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1 Conference 2015 #SCCSconf15 Download your App: h3ps://crowd.cc/s/8f8u Or Visit: h3ps://crowd.cc/sccsconf15 Event Code: ccspath Media partner:

2 From Clusters to Systems: Building a European CCS Sector Andrew Green Programme Manager CCS SCCS Annual Conference 28 th October Energy Technologies Institute LLP The information in this document is the property of Energy Technologies Institute LLP and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Energy Technologies Institute LLP This information Energy is given Technologies in good faith based Institute upon the latest LLP information - Subject available to notes to Energy on Technologies page 1 Institute LLP, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Energy Technologies Institute LLP or any of its subsidiary or associated companies.

3 Contents Refresher value of CCS in the Energy System A European CCS system What might it look like? How might we get there? Benefits of clustering Phasing of clustering How to make a start Conclusions

4 Deploying CCS cuts cost of meeting UK carbon targets by billions Cost Savings bn (ESME v3.1) Net saving ~ 13bn Net saving ~ 20bn Net saving ~ 32bn Transport Fuel / resources Power & conversion Infrastructure Industry Buildings & heat Fuel costs are higher, but there is less need for expensive low carbon vehicles, building retrofits, (intermittent) generation capacity & transmission infrastructure resulting in net savings which grow over time.

5 The Value of CCS ETI energy system modelling points to energy system-wide value of CCS extending beyond low carbon electricity generation Low carbon electricity from fossil fuels CCS with biomass Gasification applications CCS on industrial emissions Negative emissions Flexible low carbon fuels (hydrogen, syngas) Enables continued use of fossil fuels where very expensive to replace Low carbon energy diversity, portfolio of flexible low carbon energy vectors, option value & robustness in meeting carbon targets

6 Developing a cluster From: ZEP Executable CCS Plan in Europe

7 UK scenarios for CCS for 2030 Shoreline terminals Storage only EOR fields New offshore pipelines New onshore pipelines Re- use offshore pipelines Re- use onshore pipelines

8 One European Scenario Courtesy SCCS

9 Benefits of Clustering Substantial costs savings driven by: Sharing of infrastructure Learning by doing improved engineering and project delivery Reduced investor risk = reduced cost of capital Improved flexibility of the transport & storage system improved ability to absorb variability in CO 2 supply Multiple stores/injection sites reduce risk of failure

10 Build out of the Concentrated Scenario

11 Making a start: the Anchor Project Each cluster must start with an Anchor Project Key features of the Anchor Project : Must have sufficient scale: minimum 1 Mtpa (= one injection well), ideally 2 3 Mtpa Commercially secure supply of CO 2 for transport & storage Justify investment in T&S Maintain supply to avoid/minimise shut down of storage Compatible and secure timescales for investment in capture, transport and storage Clear and simple risk allocation along the chain Even meeting the above requirements, the Anchor Project will still be expensive Will need funding mechanism for operating costs Pre-investment in storage appraisal New clusters in the future may still need capital support

12 What does this mean? Anchor Projects are most likely to be base load power projects, with as simple as possible commercial and operational structure i.e. capture transport storage Possibly large-scale hydrogen projects in the future Anchor Projects open up other commercial and CO 2 abatement opportunities Further, low risk power projects with competitive CFDs (< 100/MWhr) EOR projects dependent on oil price Industrial CCS at relatively low cost Industrial subclusters

13 Conclusions CCS is a critical tool in cost-effectively decarbonising the UK and European energy systems The value of CCS comes form its ability to address power and industry, as well as achieving negative emissions (with biomass) and enabling low carbon gases To achieve roll out in the most cost effective way will involve the development of key clusters and ultimately linking these into a comprehensive CO 2 transport and storage system Anchor projects are critical to establish CCS clusters these will most likely be large scale power capture storage projects We need to maintain pressure on developing other opportunities but not let them divert focus from the establishment of Anchor Projects

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