CONTENTS. Promising storage capacity estimates. Expansion of coal in the next 30 years. The economic potential of CCS in Vietnam.

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1 CCS DEPLOYMENT POTENTIAL IN VIETNAM S POWER SECTOR Presented by: Nhan T. Nguyen With contribution from Minh Ha-Duong and Anh T.H. Nguyen Centre International de Recherche sur l Environnement et le Développement (CIRED)

2 CONTENTS 1 Promising storage capacity estimates 2 Expansion of coal in the next 30 years 3 The economic potential of CCS in Vietnam 4 Discussion 2

3 PART 1. PROMISING STORAGE CAPACITY ESTIMATES Enhanced Oil Recovery (EOR): the river basin area of Cuu Long. Injection of carbon emissions into the oil: the river basin areas of Cuu Long and Song Hong, the North end Enhanced Coal Bed Methane Recovery (ECBM): Quang Ninh coal basin The reservoir of Utsira in the northern coastal area: capacity to store approximately 20 to 60 Gt of CO 2 emissions Figure: 5 major basins in Vietnam identified for storage opportunities 3

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5 EOR-CCS PROPOSAL IN VIETNAM AT WHITE TIGER FIELD The first commercial CCS project in Asia White Tiger Field Project CO 2 capture from Natural Gas Combined Cycle (NGCC) plants, pipeline transport, and storage in offshore/onshore oil fields and enhanced oil recovery Potential emission reductions of approximately 7.7 million tco 2 per year, (recovery of an average of 50 thousand barrels of crude oil per day) Source: Bonijoly (2009); TKV (2009); The Central Intelligence Agency & Petro Vietnam (2008) 5

6 STUDY S METHOD AND APPROACH Supply-side Data Load curve & load demand Demand-side Data Emissions constraints IRP Model Fuels constraints Carbon values; Carbon/energy tax Optimal expansion plan Externality cost Price elasticity of demand Probabilistic estimation of system Structure of technologies & Fuels mix Total planning Cost Plant Emission Factors CO 2, SO 2 and NO x Emissions Electricity prices (LRAC &AIC) Source: Shrestha and Nguyen, 2003 The analytical flowchart of the IRP model 6

7 EXPANSION OF COAL IN THE NEXT 30 YEARS GW Coal based power capacity Others (Hydro, nuclear, oil, renewables...) Gas based power capacity Source: the IRP simulation results 7

8 BASELINE: POWER GENERATION, Cumulative costs b$ Total costs 108 Cumulative power generation, : 14,106 TWh Coal Gas 49% 19% Capital costs 29 Fixed O&M costs 16 Variable O&M and fuel costs 63 Electricity costs $cent/kwh LRAC 4.32 AIC 4.59 Others 32% Source: the IRP simulation results 8

9 BASELINE: CO2 EMISSIONS FROM GENERATION Cumulative emissions ( ) CO2 SO2 NOx 7.2 Gt 15.3 Mt 8.0 Mt Annual CO2 emission from power sector (million ton) Source: the IRP simulation results 9

10 PART 3: THE ECONOMIC POTENTIAL OF CCS IN VIETNAM Integrating CCS into the IRP model Power generation plants with more than 2.5 Mton of CO2 emissions per year opportunity to be selected for carbon capture and storage deployment Costs of capture based power plants Sub PC- Sub PC- Super PC- Super PC- IGCC- NGCC- CCS CCS ready CCS CCS ready CCS CCS Reference plant TCR (US$/kW) Capture plant TCR (US$/kW) Cost of CO2captured (US$/tCO2) Cost of CO2 avoided (US$/tCO2) Reference plant TCR (US$/kW) Capture plant TCR (US$/kW) Cost of CO2 captured (US$/tCO2) Cost of CO2 avoided (US$/tCO2) Source: the IRP simulation results 10

11 BASELINE: CAPACITY EXPANSION (MW) Plant types Total 23,079 54, ,950 Conventional coal-fired plants 4,580 9,970 65,500 CFB-based-coal-fired plants Supercritical coal-fired plants ,000 IGCC based-coal-fired plants NGCC based-gas-fired plants 6,952 10,882 16,582 Conventional gas-fired plants Conventional oil-fired plants Large/medium hydro plants 8,545 16,761 16,761 Small hydro plants Hydro Pump storage 0 2,400 10,200 Biomass-fired plants Geothermal plants Wind farms Solar grid-connected plants Nuclear plants 0 1,000 10,000 Imported capacity 550 5, ,784

12 CARBON PRICES SCENARIOS US$/tCO Low (LCV) 5 20 Moderate (MCV) 5 35 High (HCV)

13 RESULTS: THE ECONOMIC POTENTIAL Item Units selected Earliest year Capacity CO 2 savings by CCS (unit) dispatched (GW) (Mt) CCS-MCV scenario: (35$/tCO2 in 2040) NGCC-CCS PC-CCS ready PC-CCS retrofit CCS-HCV scenario: (50$/tCO2 in 2040) NGCC-CCS PC-CCS ready No CCS plants selected in Low Carbon Value scenario (LCV) Source: the IRP simulation results 13

14 SENSITIVITY ANALYSIS Units selected Earliest year dispatched Capacity (GW) CO2 emissions savings by CCS (Mt) CCS-MCV scenario Total % increase in capital cost Total % increase in transport and storage cost Total A decrease in efficiency of plants Total Source: the IRP simulation results 14

15 PART 4. DISCUSSION Getting to 20% abatement in the power sector: CCS- ACT: carbon price 40 US$/tCO 2 in 2030, 60 US$/tCO 2 in 2040 Units Earliest year Capacity CO2 emissions Total planning cost selected dispatched (GW) savings by (billion US$) CCS (Mt) CCS-MCV CCS-HCV CCS-ACT , Source: the IRP simulation results 15

16 RENEWABLES CHEAPER THAN CCS WITHOUT EOR/ECBM Abatement cost with CCS : US$/tCO 2. Energy efficiency, conservation, renewables: 10 US$/tCO 2 EOR + CCS : net benefits of US$/tCO2 (based on data and oil prices before 2003) Only with EOR/ECBM, CCS could be as cost-effective as renewables Source: the IRP simulation results, Nguyen and Ha-Duong (2010), IPCC (2005) 16

17 INTERNATIONAL AND DOMESTIC REQUIREMENTS Cooperation and collaboration participating in various regional and international forums and projects relating to CCS around the globe. further detailed evaluation (cost and performance of various storage basins, CO 2 transport system in conjunction with the existing and future CO 2 emissions sources) Incentives: government funding for research development and technology demonstration early deployment incentives to economic instrument such as taxation incentives. Regulation and power sector reform the sector s current regulation the international legislation for the CCS issue 17

18 CONCLUDING REMARKS CCS: key abatement option in Vietnam s power sector CCS not in optimal plans if carbon price below 25 US$/tCO 2 by 2030 CCS without EOR/ECBM not cheaper than renewables Need for new policy Report available at: 18