Cleaner Fossil Power Generation in the 21 st Century Moving Forward

Transcription

1 Cleaner Fossil Power Generation in the 21 st Century A technology strategy for carbon capture and storage UK Advanced Power Generation Technology Forum January 2014

2 Contact Further information on this report and the UK Advanced Power Generation Technology Forum (APGTF) can be obtained from: Philip Sharman APGTF Chairman January 2014 Preamble The UK Advanced Power Generation Technology Forum (APGTF) is an industry-led stakeholder group that provides a technology focus for the power generation sector in the UK on carbon abatement technologies for fossil fuels including CCS. The industrial members of the APGTF have included almost all of the key players in the development of CCS in the UK over the last 12 years, including Alstom, AMEC, BP, Costain, Doosan Babcock, E.ON, EDF Energy, Rolls-Royce, RWE npower, Scottish Power, Siemens and SSE. These organisations have invested heavily in research and development (R&D) and project development since the first APGTF Foresight Report published in Many agencies and associations interested in CCS are also represented on the APGTF, including the Energy Technologies Institute (ETI), the Technology Strategy Board (TSB), the Engineering & Physical Sciences Research Council (EPSRC), the UK CCS Research Centre (UKCCSRC), the Industrial & Power Association (IPA), the CCS Association (CCSA), the Confederation of UK Coal Producers (COALPRO), the Association of UK Coal Importers (CoalImp), the Health & Safety Laboratory (HSL), the Coal Research Forum (CRF) and other university groupings, and from the UK Government the Department of Energy & Climate Change (DECC), the Department of Business, Innovation & Skills (BIS) and UK Trade & Investment (UKTI). To aid the reader, the following explains the contents and purpose of each of the Chapters of the strategy: Chapter 1: Introduction Describes the current situation with respect to CCS in the UK and internationally. Chapter 2: Objectives of the Strategy Sets out the purpose, objectives and targets of the 2014 strategy versus previous strategies. Chapter 3: Current Activity in CCS in the UK Current R&D underway in UK; Types of R&D versus Technology Readiness Levels (TRLs), interaction with pilot-scale and demonstration project; Presents DECC s dartboard diagram representing current R&D and a spreadsheet listing other projects relevant to the planning of further work; Current activity in skills development; and Current activity in international collaboration/engagement. Chapter 4: Priorities for Research, Development & Demonstration (RD&D) Recommendations for RD&D (an update of the previous Table 4), using APGTF s recommendations to DECC as the high-level headings. Chapter 5: Other Related Recommendations Knowledge exchange; Skills development, capacity building and supply chain development; International collaboration; Public outreach/education. Chapter 6: Conclusions

3 Contents Executive Summary 2 page 1: Introduction: Current Status of CCS in the UK and Internationally 5 2: Objectives of the Strategy 19 3: Current Activity in CCS in the UK 23 4: Priorities for Research, Development and Demonstration 31 5: Other Related Recommendations 51 6: Conclusions 53 7: References 55 8: Glossary 56 Appendix 1: Table of R&D Projects Underway 60 Appendix 2: EU CCS Demonstration Project Network Proposed Topics for Future Investigation by the R&D Community 98 Front cover, main image: The CC100+ pilot-scale CO 2 capture project at Ferrybridge power station (courtesy of Doosan Babcock Ltd ) Smaller images, from top to bottom: Grangemouth Refinery and Petrochemical Complex (courtesy of 123RF) Carbonated aggregate using CO 2 captured directly from combusted landfill gas (courtesy of Carbon8 Systems Ltd) The Energy Endeavour rig test drilling for National Grid in the North Sea, August 2013 (courtesy of National Grid) Peterhead 2,177MW CCGT power station (courtesy of SSE plc) Advanced Power Generation Technology Forum 1

4 Executive Summary A Strategy for Success Carbon capture and storage (CCS) has a pivotal role to play if the use of fossil fuels in power stations and vital energy-intensive industries is to keep in step with the low-carbon agenda. Globally, recognition is growing that CCS must be at the forefront of efforts to limit increases in average temperatures caused by climate change; it has been calculated that, in the UK, successful deployment could cut the cost of meeting carbon reduction targets by up to 1% of Gross Domestic Product (GDP) by Yet the annual amount of carbon dioxide (CO 2 ) captured and stored worldwide currently totals tens of megatonnes, compared to the thousands of megatonnes that need to be achieved by the middle of the 21st century. This technology strategy aims not only to confront the challenge and help unleash the potential but also to keep the UK at the vanguard of CCS technology development and commercialisation. Decarbonising the UK s energy system; achieving major cuts in industrial carbon emissions; boosting energy security; generating billions of pounds in income and tens of thousands of jobs for UK plc these benefits are all within reach if large-scale deployment of CCS becomes a reality in this country. Taking full and realistic account of work currently under way and wider developments in the UK and worldwide, as well as the recommendations of the UK s CCS Cost Reduction Task Force (CRTF), this strategy sets out a clear vision that has three components: Adoption of a target of around 10% of UK electricity to be generated from fossil fuel plant fitted with CCS by Creation of capability that enables CCS to make a major contribution to meeting the UK s target of an 80% cut in greenhouse gas emissions by Positioning of the UK to succeed in global CCS markets and to play an influential role in the CCS policy dialogue at both European Union (EU) and global level. Realising this vision presents several challenges. These include: cutting costs and risks so that CCS is economically competitive with other low-carbon technologies; putting appropriate, effective market frameworks in place; and removing a range of barriers to deployment. In close conjunction with other organisations wherever appropriate, the APGTF will work to pursue this vision and address these challenges. This document sets out Strategic targets (see p.20) and Technology Implementation targets (see p.21), plus a suite of research, development and demonstration (RD&D) priorities and other recommendations designed to ensure that key CCS development criteria in terms of scale, cost and timelines can be met effectively. CCS in the UK Today In the UK as worldwide confidence is growing that CCS can be safely employed at the necessary scale and at a cost at least comparable to other low-carbon power generation options. Nevertheless, gaps and barriers remain that, if not addressed, will hamper not just the pursuit of CCS projects in this country but also the building of globally marketable expertise within the UK. Despite sluggish progress on large-scale CCS projects, the last three years have nevertheless seen several positive developments. For example, 2012 saw publication of the Government s CCS Roadmap and in December 2013 it was announced that, with funding from the Commercialisation Programme set out in the Roadmap, a front-end engineering design (FEED) study would go ahead on the White Rose CCS project in Yorkshire; an announcement on the Peterhead CCS project in Aberdeenshire is expected in January A huge amount of RD&D has also been completed or is under way, supported by public funding agencies and private companies and covering every stage in the innovation chain. (See Appendix 1 for a list of projects.) In addition, significant progress has been achieved in developing relevant skills and research/test facilities, in securing international collaboration and in enhancing knowledge exchange. 2 A technology strategy for fossil fuel carbon abatement technologies

5 What Next? A Platform for Progress This strategy aims to capitalise on progress to date while focusing on remaining barriers. In consultation with APGTF members, the Carbon Capture and Storage Association (CCSA) and the UK CCS Research Centre (UKCCSRC), the APGTF has therefore developed a list of over 150 RD&D recommendations (see p.32-49). These focus on five fields of activity: whole systems and cross-cutting issues; CO 2 capture; industrial CCS; CO 2 transport; and CO 2 storage. The aim is to assist identification of projects most useful in terms of cutting the costs of CCS, and to make it easier to identify the budgets required to conduct RD&D that can ensure CCS meets its full potential in the UK. Almost 100 of these recommendations focus on RD&D needed to meet short-term objectives (ie on a timescale of 0-10 years); the others focus on RD&D needed to meet objectives that are either mediumterm (7-15 years) or long-term ( years). Most recommendations are categorised as Medium Priority and should begin as soon as possible; the Highest Priority recommendations concentrate, for example, on topics that could benefit from linkage to the first/early full-scale CCS projects. Recommendations are cross-referenced to recent/current projects relevant to planning further RD&D. Complementing this list of RD&D recommendations, the strategy also sets out a range of additional recommendations that cover: knowledge exchange; skills development, capacity building and supply chain development; international collaboration; and public outreach/education. The UK Department of Energy & Climate Change s (DECC s) updated CCS Roadmap has emphasised the Government s desire for a strong CCS industry with projects beyond the current Commercialisation Projects. Building industry confidence in a trajectory for CCS implementation in the UK and likely payback on investment will help overcome the challenges currently faced in planning and justifying RD&D. The recommendations of this strategy, viewed in the context of the broad sentiment within industry at the end of 2013, present a major challenge to the APGTF, the UK Government and its agencies, to motivate industrial co-investment in R&D and maintain the embryonic CCS teams in those organisations not involved in the Commercialisation Projects. Momentum must be maintained across the industry to ensure that the best value is obtained from public investment to date in CCS. The APGTF will now follow up the strategy by developing, with others as appropriate, pragmatic Action Plans. These, in conjunction with the targets, priorities and recommendations outlined in this document, will provide a framework enabling top-line objectives to be achieved, delivery milestones to be reached and investment to be encouraged helping to turn CCS into a mainstream carbon-abatement technology and underpinning development of a strong, globally influential UK CCS industry in the years and decades ahead. Advanced Power Generation Technology Forum 3

6 Introduction: Current Status of CCS in the UK and Internationally 4 A technology strategy for fossil fuel carbon abatement technologies The CC100+ pilot-scale CO 2 capture project at Ferrybridge power station (courtesy of Doosan Babcock Ltd )

7 1 Introduction: Current Status of CCS in the UK and Internationally Background The APGTF has developed a series of technology strategies since 2001, the most recent of which, entitled Cleaner Fossil Power Generation in the 21st Century Maintaining a Leading Role: a Technology Strategy for Fossil Fuel Carbon Abatement Technologies [1],was published in August This strategy gave details of the research, development and demonstration (RD&D) considered necessary to keep the UK at the forefront of fossil fuel carbon abatement technologies (CATs) worldwide. The strategy was well received by the UK Government and its agencies, industry and academe, and over the last two years good progress has been made on many of the priorities, with several of the major R&D initiatives highlighted in the strategy now underway in the UK as described below in Chapters 2 and 3. The APGTF s call for a large-scale, integrated demonstration programme of the main carbon capture and storage (CCS) options was supported by the Government announcement of four large-scale, integrated demonstrations of CCS, and this policy was included in the Coalition Agreement of Although progress on large-scale CCS projects in the UK and Europe has been slower than anticipated, there was a major step forward at the end of 2013 with the announcement of Government contracts for a major front-end engineering design (FEED) study for the UK s Commercialisation Programme, with a second such study expected to be announced early in The need for CCS Meanwhile, the need for CCS as one of the tools for reducing carbon emissions globally both from power generation and industry has been more widely recognised. The recent International Energy Agency (IEA) Roadmap for CCS [2] states clearly that, as long as fossil fuels and carbon-intensive industries play dominant roles in our economies, CCS will remain a critical greenhouse gas (GHG) reduction solution. The IEA s analysis shows that CCS is an integral part of any lowest-cost mitigation scenario where long-term global average temperature increases are limited to significantly less than 4 C, particularly for the 2 C scenario ( 2DS ): in 2DS, CCS is widely deployed in both power generation and industrial applications. The total carbon dioxide (CO 2 ) capture and storage rate must grow from the tens of megatonnes of CO 2 (MtCO 2 ) captured in 2013 to thousands of MtCO 2 (ie gigatonnes of CO 2 GtCO 2 ) in 2050 in order to address the emissions reduction challenge. A total cumulative mass of approximately 120GtCO 2 would need to be captured and stored between 2015 and 2050 across all regions of the globe. For CCS to help fulfil the ambitions of the IEA s 2DS, the new roadmap identifies three time-specific goals for its deployment: Goal 1: By 2020, the capture of CO 2 is successfully demonstrated in at least 30 projects across many sectors, including coal- and gas-fired power generation, gas processing, bio-ethanol production, hydrogen production for chemicals and refining, and iron and steelmaking. This implies that all of the projects that are currently at an advanced stage of planning are realised and several additional projects are rapidly advanced, leading to over 50MtCO 2 safely and effectively stored per year. Goal 2: By 2030, CCS is routinely used to reduce emissions in power generation and industry, having been successfully demonstrated in industrial applications including cement manufacture, iron and steel production, pulp and paper production, second-generation biofuels, and heaters and crackers at refinery and chemical sites. This level of activity will lead to the storage of over 2GtCO 2 /year. Goal 3: By 2050, CCS is routinely used to reduce emissions from all applicable processes in power generation and industrial applications at sites around the world, with over 7GtCO 2 annually stored in the process. The IEA s cost analysis suggests that without CCS, overall costs to reduce emissions to 2005 levels by 2050 increase by 70%. In the UK, the ETI (a member of the APGTF) has estimated (using its Energy Systems Modelling Environment ESME) that without CCS the cost of the UK meeting its climate change targets would nearly double: the net present value (NPV) cost from 2010 to 2050 of meeting the UK s CO 2 reduction targets would be 300bn for a low-cost practical route (ie including CCS); however, if CCS is excluded, the NPV cost would increase by more than 200bn [3]. The reason that the impact is so high is that as well as providing a cost-effective low-carbon power source, CCS is important across the whole energy system, including dealing with industrial emissions, enabling hydrogen production and potentially, when combined with biomass firing, creating net-zero or even Advanced Power Generation Technology Forum 5

8 negative CO 2 emissions. Without CCS, a future carbon-constrained energy system would look very different, for example requiring the complete decarbonisation of the transport and/or domestic heating sectors. Confidence in CCS and competitiveness Increasing confidence is being gained through R&D, through pre-feed and FEED studies in support of the many proposals to develop large-scale CCS projects, and through experience around the world, including building and operating capture plants, that CCS can be safely employed now and in the future, at the necessary scale and at a cost which is comparable to or lower than other low-carbon electricity generation options. There are no scientific barriers preventing CCS. In the UK because the Government has opted for offshore storage social barriers are anticipated to be much less of a difficulty than elsewhere in Europe. It is expected that RD&D (underway and future) will provide evidence that will further reduce these barriers. The regulatory regime is established, but there remains significant concern over the stringency of storage regulation which may yet be a barrier to investment. In particular, the long-term liability associated with storage sites has the potential to be a significant deterrent to potential project developers. The final report of the UK s CCS Cost Reduction Task Force (CRTF), commissioned by DECC, was published in May 2013 [4]. The work carried out predicted that, if built at full-scale in an extended programme, CCS with coal or gas can be cost competitive with other low-carbon generation options by the mid-2020s. The report highlighted a number of areas, recognised in this strategy, where R&D could support the objective of cost reduction. In October 2013, DECC published its response to the CRTF s final report [5], endorsing the value of the report and supporting the recommendations therein. DECC s response also provides updates on some key policy developments since publication of the UK s CCS Roadmap in 2012 (see section on Roadmap below). Importance to the UK CCS could make a huge contribution to reducing the UK s CO 2 emissions. Fossil fuels currently (2012) provide some 70% of the UK s electricity, and if all of this generation was replaced by coal or gas with CCS, the emissions from electricity generation would be reduced by about 90%. Clearly, if the proportions of generation by nuclear power plants or renewable energy sources increase, then the proportion of reductions attributable to CCS would be less than this. APGTF members R&D and project development activities have been predicated on UK targets of 20-30GW capacity of CCS electricity generation on a mix of coal and gas by 2030, compatible with the recommendations of the UK Committee for Climate Change (CCC) to decarbonise the electricity system by 2030 [6] and the ambitions for the UK published in the strategy of the CCSA [7]. This level of ambition is also consistent with the UK s share in the scenarios published in the new IEA Roadmap for CCS, which, as discussed above, envisages 30 projects globally by 2020 (50MtCO 2 stored per year), over 2GtCO 2 /year stored by 2030 and over 7Gt/year by Peterhead 2,177MW CCGT power station (courtesy of SSE plc) 6 A technology strategy for fossil fuel carbon abatement technologies

9 The UK generation gap There has been something of a hiatus in the building of new fossil fuel power plants in the UK, partly due to a slowing in demand for electricity, partly due to the economic downturn, but also due to the uncertainties arising from the Government s long-awaited Electricity Market Reform (EMR). The UK energy regulator Ofgem released a report on electricity capacity in June 2013 [8]. According to this report, electricity margins could tighten in the winter of 2015/16 to between around 2% and 5%, resulting in a supply disruption being a 1-in-12-year event. The probability of a supply disruption is currently 1-in-47-years. By 2015/16, Ofgem expects the total installed capacity to fall to 76.8GW, from the 77.9GW capacity estimated for this winter (2013/14). A view has developed that the only way to avoid a generation gap, whilst continuing to close coal plants to meet the European Commission s (EC s) Industrial Emissions Directive (IED), is to build combined-cycle gas turbine power plants (CCGTs), which must be CO 2 capture-ready. Short-term market forces have seen power generation from coal increase and from gas decrease as a result of falling international coal prices, a consequence of shale gas displacing coal for power generation in the USA. However, with coal capacity shutting down and new-build gas capacity coming on stream as EMR develops, this trend is expected to reverse in the medium term. Further ahead, investment in both new gas- and coal-fired capacity will be necessary to keep a balanced power generation portfolio in the UK. Economic benefits There are major potential economic benefits to the UK economy from successfully developing CCS, beyond simply meeting our climate change targets. i. Exports of CCS technology and avoidance of imports UK companies could be well placed to win home and export business along the whole CCS value chain power plant (designed for CCS), CO 2 capture plant, CO 2 transport infrastructure and CO 2 storage operations. The value of the export market, and the number of jobs that would arise, are both hugely dependent on the pace of growth of the market and the market share won by UK companies. There have been several studies that attempt to quantify the potential benefits and these indicate that the benefits could be very significant: A study by the IPA in 2009 [9], based on the earlier 2009 IEA CCS Roadmap roll-out programme and a 10% market share of the export market for UK companies, concluded: The UK plc share of global business is potentially worth more than 10-14bn/year from around 2025, with the added value in the UK worth 5-9.5bn/year. The UK share of this global business could potentially create 27,000 jobs in the UK from 2020, increasing to 70,000 by A further 10,000 jobs are possible given the right level of Government support. A study carried out on behalf of DECC by AEA Technology in 2010 [10] suggested significant value added to the UK economy from CCS and related clean coal technologies, reaching 2-4bn/year by Similarly, the report estimated that this level of CCS activity would sustain 70, ,000 jobs in the UK by 2030: of this total, about 50% would be in existing businesses activities (e.g. boiler and steam turbines), with the remaining 50% in new employment activities associated with CCS services (e.g. the design and manufacture of capture, transport and storage facilities). A further report from AEA Technology in March 2013 Assessing the Domestic Supply Chain Barriers to the Commercial Deployment of Carbon Capture and Storage within the Power Sector [11] re-affirms that under the base scenario, the total cumulative CCS market in the UK to 2030 is 15.3bn, with the total UK market being around 2.7bn/year in The economic benefits clearly depend on the size of the UK programme and the rate of build, and the share of the global business gained by UK companies will depend crucially on UK companies winning UK projects and thereby gaining references that will be the basis of future exports. Advanced Power Generation Technology Forum 7

10 ii. Reduced costs of low-carbon electricity to the consumer Comparison of the levelised costs of electricity generation (LCOE) shows the cost of generation by coal or gas with CCS (inclusive of capture, transport and storage) in the mid-2020s to be similar to other low-carbon sources such as onshore wind and probably less than offshore wind. This comparison does not recognise the other cost advantages of CCS: unlike wind which is intermittent, CCS-generated electricity does not require investment in back-up plant, and because the CCS power plants will mostly be located at existing power plant sites (provided that an economic route to storage can be exploited), CCS does not require significant extra investment in the electricity transmission grid. It is important that the Government fully recognises these cost advantages of CCS and does not rely on simple comparisons of LCOE, e.g. in its desire for technology-neutral auctions for Feed-in Tariff Contracts for Difference (CfDs). iii. Energy-intensive industries CCS will permit the operation of a number of high-emitting, energy-intensive industries (including cement manufacture, iron and steel blast furnaces, pulp and paper production, second-generation biofuels, and heaters and crackers at refining and chemical sites) in the UK within future carbon emissions targets and indeed many pilot projects and trials are underway overseas. However, unlike electricity generation, some of these industries are able to relocate to other areas where different business conditions exist, so policy instruments must incentivise application of CCS and not just provide disincentives for continued operation and investment in such industries. Some individual industrial sources of CO 2 are similar in size to power plants (e.g. Port Talbot Steelworks at ~10MtCO 2 /year, Teesside Steelworks at ~8MtCO 2 /year and the Grangemouth Refinery & Petrochemical Complex at ~4MtCO 2 /year). However, many industrial sources will not be large enough to justify their own pipeline to a store. As a consequence, industrial CCS clustering of sources to form regional networks will be essential and, associated with such CCS networks, it will be necessary to set and meet common standards for CO 2 purity. Grangemouth Refinery and Petrochemical Complex (courtesy of 123RF) 8 A technology strategy for fossil fuel carbon abatement technologies

11 iv. Indigenous fossil fuels and diversity in the generation mix CCS would enable the use of indigenous coal and natural gas (and shale gas) in a low-carbon electricity system. The development of CCS would allow the UK to have further resilience in its supply of electricity as both coal and gas can be used to provide either baseload power or back-up capacity to deal with any significant shortfall and intermittency from renewable energy sources. It has been clear since the announcements of the last UK Government of no new coal without CCS, now being reinforced by the Emissions Performance Standard (EPS) which is to be set at 450gCO 2 /kwh, that the future of coal-fired generation in the UK beyond the mid-2020s is completely dependent on the deployment of CCS. Any lack of impetus in the development of CCS will mean that coal-fired generation disappears from the UK portfolio over the next 7-10 years. There is a desire within the UK coal industry to see coal+ccs projects brought forward quickly enough to maintain the current coal burn as older stations are closed in response to the EC s IED and the pressures of the Carbon Floor Price. Four coal+ccs power plant projects have been developed in response to the Government s call for commercialisation projects, of which one (The White Rose Project) has been selected to go forward to the next stage and a further two named as reserve projects. For gas and, potentially, shale gas, the EPS would permit operation without CCS but, as pointed out by the CCC, CCS would be needed on the majority of these stations if the 2030 decarbonisation target is to be met. The requirement to build CCGTs capture-ready is thus reinforced, as many will need to be retrofitted with CCS. UK CCS Roadmap and 2013 update In April 2012, the UK Government published its CCS Roadmap - Supporting Deployment of Carbon Capture and Storage in the UK [12], which sets out how the Government proposed to take forward a programme of interventions to support the development of CCS. This programme included: ` ` A CCS Commercialisation Programme with 1bn in capital funding to support commercial-scale CCS, targeted specifically to learn-by-doing and to share resulting knowledge to reduce the cost of CCS such that it can be commercially deployed in the 2020s (see Box 1); A 125m, 4-year, co-ordinated R&D and Innovation Programme covering fundamental research and understanding, through to component development and pilot-scale testing, to ensure that the best ideas with a clear focus on cost reduction can be taken forward to the market, and establishing a new UK CCS Research Centre; Development of a market for low-carbon electricity through EMR, including availability of Feed-in Tariff CfDs for low-carbon electricity tailored to the needs of CCS-equipped fossil fuel power stations (see Box 2); Intervention to address key barriers to the deployment of CCS including work to support the CCS supply chain, develop transport and storage networks, prepare for the deployment of CCS in industrial applications and ensure the right regulatory framework is in place; and International engagement focused on sharing the knowledge generated through the programmes and learning from other projects around the world to help accelerate cost reduction. Advanced Power Generation Technology Forum 9

12 Box 1 DECC s Commercialisation Programme (source DECC website) The UK CCS Commercialisation Competition makes available 1bn capital funding, together with additional support through the UK Electricity Market Reforms, to support the practical experience in the design, construction and operation of commercial-scale CCS. This will: generate learning that will help to drive down the costs of CCS; test and build familiarity with the CCS specific regulatory framework; encourage industry to develop suitable CCS business models; and contribute to the development of early infrastructure for CO 2 transport and storage. The current competition opened in April 2012, and closed in July Four full-chain (capture, transport and storage) projects were shortlisted in October On 14 th January 2013, all the shortlisted bids submitted revised proposals. On 20 th March 2013 the Government announced two preferred bidders: Peterhead Project in Aberdeenshire, Scotland a project which involves capturing around 90% of the CO 2 from part of the existing gas-fired power station at Peterhead, before transporting it and storing it in a depleted gas field beneath the North Sea. The project involves Shell and SSE. White Rose Project in Yorkshire, England a project which involves capturing 90% of the CO 2 from a new, super-efficient, coal-fired power station at the Drax site in North Yorkshire, before transporting and storing it in a saline aquifer beneath the southern North Sea. The project involves Alstom, Drax Power, BOC and National Grid. The Government will undertake discussions with the two preferred bidders to agree terms for FEED studies. As described above, in October 2013 DECC published its response to the CRTF report and provided updates on some key policy developments since publication of its 2012 CCS Roadmap. The updates which are most relevant to this APGTF strategy are summarised below: The importance of CCS in the UK is restated and reference made to recent modelling conducted for the Government s EMR Delivery Plan, which included scenarios of up to 13GW of CCS by 2030, with an industry appetite for even more. The Government s commitment to the Commercialisation Programme supported by 1bn of capital expenditure is restated. There is also a new emphasis on the desire of the Government for CCS to develop into a strong industry. DECC envisages three phases of CCS deployment in the UK, starting with the current projects under the Commercialisation Programme, with a second phase of further projects possibly coming forward on similar timeframes as well as subsequent to those projects. The second phase projects could benefit from lower costs associated with the use of existing infrastructure, lower costs of capital and potentially synergies with enhanced oil recovery (EOR). DECC intends to work with the industry-led PILOT* oil and gas group to further explore how CO 2 -EOR could play a role in UK CCS projects. The fact that CCS projects are major infrastructure developments that can also bring about investment and growth is recognised, and analysis suggests the technology could cut the annual cost of meeting the UK s carbon targets by up to 1% of GDP by 2050 [13]. DECC emphasises that its continuing focus is to deliver support in a way that facilitates the wider development of the CCS industry, particularly ensuring that the support made available now to early projects has a beneficial impact on the pace and cost of future CCS deployment. It quotes as an example that, as part of the White Rose CCS project, a large capacity Yorkshire/Humber CCS Trunkline has been included in the FEED study, with capacity in excess of that required for the Competition project alone, to support the work National Grid is already undertaking as part of its EC-funded activities for the Don Valley project. Such a pipeline could encourage the development of further CCS projects in the area through the provision of transportation facilities and access to CO 2 storage. * See 10 A technology strategy for fossil fuel carbon abatement technologies

13 CCS for deployment on industrial sources is less developed than for power sources. As a result, the Government has committed in the recent DECC publication The Future of Heating: Meeting the Challenge [14] to a techno-economic study to help to better understand the necessary industrial carbon capture technologies and costs. A joint Industry-Government steering group has been established to guide this work, which is expected to be completed in the spring of In order to encourage supply chain development, as detailed in the EMR consultation launched in October 2013, projects seeking a CfD will be required to produce a Government-approved supply chain plan before they are eligible to enter the CfD allocation process. This will apply to all low-carbon generation projects above a 300MW capacity. In support of international collaboration, Energy and Climate Change Minister Greg Barker recently signed a Joint Statement with the Governor of Guangdong on low-carbon cooperation, including CCS. This has been complemented by the creation of a memorandum of understanding (MoU) between UK and Chinese organisations developing CCS*. DECC shares the CRTF s interest in the extent and value of flexibility that CCS might bring. Flexibility could be of particular value in a future low-carbon energy mix with large proportions of intermittent or inflexible generation. Further research on this could be important for both the UK and international CCS development. DECC has proposed a study on this topic to the IEA Greenhouse Gas R&D Programme (IEAGHG) which it has agreed to take forward. Constraints and limitations on plant size can restrict developers ability to make the most favourable economic choices for their site. The Government agrees with the importance of allowing developers to make the most appropriate choices for their sites and does not intend to introduce any constraints on the size of plant in the future. Similarly, the Government has adopted a technology- and fuel-neutral approach in its CCS policy, leaving the choice to the developers, who are best placed to make these decisions. The 10-year MoU between UKCCSRC, SCCS, GDLRC and CFEDI being signed in London, September 2013, witnessed by Governor Zhu Xiaodan of Guangdong Province, PRC, and Energy and Climate Change Minister Greg Barker, DECC (courtesy of UKCCSRC) * Guangdong Low-carbon Technology and Industry Research Centre (GDLRC), Clean Fossil Energy Development Institute (CFEDI), UKCCSRC, and Scottish Carbon Capture and Storage (SCCS) Advanced Power Generation Technology Forum 11

14 UK Electricity Market Reform The main barrier to CCS is undoubtedly the lack of financial incentives to implement it. The cost of carbon emissions, whether levied via the EU Emissions Trading Scheme (ETS) or in the UK via the Carbon Price Floor, is insufficient to cover the cost particularly for early projects. A similar gap existed for electricity generated from renewable energy sources and this has been filled by the Renewables Obligation. In the future, it is proposed that the financial incentives for low-carbon generation will be through the mechanisms of EMR. The EMR programme will significantly change the electricity market. The Government anticipates that it will result in 110bn investment for the UK to secure an affordable supply of electricity while meeting its climate change targets. As part of the programme, the Government is introducing: Feed-in Tariffs with CfDs a mechanism to support investment in low-carbon generation; Capacity Market a mechanism to support security of supply if needed; and Institutional arrangements to support these reforms. Importantly, CCS is seen as one of the key technologies alongside wind (onshore and offshore) and nuclear that will contribute to the low-carbon generation goal and be supported by CfDs (see Box 2). The proposal to introduce measures through EMR to support the implementation of CCS beyond the initial demonstration or Commercialisation projects is world-leading. Box 2 EMR Contracts for Difference (source: DECC website) These will stimulate investment in low-carbon technologies (including renewables, nuclear and CCS) by providing predictable revenue streams that will encourage investment by reducing risks to investors and by making it easier and cheaper to secure finance. The Government s CCS Roadmap, published in April 2012 [12], included the CCSA s ambition for 20-30GW of CCS to be deployed by 2030 and stated: The measures being taken by Government, as set out in this Roadmap, should enable this ambition to be achieved, subject to CCS demonstrating its effectiveness as a cost-competitive, low-carbon source of electricity generation in time to meet projected demand. However, in its EMR Delivery Plan [15], published in December 2013, where the Government presents a forward view of low-carbon capacity in 2030 (Chapter 6), there are five scenarios quoted for CCS that have total UK CCS electricity generating capacities of 1-13GW, much smaller than the wind capacities (24-54GW) and nuclear capacities (9-20GW) quoted. International position The international state-of-play of CCS is very well described in the recent Global CCS Institute report Global Status of CCS [16]. Notably, a number of large-scale, integrated projects (the Boundary Dam project in Saskatchewan, Canada, which is a post-combustion CO 2 capture technology retrofit on a coal-fired power plant; the Kemper County energy facility in Mississippi, USA, which is a new coal-fired integrated gasification combined-cycle (IGCC) with pre-combustion decarbonisation; and the Gorgon gas processing plant in Western Australia) have moved forward to the construction phase and are now well ahead of the UK s Commercialisation Programme. In contrast, there has been a reduction in the number of planned, fullscale CCS projects since 2011, particularly in Europe with the failure of the EC s measures to stimulate development. Status of CCS technologies in a UK context A full description of the various CCS technologies is presented in the APGTF s 2009 strategy (Section 4) [17] and is therefore not repeated here. The latest estimates of capital expenditure ( CAPEX ) and operating expenditure ( OPEX ) costs and the resulting LCOE for various CCS options are given in the Final Report of the CRTF [4] and show that coalor gas-fired power plants with CCS can be a competitive form of low-carbon power generation. For both power generation and industrial CCS, the technologies comprise CO 2 capture, transport and offshore storage, covered in turn below. 12 A technology strategy for fossil fuel carbon abatement technologies

15 Kemper County energy facility during construction, October 2013, Mississippi, USA (courtesy of Southern Company) CO 2 capture The capture technologies that are ready for application and proposed for the early CCS power projects (in the UK and abroad) are: Post-combustion capture (PCC) for gas-fired or supercritical pulverised coal (PC)-fired power plants using solvents. This is the technology proposed for the Peterhead CCGT retrofit project whose FEED study is expected to be announced early in It was also proposed for the Kingsnorth, Longannet and Hunterston CCS demonstration projects in the UK that have been cancelled. Furthermore, E.ON/GDF Suez plan to use this technology option at their demonstration project at Maasvlakte in the Netherlands and it is also being used at Boundary Dam in Canada (it was recently announced that the integrated CCS demonstration project at Unit 3 at the Boundary Dam power station, which will capture and store 1MtCO 2 /year, is on track for completion by April 2014; it is running about $115m over its budget of $1.24bn, although the capture portion is essentially finished on budget ). This technology is of particular interest because of its potential for retrofitting to existing, modern, high-efficiency, supercritical power plants such as those built over recent years in China and India, and for this reason it was specified in the first UK CCS Competition. PCC is suitable for baseload electricity generation and has the capability for flexible operation. In the UK, there are two PCC pilot-scale plants at Ferrybridge power station in Yorkshire (SSE/Doosan Babcock/Vattenfall/TSB/DECC, 5MW e ) and Aberthaw power station in south Wales (RWE npower/ Cansolv, 3MW e ), as well as the UKCCSRC s PACT Facilities at Beighton near Sheffield (150kW th ). PCC is being validated at 5-40MW th scale in Europe. There is a significant amount of supporting R&D underway in the UK (see Chapter 3). RWE s 3MW e carbon capture pilot plant at Aberthaw power station, south Wales which pilots carbon capture technology designed by Shell Cansolv (courtesy of Shell Cansolv) Advanced Power Generation Technology Forum 13

16 Oxy-fuel combustion for coal power plants. This is the technology proposed for the 426MW e White Rose Commercialisation Project at Drax for which the FEED study is now underway. Oxy-fuel combustion has been developed in Europe and the USA by Alstom and in the UK by Doosan Babcock and partners, and is suitable for new-build projects and retrofitting to existing plant. Four other companies are offering to build new oxy-fuel fired power plant. It has been validated at a large pilot-scale in Europe, e.g. the 30MW th Schwarze Pumpe project in Germany (lignite-fired), the 30MW th Lacq project in France (gas-fired) and at Ponferrada in Spain (20MW th PC-fired and 30MW th circulating fluidised bed (CFB) coal-fired, operated by CIUDEN). Other retrofit applications to coal-fired plants at a demonstration scale are underway in Australia (Callide, 20MW e ) now operational with an aim to achieve 10,000 cumulative operating hours by November 2014 and planned in the USA (FutureGen 2.0, 165MW e ). Oxy-fuel combustion is suitable for baseload and flexible operation (the air separation unit (ASU) could be designed to meet oxygen (O 2 ) demand with ramp-up and turn-down rates of ~3%/minute, similar to a sub-critical PC unit). The significant amount of supporting R&D in the UK includes the Doosan Babcock OxyCoal 40MW th combustion system demonstration on the test facility at Renfrew and projects using the PACT facilities (see Chapter 3). Pre-combustion decarbonisation from gas- or for IGCC coal-fired power plants. Pre-combustion decarbonisation from gas was the technology identified for the first proposal for a low-emissions power plant at Peterhead in Subsequent interest in pre-combustion decarbonisation has focused upon IGCC coal-fired power plants. This technology is primarily for baseload electricity generation and is proposed for use by three entrants in the UK Commercialisation Competition for new coal power plants with CCS, namely 2Co Energy, Teesside Low Carbon and Captain Clean Energy. It is also of interest for hydrogen (H 2 ) production and offers fuel flexibility. Pre-combustion decarbonisation has higher CAPEX but lower OPEX costs than PCC or oxy-fuel combustion technology options, although at the current level of knowledge there is little difference in the resulting LCOE. In a pre-combustion decarbonisation system, CO 2 can be removed from the gas stream using a physical solvent washing technology, which has been proven at scale in the syngas, ammonia and chemicals feedstock industries over many years and at many plants including in the USA and China. An alternative approach is under development in the UK, based on compression of the gas stream to separate the CO 2 in a liquid form (see the Next Generation Capture Technology project in Appendix 1). Other technologies. There are many other capture technologies at an earlier stage of development, including solid absorbent cycles, chemical/carbonate looping cycles and novel oxy-fuel cycles (see Chapter 3 for references to current R&D). TATA Steelworks in Port Talbot UK (courtesy of 123RF ) 14 A technology strategy for fossil fuel carbon abatement technologies

17 Industry CO 2 capture There is extensive development and piloting of industrial CCS around the world (see Existing Activities column in the table on p.43) but little on the ground as yet in the UK. However, the Government (DECC and BIS) has recently initiated a study, entitled Techno-Economic Study of Industrial Carbon Capture for Storage and Capture for Utilisation, which is to report in the spring of Government analysis has identified that industrial CCS ( ICCS ) is likely to be a key technology to deliver carbon abatement in energy-intensive industries such as iron and steel, cement, chemicals and refining: without CCS, it may not be possible to substantially decarbonise these sectors. The Government s 2013 publication The Future of Heating: Meeting the Challenge [14] committed DECC and BIS to undertake this study to better understand industrial carbon capture technologies and costs. The study will help determine the next steps in supporting innovation in this field. It is notable that industrial capture is included in the EC s Horizon 2020 Work Programme in the Area of Secure, Clean and Efficient Energy [18] published in December CO 2 transport In the UK, the transport of CO 2 from the capture plant to the storage site offshore will be by pipeline, ship or a combination of these methods. A network of pipelines similar to the current gas transmission system would eventually be needed to access all large sources of CO 2. Pipeline transport of CO 2 is an established technology. It has been proposed both using new pipelines (e.g. for the White Rose project) and also by re-using redundant gas pipelines (e.g. for the original Longannet retrofit project). Pipelines may operate at medium pressure (around 30 bar) with the CO 2 in gaseous phase or at high pressure (>80 bar) with the CO 2 in dense phase. The CO 2 may be compressed or pumped at the capture site, in stages along the pipeline and at the storage platform. Compressors required for this duty are available commercially. In the USA, there are extensive pipeline networks transporting dense phase CO 2 from natural sources and ammonia plants to oilfields where it is used for EOR. For CCS applications in the UK, CO 2 pipelines must be designed to take account of the relatively dense population along pipeline corridors (cf. the USA), the need to recognise the presence of impurities (especially O 2 ), the requirement for the CO 2 to be relatively dry to avoid corrosion or hydrate formation, and, in the event of a leak, the effect of Joule-Thomson cooling on the pipe material rendering it more brittle. The transport system design also has to recognise the pressure requirements at the storage site which may vary over time (e.g. gas injection initially and dense phase injection later) and the possible composition restrictions imposed where existing infrastructure (e.g. well tubes) is to be re-used. Pipelines and compressor stations can be engineered safely by taking a conservative approach to their design, but RD&D, including that underway (Chapter 3) and that recommended (Chapter 4), will allow increased confidence, design margins to be refined and costs to be reduced. Pipeline infrastructure to serve a potential Yorkshire and Humber CCS cluster (courtesy of National Grid) Advanced Power Generation Technology Forum 15

18 CO 2 storage A number of source-sink mapping studies, including GESTCO (2008), UKSAP (ETI, 2011), CASSEM (SCCS, 2012) and Captain (SCCS, 2013), have confirmed material storage potential in the UK with a number of locations where the proximity of a cluster of CO 2 sources and potential suitable storage favour the development of regional CCS hubs. Storage sites for these hubs include the Bunter sandstone in the southern North Sea (SNS), the Captain fairway in the central North Sea (CNS) and the Irish Sea. CO2STORED* is the UK s most comprehensive atlas of offshore CO 2 storage sites, accessible on the internet and operated by the Crown Estate and the British Geological Survey (BGS). The database is the result of ETI s 4m, 3-year UK Storage Appraisal Project (UKSAP). In addition, Scottish Carbon Capture & Storage (SCCS) continues assessment of the Captain fairway via the CO2MultiStore project. The ETI s overall appraisal of UK storage capacity in 2011 [19] showed a potential capacity of 78GtCO 2 (compared to a UK requirement of around 15GtCO 2 over 100 years). Approximately 90% of the storage potential is in deep saline formations, although significant potential capacity also exists in mature/ depleted oil and gas reservoirs. Implementation of CO 2 -EOR could provide some early storage opportunities. The potential to maximise the hydrocarbon recovery from the UK Continental Shelf (UKCS) is currently the subject of a Government-commissioned review by Sir Ian Wood. In an interim report from the review [20], EOR (of which CO 2 -EOR is one subset of technologies) is recognised as one of a number of options for improving recovery. Whilst CO 2 -EOR is not currently being undertaken in the UK North Sea, successful hydrocarbon gas EOR projects are being undertaken in the BP-operated Magnus and Ula fields. Barriers to the implementation of CO 2 -EOR in the North Sea are seen by operators as more commercial- and policy-based than technical. In particular, CO 2 -EOR will need to compete with the new generation of enhanced waterflood technologies that are now beginning to be deployed in the market. Major CO 2 emitters and potential storage sites in the UK (courtesy of the Energy Technologies Institute) * See 16 A technology strategy for fossil fuel carbon abatement technologies

19 Active projects in the UK are proposing storage in depleted gas fields (including the Goldeneye Field by Shell, initially for the Longannet project and now for the Peterhead Commercialisation project), in depleted oil fields (by 2Co Energy with EOR) and in deep saline formations (Summit Power in the Captain aquifer in the CNS and National Grid in the SNS, initially for the White Rose project). The Teesside Low Carbon project considered storage in a combination of geological features, deep saline formations and depleted hydrocarbon reservoirs. Storage in deep saline formations has a potential cost advantage, avoiding the higher investment and operating costs associated with EOR. However, this advantage tends to be offset by the limited availability of appraisal data for many deep saline formation storage options which is a major uncertainty in the development of this resource. The appraisal drilling by National Grid at its selected site in Block 42/25 in the summer of 2013 was a significant step forward. The Energy Endeavour rig test drilling for National Grid in the North Sea, August 2013 (courtesy of National Grid) Early deep saline formation opportunities are targeting confined structures (ie domes or equivalent) where the potential for migration is limited. In the near-to-medium term, understanding and mitigating geomechanical risk will be a key area of work. In the longer term, interest will also need to focus on open structures with larger capacity where models of long-term migration will need to be validated. Health and safety of CCS Like any large-scale industrial activity, there are hazards associated with CCS which could impact on human safety if not properly managed. Many of these hazards are well understood. Industry is continuing to work with academics and regulators to define the appropriate controls including prudent engineering solutions that should be implemented. Where appropriate, knowledge is being transferred from other relevant sectors, ie the oil and gas, petrochemicals and industrial gases industries. Safety will be ensured by the UK s established safety legislation (enforced by the Health & Safety Executive), which is designed to protect both workers and members of the public, and will apply across the CCS chain from CO 2 capture to injection. Update of strategy Taking account of the above scenario analysis and the announcements by DECC of the next stage in the UK Commercialisation Programme, the APGTF has decided it is timely to update its strategy to take account of the current situation, with particular emphasis on updating the priorities for RD&D to take account of the work which is now underway, the latest position globally and the recommendations of the CRTF regarding reducing the costs associated with CCS. Advanced Power Generation Technology Forum 17

20 Objectives of the Strategy Ferrybridge Power Station (courtesy of SSE plc) 18 A technology strategy for fossil fuel carbon abatement technologies