05 NAP = 736MtCO2for ETS 05-07 =11.75%

(below 1990 levels)

Energy policy- 2005 reality check

•Renewables targets not being met•Renewables Obligation working but proving to be

expensive•UK heading for 80% gas, 80% imported, many other

countries increasing their reliance on gas•Oil and Gas prices increasing•CO2 emissions will go up if more nuclear closes and

replaced by gas•Emerging economies’emissions increasing faster than

the West can make reductions•Strategy for Carbon Abatement Technologies (CAT) for

Fossil Fuels announced

3

•1980 - Total generation 265TWh

•2003 - Total generation 379TWh

•2020 - Gas to make up 80% of generation

The Emphasis is Changing - ElectricityGeneration in the UK

1980

Others3%

Nuclear12%

Gas1%

Oil13%

Coal71%

2003

Gas39%

Others2%

Coal36%

Oil1%

Nuclear22%

Market Impact

• Operation dependent upon marketconditions

• Dispatch driven by power, gas, coal andcarbon prices

• Coal is cheap, Gas to remain expensive,carbon on the rise

• Policy and higher oil/gas/carbon pricesprofoundly affecting new plantdecisions

Rising gas andcarbon prices

4

The UK CO2 Future –The PowerIndustry Perspective

0%

10%

20%

30%

40%

50%

60%

70%

80%

Cottam Didcot A Drax F'Bridge Longannet Ratcliffe

Ave

rageLoad

Fac

tor

2003 Load Factor Load Factor to Cap

•UK coal plant need 33% CO2 reductions now throughreducing generation, trading or carbon abatement

•High gas price and security of supply concerns drivingneed for clean coal and CCS technologies

•CCS captures more CO2 on coal v gas power plant•Capture Ready Demo plant targeted for 2010

EOR in the North Sea

• North Sea oil recovery rate is rapidly reducing, withsignificant quantities of oil remaining in the ground.

• EOR will enable additional oil to be recovered,• Uncertainties to resolve :

- Legal issues (OSPAR and London Convention)- Cost of CO2 at the rig,- Technical issues concerning offshore EOR (single point

drilling), age of rigs, modifications needed- Overall economic viability (value of additional oil recovered

and CO2 sequestered)• Benefits great,

- 1 TCO2 yields up to 3 additional BOe- Worth $200/TCO2 in today’s oil market- CO2 injection extends asset lives further- Significant storage possible

5

North Sea Oil - CO2 EOR Opportunity isNOW

Permian Basin Example

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North Sea v’s Permian BasinSame scale and Volume !

CO2 capture and storage –costestimates

•Timing of transport and storageimportant to UKCS production

•For cost - capture more criticalSource: Vattenfall

7

Content

•Energy Policy, and the Market•Carbon Abatement Technologies

- Track 1 –‘Efficiency’Improvements- Track 2 –Carbon Capture and Storage

•Conclusions

Twin Track Approach to Carbon Abatement

Source: IAEA

PossibleNow

Long TimeMedium

2010 2020

CarbonDioxide

Reduction

IncreasedEfficiencyTrack 1

CCSTrack 2

-

term

-

term

-25%

Baseline

- 35%

- 95%

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Track 1 Carbon Abatement Options - CleanCoal Technology Plant (New)

Coal offers the greatest abatement and capturepotential,

• Advanced SupercriticalPulverised Coal Boiler/Steam Turbine400-1000MW

• Integrated GasificationCombined Cycle500MW+

Track 1 - Clean Coal TechnologiesAdvanced Supercritical Plant

• Technology of choice for vastmajority of new build orders

• Best Available Technologynow 46-47% efficient

• Proven Advantages,- Availability (>95%),- Flexibility (20-100%) and- Fuel Range (inc Biomass co-firing up to 20%)

• Continuous evolutionary development• Matches IGCC for emissions, easily meets LCPD limits• Can be fitted with economical CO2 capture

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Track 1 - Clean Coal Technologies, IGCC

• New technology attractive because of,- Potential for low emissions and- Hydrogen generation and CO2 capture

• Currently, 4 large units in operation on coal and3 further orders for DOE supporteddemonstration plant in the US

• Challenges are,- Poor overall availability (60-75%),- High cost (+25%),- Lack of fuel flexibility,- Limited acceptance by the market

• Latest designs aim to improveavailability = Lower efficiency(eg Hatfield 41%)

Track 1 - Phased Approach to CO2

Reduction by Retrofit

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Track 1 - Sub-critical to Supercritical BoilerRetrofit•Replacement

of boilerpressureparts,withinboilerhouseenvelope

•Lighter boilerweight

•Re use ofbulk ofancillaryequipment

•Turbinemodifications

Subcritical Supercritical

Track 1: CO2 Abatement by Biomass Co-firing

•Biomass is CO2-neutral and qualifies as a renewable fuel

•Typically, 5%-7% can be co-fired in existing coal-fired plant(blended with coal)

•Up to 20% can be co-fired by direct injection (separateinjectors/burners)

•50% more MW and CO2 displaced by Co-firing in advancedsupercritical plant than on a small biomass plant

•UK restrictions on co-firing should be lifted

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Track 1 Feedwater Heating Improvements

• Up to 20% of the heat input is usedfor feedwater heating

• CO2 reductions can be achieved by,- Biomass fired feedwater heater

or

Boiler

SteamTurbine

Coal

660MWeCO2

Biomass

ExistingFeed Heater

GT X 3

174 MWe

Gas

CO2

New Feed Heater

ExistingFeed Heater

- Partial gas re-powering with a GTfeedwater heater

• CO2 reductions up to 20% possible• Technology selection dependent upon, fuel/space availability, ease of

integration/control

Track 2 - CO2 Capture and Storage

• Separate CO2 at power plant• Disposal sub-surface• Future-proofed plant = ability to add CCS later• Capture cost offset by CO2

credits and value of EOR• Cost of electricity competitive

with renewables• Potential CO2 separation

capture technologies- Post-combustion

amine scrubbing- Pre-combustion

separation/oxy-fuel firing- Membrane Separation

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Track 2 - Capture ReadyPost-combustion Amine Scrubbing

Future Retrofit:

Coal & AshHandling

Boiler Island FGD

Steam Turbine Island

DeNOxPlant

Air

Coal

Flyash

Bottom Ash

FeedWater

HPSteam

IPSteam

ColdR/H

FlueGas

Sea Water

Sea Water

Limestone Water

Gypsum Effluent

CO2 ReboilerSteam Extraction

ESP

Flue GasSOx lowNOx low

CO2 Scrubber CO2

Compression

•Space allocated for Capture Equipment

Track 2 –Pre-Combustion Capture andOxyfuel firing

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Budget Cost/Programme

•Budget Cost of retrofit…..600MWe plant- £116m for Supercritical Retrofit

•Overall programme 24 months(12 month outage period)

•+£10m for Enhanced Bio-mass Co-firing•+ up to £70m for Feedwater Heating Improvements

•Equivalent New Build Cost (Supercritical only)- £375m- Overall programme 40 months

Relative Economics for PulverisedCoal versus IGCC

38 - 42%

1335 $/kW

1681 $/kW

NewIGCC

43%

600 $/kW

1190 $/kW

AdvancedSupercritical

Retrofitincl FGD, SCR

Efficiency

Capital Cost

No capture

With capture42%

2000 $/kW

2300 $/kW

ExistingIGCC

(ELCOGAS)

46%

1125 $/kW

1400 $/kW

NewAdvanced

Supercriticalincl FGD, SCR

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Comparison of Alternatives for CarbonDioxide Abatement

£40-£62/tCO2

5.51 –7.72p/kWh(25% capacity factor,

20 year life)

£175M (onshore) to£216M (offshore)

475,000 tCO2/yr(25% capacity factor)

234 MWe installed WindTurbines

£20/tCO2£12/tCO2

Cost of Carbon DioxideAbated (versus 36% efficientcoal)

3.25p/kWh(80% load factor,

25 year life)

1.8p/kWh(60% load factor,15 year write off)

Cost of Electricity

£439M£116MCapital Cost

3.6M tCO2/yr(90% reduction80% load factor)

471,000 tCO2/yr(17% reduction,60% load factor)

CO2 savings versus36% efficient coal

600 MWe retrofittedwith ASR only and

Carbon DioxideCapture

600 MWe retrofittedwith Advanced

Supercritical Retrofit(ASR)

Advanced Supercritical Retrofit withCO2 Capture - status

• Design study on Advanced Supercritical Retrofit completed for ScottishPower- No technical showstoppers

• Several overseas study contracts (IEA, Canada Clean PowerCoalition…)

• New DTI contract “TechnoEconomic studies on AdvancedSupercritical Retrofit with Carbon Capture”- Mitsui Babcock, Alstom, EonUK, Air Products, Fluor, Imperial College, Drax

Power, EDF Energy, Scottish and Southern

- Will demonstrate how to make ASC Retrofits “capture ready”

• Will be a strong candidate for DTI CAT Strategy Demonstration funding

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Conclusions

•A sustainable UK CO2 future requires ‘Joined-up-thinking’between the Power & Oil Industry andGovernment

•UKCS Production in decline now•Large investments in Enhanced Oil Recovery (Brent

Enhanced Voidage, Magnus EOR)•CCS technologies available now for EOR•Government CAT Strategy will deliver a CCS

demonstration by 2010•At $60/BOe can more be done?

Thank Youwww.mitsuibabcock.com

dspalding@mitsuibabcock.com

+44 (0) 141 886 4141