CO 2 TRANSPORT INFRASTRUCTURE IN GERMANY NECESSITY AND BOUNDARY CONDITIONS UP TO 2050

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1 CO 2 TRANSPORT INFRASTRUCTURE IN GERMANY NECESSITY AND BOUNDARY CONDITIONS UP TO 2050

2 Groningen, 11 July 2014 Luuk Buit Wim Mallon Paula Schulze Semere Solomon Foto Gerard Stienstra Contact: Consultant KEMA Nederland B.V. Energieweg 17 NL Groningen Author:Luuk Buit Commissioned by IZ Klima Informationszentrum für CO 2 -Technologien e.v. Berliner Freiheit 2 D Berlin Author : Luuk Buit 121 pages 1 annex reviewed : multiple reviewers Copyright 2014, KEMA Nederland B.V., Groningen, the Netherlands. All rights reserved. It is prohibited to change any and all versions of this document in any manner whatsoever, including but not limited to dividing it into parts. In case of a conflict between the electronic version (e.g. PDF file) and the original paper version provided by KEMA, the latter will prevail. KEMA Nederland B.V. and/or its associated companies disclaim liability for any direct, indirect consequential or incidental damages that may result from the use of the information data, or from the inability to use the information or data contained in this document. The contents of this report may only be transmitted to third parties in its entirety and provided with the copyright notice, prohibition to change, electronic versions validity notice and disclaimer, unless otherwise agreed. KEMA Nederland B.V. Energieweg AN Groningen P.O. Box CA Groningen The Netherlands T F Registered Arnheim

3 EXECUTIVE SUMMARY Background and goal of the study In its 2010 Energy Concept for an Environmentally Sound, Reliable and Affordable Energy Supply (Energiekonzept für eine umweltschonende, zuverlässige und bezahlbare Energieversorgung), the German government has set ambitious CO 2 emission reduction targets. Up to 2050 CO 2 emissions are to be reduced by at least 80 percent from the 1990 baseline. Increasing the use of renewable energy is the first step towards a low carbon energy sector. However, to safeguard security of supply, the use of fossil fuels will continue to be required in the future. Carbon dioxide capture, transport and storage (CCS) can provide an essential contribution to the targeted emission reduction, in energy as well as industry. For the realization of CCS technology in Germany, an intelligent CO 2 transport infrastructure is required. Considering the public debate in Germany, long-term CO 2 storage on land seems unlikely. However, the offshore storage potential can be used to attain the climate goals. Thus far, the realization of a CO 2 transport infrastructure has received limited attention. Therefore, the study at hand is dedicated to the question of which technical, legal and economic requirements should be taken into account during the implementation of an efficient CO 2 infrastructure in Germany. To tackle this issue, DNV KEMA (now DNV GL) has investigated for IZ Klima Informationszentrum für CO 2 -Technologien e.v., - How CO 2 emissions in Germany will develop up to 2050 within the boundary conditions of the German government s Energy Concept, - Which capacity of a CO 2 transport infrastructure is required to transport the projected amount of CO 2 to offshore storage locations and which transport options are suitable, - Which regulatory prerequisites are necessary to create incentives for possible business models for the future CO 2 transport and - How the timing and costs of implementation of a transport infrastructure can be realized. Key findings To meet the targeted CO 2 emission reduction, the captured and transported amounts of CO 2 must increase to 60 Mt/a in To determine the required CO 2 infrastructure capacity in Germany, first, an assessment is made of the required amounts of CO 2 to be captured in the timeframe until 2050, in order to meet the emission reduction targets of the German government. The analysis takes into account CO 2 point sources from power and industry of 0.5 Mt/a and above. It shows that, when all emission reduction and renewable energy targets are to be taken into account, CCS technology must contribute to emission reduction by -3-

4 30 Mt/a (million tons a year) in the year When looking at the timeframe up to 2050, the amount of CO 2 to be captured and transported increases to 60 Mt/a in order to be able to reach the targets. Amounts of CO 2 (Mt/a) Year Figure 1 CO 2 amounts to be captured and transported until 2050 taking into account the emission reduction targets of the German government. Based on the results of the European GeoCapacity project (GeoCapacity, 2009) it is safe to assume that saline aquifers in the German North Sea alone provide sufficient capacity to store the required amounts of CO 2 for 50 to 100 years. Storage capacity is therefore not a limiting factor. The utilization rate of the CO 2 infrastructure is determined by intermittent renewable energy generation. The realization of a suitable CO 2 transport infrastructure depends strongly on the composition of the CO 2 supplied, which can vary between point sources. These fluctuations can have a negative effect on the energy demand or the available capacity of the CO 2 transport infrastructure and storage installations. To illustrate the variation in CO 2 sources and supply profiles at the system boundary with the transport infrastructure, three clusters are defined in the study. They indicate realistic scenarios of the typical characteristics of CO 2 supply by the major German emitters in power and industry: (1) a high concentration of sources in industry and power, (2) centralized power only, (3) dispersed industrial sources and power plants. Clustering of multiple different sources has shown to provide a more balanced CO 2 supply, with less variation in flow as well as in composition. Therefore, clustering of CO 2 sources with flow or composition variations for transport leads to a higher utilization of the infrastructure compared to point-to-point solutions with sources of a similar nature. At the same time, the utilization rate of the CO 2 transport infrastructure is influenced by renewable power generation. Because significant amounts of power will be produced by renewable sources that are inherently intermittent and are fed into the power grid with priority, variations in renewable power output need to be balanced, for the foreseeable future, by fossil-fuel power stations, equipped at least -4-

5 in part with CCS. While the CO 2 transport system will be designed for the maximum CO 2 supply, with these increasingly varying CO 2 flows, the CCS system will operate below maximum capacity for most of the time. Calculations show that the utilization will be between 60 and 80 percent. Further economic analysis is needed to find the optimum between 100 percent transport infrastructure utilization and 100 percent feed-in of captured CO 2. Comparison of transport options shows: CO 2 transport by pipeline is proven technology and less costly. For the required scale of CO 2 transport, two technically feasible transport options are available: pipelines and shipping. These two options were investigated and compared in technical terms, size and costs. CO 2 transportation by pipelines is a mature business that can build on decades of experience worldwide. Shipping of CO 2 is also existing technology, albeit for relatively small volumes. This experience is available but must be adapted to fit the European and German context. An indicative cost estimate is made for the bare installed cost of CO 2 infrastructure up to 2050 for pipeline transport as well as shipping. The CAPEX (Capital Expenditure) of the pipeline infrastructure and that of the shipping infrastructure is estimated to be about four billion Euros each up to It is assumed that the pipeline infrastructure consists of 50 km long collection pipelines, 350 km long onshore and 100 km offshore pipelines. The shipping infrastructure consists of 50 km connection pipelines, liquefaction terminals, around 100 barges and around 16 carriers. Table 1 Investment schedule CO 2 transport infrastructure: pipeline and shipping CAPEX (billion ) Investment period Pipelines onshore and offshore Inland barges and offshore carriers Present Total The schedule for the realization of a CO 2 transport infrastructure implies that the course must be set now to be able to meet the emission reduction targets. Planning and financing will be especially challenging given the schedule for attaining CO 2 emission reduction targets. For both transport options (pipeline and shipping), the implementation of a suitable CO 2 transport infrastructure has a lead time of at least three to five years. Moreover, large-scale deployment of CO 2 transport must be preceded by demonstration projects, which will again take some years. Also, public participation in the approval process can extend the lead time considerably, so that in total, ten years or more can pass before the infrastructure can be commissioned. After successful large-scale demonstration around 2020, CO 2 supply from the first commercial installations is not to be expected before 2025 and a comprehensive large-scale deployment is not possible before The -5-

6 realization of the required infrastructure for a large-scale commercial use of CCS needs to be started now in order not to miss the climate goals completely. Long-term targets, from 2030 onwards, can be met. However, this requires careful planning, political dedication, ample funding and public engagement. Political recommendations As part of the portfolio of low carbon technologies, the use of CCS technology can make an important contribution to meeting the ambitious emission reduction targets up to 2050 in Germany. Technical feasibility is not the limiting factor. Rather the necessary boundary conditions must be created to provide a stable planning and investment climate. To date, there is no direct economic incentive for the realization of the required infrastructure. The government has a major role to set the right incentives. In the likely case of a transport monopoly, state regulation governs the rules of play, including thirdparty access to the infrastructure. In the long term, the targeted CO 2 emission reduction must be driven by emission trading only, involving competition between low carbon technologies without market interventions. In a transition phase, incentive measures for demonstration plants and transport and storage infrastructure are required. In addition, legislation needs to be updated on a national and international level. Ship transport of CO 2 should be incorporated in the German CCS law, to keep this option open and not to exclude a specific transport option on legal grounds. Furthermore, the CCS law needs to be updated to make it possible to transport and store CO 2 on the scale of some 10 Mt/a. On the international level, ratification of the 1996 London Protocol 1 by all treaty partners is recommended. In addition, transboundary CO 2 transport can be realized through bilateral and multilateral agreements. The EU CCS directive provides the necessary framework. 1 Amendment to the international agreement of 1972 on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters in an exceptional rule for permanent storage of CO 2 from industrial processes in sub-seabed geological formations. -6-

7 CONTENTS Page Executive summary Introduction Objectives of the study Scope of this study Reading instructions Scoping and boundary conditions General considerations and assumptions Key assumptions & system boundaries CO 2 source and capture assumptions CO 2 transport assumptions CO 2 storage assumptions CO 2 source boundary conditions Type of source and capture technologies Mixing of CO 2 streams from different sources Influence of operational dynamics and RES Transport boundary conditions Storage boundary conditions Reservoir conditions Injectivity constraints Secondary constituents CO 2 reduction and CCS in Germany up to General assumptions on German CO 2 emissions towards Target CO 2 emissions up to The role of CCS in reaching the reduction goals Scenario for CCS in Findings on CO 2 emissions and CCS potential in Germany Sizing of a CO 2 transport infrastructure Approach CO 2 sources and capture technologies Operational mode of the point sources and RES Clustering of point sources Cluster I High concentration of industrial and power sources Cluster II Centralized power generation only Cluster III Scattered industrial sources and power plants Analysis of the CO 2 available for transport Results: variations in CO 2 output flow Results: variations in CO 2 concentration Sensitivity analysis for the annual amounts of captured CO Comparison of clusters and conclusions Technical requirements for CO 2 infrastructure Main CO 2 characteristics for transport

8 5.2 Transport modalities Routing and combining modalities Composition of transported CO Thermodynamic behaviour Corrosion prevention Health, safety and environmental (HSE) considerations Mixing of different CO 2 streams Findings on technical requirements of a CO 2 transport infrastructure Transport by pipeline Components of a pipeline infrastructure Collection network Compressor Onshore pipeline Booster Shore crossing Offshore pipeline Operation Operations philosophy Aspects of operation Findings on CO 2 transport by pipeline Transport by ship Elements of a CO 2 shipping system Collection network Liquefaction and conditioning unit Intermediate storage for liquefied CO Barge loading facilities Barges Terminal & CO 2 carrier loading facilities CO 2 carriers Offshore offloading and injection facilities Summary on ship-based CO 2 transport Development of CO 2 infrastructure up to Long-distance infrastructure by pipeline and development over time Ship-based CO 2 transport from the clusters to the sink Intermediate storage Required number of barges for inland shipping Number of CO 2 carriers Size of the terminal Transport infrastructure conclusions and requirements Size of transport network by ship Transport costs Overall conclusions on CO 2 infrastructure Business models for CO 2 transport infrastructure Approach

9 9.2 Examples and definitions Definition of business models for CO 2 transport Examples of business models Literature background on CO 2 transport business models Current status of CCS development from literature Business models for the CO 2 transport sector from literature possible business models Financing CO 2 transport infrastructure Role of the government through regulation Example of CO 2 infrastructure development Zero Emissions Platform 2 additional business models Workshop on business models for CO 2 transport Actors and their role Costs and risks of key actors Main findings from the workshop Key findings on business models Regulation Regulatory requirements Current legal status of CO 2 and CO 2 transport in Germany Identified regulation issues Permitting Cross-border transport Transfer of ownership Liabilities Pricing and access to CO 2 transport infrastructure Findings and recommendations for a CO 2 transport infrastructure Conclusions CO 2 emissions and CCS potential in Germany Infrastructure requirements for clusters of CO 2 sources General technical requirements for a CO 2 transport infrastructure Requirements for CO 2 transport by pipeline Requirements for ship-based CO 2 transport Overall conclusions on CO 2 infrastructure Business models Regulation CCS implementation trajectory Bibliography Appendix A background on Scenario for CO 2 infrastructure in 2050 in Germany (top-down)

10 1 INTRODUCTION IZ Klima has commissioned DNV KEMA to perform this study of infrastructure required to transport CO 2 from sources in Germany to offshore sinks in Europe. The following sub-chapters cover the aim, scope and general assumptions of this study. Reading instructions can be found at the end of the chapter. 1.1 Objectives of the study IZ Klima aims to share information about the opportunities and potential of CO 2 technologies and Carbon Capture and Storage (CCS) in particular and strives to prepare its members, German energy and electricity utilities, energy intensive industries and equipment suppliers, as well as the German government, the interested public, the media and academia for the implementation of CO 2 technologies in Germany. The objective of this study is to identify the requirements for building up a CO 2 infrastructure for Germany up to This study s approach is to perform a technology-based analysis of the current state-of-the-art for CCS in power generation and industrial technology, whilst taking into account the legislative and business drivers that can enable CO 2 infrastructure in Germany up to 2050, assuming a reduction of CO 2 emissions in Germany as described in the German government s 2010 Energy Concept (Energiekonzept der Bundesregierung 2010) and the 2011 paper on energy system transformation (Die Energiewende 2011) (BMWi and BMU, 2011), as well as the implementation path described there. 1.2 Scope of this study The focus of this study is CO 2 transport. To calculate the amounts of CO 2 to be stored, only the larger German point sources > 0.5 Mt/a of CO 2 are taken into account. For storage, offshore storage under the North Sea is assumed. CO 2 capture, transport and storage cover a set of activities that are strongly interlinked. In the figure below a general scheme is included that shows the different aspects along the different parts of the CCS chain. Although transport of CO 2 is only one element of the CCS chain, it can be the largest in size, with its infrastructure spanning over hundreds of kilometres connecting sources of CO 2 with CO 2 storage sites. This study focuses on the transport infrastructure requirements for Germany. To ensure a thorough assessment of the transport infrastructure requirements, the entire CCS chain is considered, including the source, capture and compression technologies, the transport infrastructure and the storage facilities, as these influence what is required for the transport infrastructure. Figure 2 shows these interfaces. -10-

11 Fuel Source Power station Electricity Sink Capture process CO 2 released Energy Transport interfaces Energy CO 2 conditioning Compression Transport Storage installation Storage reservoir Figure 2 CO 2 transport shown as part of a chain of CO 2 capture, conditioning, transport and storage, with system boundaries around transport activities. The source could also be an industrial facility. 1.3 Reading instructions The study combines several analyses to determine the options for realizing a CO 2 transport infrastructure that is in line with the Energy Concept targets. The process of determining the characteristics of a CO 2 transport infrastructure for Germany is sketched in Figure 3. German Energy Concept Amounts of CO 2 to be transported CAPEX pipeline transport CAPEX shipping transport Figure 3 Process of determining the characteristics of a CO 2 transport infrastructure that is in line with the Energy Concept. -11-

12 Figure 4 shows the structure of the study as a whole. Figure 4 Structure of the study as a whole. The details of the transport infrastructure, combined with business model-related and regulatory requirements lead to findings on the feasibility of CO 2 transport in Germany. The remainder of the document is structured as follows: - The next chapter 2 covers the scope, the main assumptions and boundary conditions that apply to this study. - Chapter 3 focuses on the extent CCS needs to contribute to the German emission reduction goals. - In chapter 4, the size and design of a CO 2 transport infrastructure are discussed for a generic clustered model of CO 2 sources. - Chapter 5 covers the technical requirements of ship and pipeline CO 2 transport infrastructure for Germany. - In chapter 6 the specific requirements and technical requirements of a pipeline transport network are discussed. - Chapter 7 discusses the requirements for a shipping CO 2 infrastructure. - In chapter 8, the requirements for development of an overall CO 2 transportation infrastructure are determined, based on the amounts of CO 2 calculated in chapter 3 and the characteristics and requirements covered earlier. Indicative estimations of the costs of the CO 2 transportation network are also given. - In chapter 9 the characteristics of possible business models for CO 2 are discussed. - Chapter 10 describes the regulatory requirements for implementation of large-scale CO 2 transport in Germany. - Chapter 11 states the conclusions of the study and comments on the possible infrastructure implementation trajectory. -12-

13 2 SCOPING AND BOUNDARY CONDITIONS This chapter discusses the considerations and assumptions that define the scope of this study, and that have been applied throughout the study. First general considerations are discussed in sub-chapter 2.1. Boundaries of the transport infrastructure are defined in sub-chapter 2.2. In sub-chapters 2.3 to 2.5, the main influences of capture and storage on the CO 2 transport infrastructure are discussed. 2.1 General considerations and assumptions When considering the CO 2 transport infrastructure in Germany, many aspects and details regarding the deployment and realization of the infrastructure are determined in policy-making processes, in regulatory bodies, and in the industry and energy sector. The legislation, rulings and standards that currently apply for CCS, and in particular in Germany, are included unless otherwise specified. This study first focuses on the technical aspects of the CO 2 infrastructure, with a specific set of assumptions and boundary conditions. These are discussed in the following sub-chapters. Furthermore, where alternative assumptions are applied, these will be explicitly mentioned in the report, e.g. when discussing technical alternatives optimizing the transport infrastructure. With the main considerations and assumptions in place, a focused analysis can be made, whilst leaving room for further evaluation and discussion of alternatives that may deviate from the assumptions and conditions. The current state-of-the-art technology is the basis for all technical assumptions, and applies to both current and future applications. For example, the current state-of-the-art power generation efficiencies and unit sizes apply for the entire period to The starting points for quantifying the emissions up to 2050 and the demand for CCS in Germany are taken from the German government s 2010 Energy Concept (Energiekonzept der Bundesregierung 2010) and the 2011 paper on energy system transformation (Die Energiewende 2011) (BMWi and BMU, 2011), with several additional assumptions as described in chapter 3. This study aims at large sources with CO 2 emissions exceeding 0.5 Mt/a and offshore sinks for permanent sub-surface storage of CO 2, and the transport of CO 2 related to that. Onshore storage locations are not in the scope of the study. To analyse questions of infrastructure system behaviour, hypothetical representations of source and sink clusters have been developed and are described in more detail in chapter 4. Throughout the report, assumptions will be specified in more detail. -13-

14 2.2 Key assumptions & system boundaries The system boundaries for CO 2 transport are defined by the physical interfaces with the CO 2 source and sink. For this study, the compression of CO 2 at the site of the source is considered to be outside the CO 2 transport system boundaries. At the storage location, the transport system is bounded by the physical interface with the topside injection infrastructure at the site of the CO 2 sink. Figure 5 The influence of CO 2 source and storage on the two respective interfaces with CO 2 infrastructure, and the influence of boundary conditions for transport, as they are treated in this study. The table below describes the capture-transport interface and transport-storage interface. Table 2 Description of the interfaces of the transport infrastructure for CCS applied in this study. Interface with CO 2 capture Interface with CO 2 storage Physical location At the joint with CO 2 transport pipeline, At the fence of storage installation after CO 2 compression Conditions Liquid or dense phase Liquid or dense phase, load variations Pressure Dependent on transport modality, at the Not specified, storage site specific required level for transport and storage Temperature Dependent on transport modality, at the Not specified, storage site specific required level for transport and storage Chemical composition Dependent on allowable secondary constituents in the transport system Not specified, storage site specific -14-

15 In the first part of our analysis (chapter 3), the CCS chain is simplified by only describing the interfaces of transport with capture and with storage CO 2 source and capture assumptions The design and operation of CO 2 infrastructure is influenced by the specific conditions and variations in flow originating from the source of CO 2 and the capture technology deployed to capture it, which results in effects on the total amounts and instantaneous flow of CO 2 available for transport, dynamic changes in the CO 2 flow, and CO 2 composition. The targets and assumptions of the German government s 2010 Energy Concept (Energiekonzept der Bundesregierung 2010) and the 2011 paper on energy system transformation (Die Energiewende 2011) are used to determine the amount of CO 2 available for transport up to 2050, and for the intermediate years 2030 and 2040 because a large scale commercial use of CCS technology cannot be expected before The national emission inventory of Germany was used to determine the size and location of CO 2 point sources. This inventory is publicly available and includes the installations that fall under the EU Emission Trading Scheme (ETS). Only large individual point sources with an average annual CO 2 emission of 0.5 Mt/a and above are considered in the scope of this study. The current fossil energy mix i.e. the relative contributions of different fuels is assumed to be constant throughout the period to With the specific aim of describing the diversity in CO 2 flow and concentration at the capture-transport interface, a dedicated model was developed. The individual large point sources of CO 2 are assumed to originate from CO 2 capture from the following categories of sources, which cover the majority of current and future CO 2 emissions in Germany: - Pulverized Coal fired power plants (pulverized coal PC) - Integrated Coal Gasification Combined Cycle (IGCC) - Natural Gas Combined Cycles (NGCC) - Steel production facilities - Cement factories (clinker production) - Refinery processes producing pure CO 2 stream from gasification Each type of CO 2 source was combined with an appropriate capture technology. A variety of combinations was chosen, so that a realistic set of CO 2 sources and technologies is covered in this study. However, the study does not aim to cover each and every potential combination of CO 2 source and capture technology. This resulted in the following technologies for CO 2 capture: - for all combustion related CO 2 emissions an amine-type solvent capture processes is assumed (MEA with a concentration of 30 percent) for all CO 2 sources, except for the following: - for IGCC, a coal gasification process with a non-descript CO 2 capture technology is assumed - for the cement industry, an oxyfuel capture technology as described by ECRA is assumed - for refineries, a high purity CO 2 stream for an industrial gasification process is assumed. -15-

16 2.2.2 CO 2 transport assumptions The following assumptions were made regarding long-distance shipping and pipeline CO 2 transport: - CO 2 compositions were based on available literature, information provided by IZ Klima members and applicable legislation. - Constraints on maximum allowable secondary constituents for each component of the transport system will apply to the stream on the capture-transport interface. - Access and connection to the transport system will comply with German and other applicable legislation, and is assumed to be regulated by CO 2 quality amongst other aspects. - Dimensioning of the system is based on expected CO 2 availability described in the previous sub-chapter, without considering excess capacity. - External safety considerations are based on German legislation, industry best practice and standards CO 2 storage assumptions For the calculated relevant amount of CO 2 from German sources, the amount of available storage capacity is adequate and available at any time. This is a justified assumption, as the GeoCapacity project indicated that the total offshore storage capacity of Germany alone is in the range of 3,000 to 6,000Mt (GeoCapacity, 2009). The storage operators are assumed to translate their requirements into requirements upon flow and composition for the transport infrastructure. 2.3 CO 2 source boundary conditions In the next three sub-chapters, the boundary conditions are discussed in more detail. The boundary conditions at the transport infrastructure interfaces are affected by multiple factors including: the amount of CO 2, the conditions at the interface (pressure and temperature), and the composition of the CO 2 stream. These influences can have different origins, and can be split in the following parts: - Type of sources and capture technologies - Mixing of CO 2 streams from different sources - Variation in flow or composition of the CO 2 stream resulting from operational dynamics of the capture plant Type of source and capture technologies An individual source of CO 2 can have variation in flow over time, depending on the type of combustion process, chemical process, or otherwise. In addition, the amount of CO 2 can vary as a result of operational dynamics over time. Many combustion processes produce a flue gas containing a low CO 2 con- -16-

17 centration of between 3 and 15 vol%. Some industrial processes produce a more concentrated stream of CO 2. However, in many cases a captured stream requires treatment and conditioning to remove water and unwanted components in order to meet required specifications. In this study, it is assumed that conditioning takes place as part of the CO 2 capture activities and that a stream with overwhelmingly CO 2 remains. Conditioning of the CO 2 stream to the required transport specification mostly involves removing water. This removes part of the undesired secondary components. However, additional conditioning may be needed to arrive at acceptable compositions for transport and storage. In addition, to overcome pressure losses during transport of CO 2 through pipelines, a certain inlet pressure is required. The compression of CO 2 is considered part of the activities at the CO 2 source. The CO 2 composition plays a role in designing transport technologies in the CCS chain, and also when optimizing performance along the chain, and lastly when operating the chain. Dynamic changes in the CO 2 flow will occur over time as a result of operational decisions at e.g. a power plant producing under market conditions; these are discussed in chapter Current state-of-the-art capture technology is applied, and a diverse set CO 2 capture technologies is considered. The assumptions on power plants and CO 2 capture plants are found in chapter Mixing of CO 2 streams from different sources In this study, all individual sources and capture installations are assumed to deliver CO 2 at the required specification of the transport infrastructure. Conditioning, CO 2 compression, and other operation to ensure pressure, temperature and composition meet the requirements of the transport infrastructure are assumed to be the responsibility of the source. As such, CO 2 from different sources can be mixed in the transport infrastructure Influence of operational dynamics and RES A third way in which sources and capture influence CO 2 transport can be through dynamic variations in CO 2 flow. The amounts of CO 2 will vary with operating conditions and the influence of market dynamics. For industrial installation these variations are expected to be smaller than for power generation units. The effects of these variations, i.e. the impact on the resulting CO 2 flow and their relevance for the design and sizing of CO 2 infrastructure, are investigated further in chapter 3. The maximum flow rate encountered is assumed to be the leading parameter in establishing the capacity of the CO 2 infrastructure, assuming that all captured CO 2 can be transported at any given time from all sources. This assumption is subject to optimization, and will as such also be discussed in this study. -17-

18 For the operational load types, the minimum load and ramp-up and ramp-down times are chosen in accordance with the power generation technology (i.e. coal PC and IGCC or NGCC). A detailed analysis of the influence of part load, operational changes, and the influence of intermittent power generation (mainly from RES) is made, to explore the influence on the design and operation of CO 2 infrastructure. The main focus of this analysis is on the amount of CO 2 available over time for transport and storage, and on variations in the CO 2 concentration at the interface that result from the above-mentioned operational load type and influence of intermittent renewable electricity supply. 2.4 Transport boundary conditions The requirements for CO 2 entering the CO 2 transport infrastructure are a limited set of conditions dependent on modalities for transport. The following general transport boundary conditions and requirements are identified, and are detailed in chapter 5: - Main CO 2 characteristics for transport - Transport modalities - Routing and combining modalities - Composition of CO Storage boundary conditions The requirements of the storage site affect CO 2 transport infrastructure in a number of ways. The following key factors influencing the CO 2 transport infrastructure were identified: - Reservoir conditions - Injectivity constraints - Secondary constituents Reservoir conditions Selection of a suitable and sufficiently characterized CO 2 storage site is a major constraint, given that it defines the end-point of the CO 2 transport infrastructure. The specific reservoir conditions such as depth, pressure, temperature, porosity, etc. are important parameters that control CO 2 storage capacity and injectivity Injectivity constraints Injectivity loss and/or variability of CO 2 injection pressure directly impacts the CO 2 infrastructure design, either requiring more injection wells than originally planned or accepting lower overall injection rates for a given CO 2 transport infrastructure. -18-

19 Transport infrastructure designs should conform to wellbore design, injection well pressure and reservoir constraints and should include allowances for CO 2 injection variability. Injectivity can also be affected by other operational issues related to the integrity of the storage site as well as to the dynamics of storage, which are particularly related to CO 2 injection and geomechanical integrity Secondary constituents From the point of view of CO 2 storage, secondary constituents can have an influence: - High amounts of secondary constituents will use up valuable pore space that actually should be used for CO 2 storage. - Secondary constituents can also change the phase behaviour of the mixture significantly. Two-phase flow could cause problems during transport and injection, and needs to be avoided by special design, operational measurements, and settling of maximum secondary constituent fractions in the CO 2 stream. CO 2 storage presents a number of boundary conditions that need to be taken into account in the design of the transport infrastructure. The location and type of suitable storage reservoirs significantly impacts the transport system. Each storage reservoir imposes a set of limits on pressure, injectivity and composition. All storage reservoirs are different and pose different challenges to the transport system, which makes it difficult to present generic boundary conditions that are representative of all storage sites. Secondary constituents play a role in both the design and sizing of the transport and storage infrastructures, through 1) the impact on injectivity and transport capacity, 2) the possibility of two-phase behaviour of the mixture and 3) as well the energy required for CO 2 compression. Overall, the boundary conditions of a storage reservoir, apart from its location, mainly impact the injection facilities, and will presumably have a minimal impact on the transport infrastructure. -19-

20 3 CO 2 REDUCTION AND CCS IN GERMANY UP TO 2050 In this chapter the development of German industry and electricity sector CO 2 emissions is evaluated, considering the targets for emissions reduction, renewables share in the electricity mix and the reduction of energy use as specified by the German government in its Energy Concept (BMWi and BMU, 2011). A more detailed analysis with reference to underlying assumptions and sources can be found in the Appendix. 3.1 General assumptions on German CO 2 emissions towards 2050 In the Energy Concept, the German government aims to reduce CO 2 emissions in 2050 by 20 percent based on the overall emissions in The main contributions to the emission reductions are expected to come from the energy and the industrial sectors. Both sectors are also subject to targets for a minimum share of renewables as well as a reduction of overall energy use, as indicated in the table below. The targets and related reduction in CO 2 emissions are considered in the calculation of the annual CO 2 emissions by both sectors in 2030, 2040 and 2050 because a large scale commercial use of CCS technology cannot be expected before Table 3 Targets of the German government for overall GHG emission reduction, energy saving and renewables implementation 2. CO 2 reduction target (compared to 1990) Unit Germany total emissions % Energy sector (applies to industry and electricity) % Energy sector (applies to electricity) % RES share target RES share electricity consumption % RES share overall (primary energy, applies to industry sector) % Reduction of energy use in industry Reduction of primary energy use % compared to 2008, applies to industry Reduction of electricity demand Demand reduction electricity % CO 2 reduction for 2050 and all RES targets are based on the Energy Concept, with interpolation for years in between. -20-

21 Given the Energy Concept target above and the historic emissions and energy use, the allowable remaining emissions are calculated based on the above-mentioned targets, and then compared with the overall allowable CO 2 emissions for the previously mentioned years in order to determine the demand for CCS. Furthermore, the future role of CCS in meeting the emission reduction targets is assessed in detail: Given the historical emissions and reduction goals, the amount of CO 2 to be captured and transported is calculated. All targets are summarized in Table 3, and illustrated in Figure 6 and Figure 7. The electricity part of the energy sector is assumed to reduce emissions by 95 percent compared to 1990 levels and the industry sector by 80 percent. These values correspond to the upper (-95 percent) and lower (-80 percent) overall reduction goals of Germany up to It is assumed that the electricity sector will have to contribute above-average to the overall mitigation measures, since large-scale CO 2 sources exist that make it easier to capture more economically large amounts of CO 2 than is possible with small-scale scattered sources. Figure 6 Renewables in industry and power generation (% of final energy use Endenergieverbrauch in German). -21-

22 Figure 7 Development of energy demand in industry and electricity demand (German government s goals until 2050, with 2008 =100). Energy use values from 1990 to 2008 are not historic values but indicate the level of energy use in The German goals up to 2050 were used to determine the development of the annual German CO 2 emissions up to The following assumptions were made for this report: - The development of the energy sector and the industrial sector in Germany up to 2050 is in line with energy system transformation (Energiewende) and the German government s 2010 Energy Concept (Energiekonzept) (Bundesregierung, 2010). - Import and export of electricity are not included in this analysis, even though net import and export is assumed for 2050 in the Energy Concept. - The CO 2 emissions attributable to electricity production in 2050 are reduced by 95 percent from the 1990 baseline. - Specific intermediate targets are not available in the Energy Concept document for all sectors; here, a linear interpolation from is assumed. - The yearly average contribution of RES in the total electricity consumption has a target of 80 percent in 2050, with specific targets for intermediate years. - The relative share of electricity from fossil power stations stays constant with respect to Nuclear power is assumed to be phased out in Germany by the end of The yearly average share of RES in gross primary energy use is assumed to also apply to the industry sector with targets for intermediate years. The background is that switching to renewable fuels for industries is even harder than for the electricity sector. Significant portions of industrial CO 2 emissions are process emissions that originate from chemical transformations other than combustion. -22-

23 - CO 2 emissions from industry and energy are assumed to be directly related 1:1 to the associated emissions of primary energy use, meaning that 50 percent energy savings in electricity demand and 25 percent reduction in energy use in industry leads to a 50 percent and 25 percent reduction of CO 2 emissions, respectively. This assumption is supported by the previously stated assumptions of a constant production mix for electricity from fossil fuels and the use of current state-of-the-art technology up to The definition of energy use in industry includes the local production of electricity for own use (using on-site electricity generation such as steam turbines). More renewable primary energy use in industry also results in more renewable electricity supply (RES). In this respect, an overlap may exist that is not included in the calculations. 3.2 Target CO 2 emissions up to 2050 Taking into account the overall emission reduction target for each sector and applying these to the reported emissions for the year 1990, the maximum allowable emissions given the goals set by the German government can be calculated for the period up to Historical and targeted emissions (with the 95 percent reduction target for the energy sector) are listed in Table 4. Table 4 Historical and targeted CO 2 emissions for Germany*. Historical Targeted (based on Energiekonzept) Unit Electricity sector Mt/a Industry sector Mt/a total electricity and industry Mt/a total for Germany Mt/a * The historical actual emissions of CO 2 are those reported by the German Federal Environment Agency (Umweltbundesamt, UBA) for the national emission inventory (UBA, 2012) and include the emissions for fuel combustion in the energy industries and manufacturing industries and construction, while excluding transport and other emission categories. Industrial emissions from mineral products, chemical industry and metal production are added to the emissions of manufacturing industries and construction. Other greenhouse gas emissions are excluded, as these do not qualify for CCS. -23-

24 Figure 8 Historical and targeted CO 2 emissions for Germany and the electricity and industry sectors, based on the German government s targets (Gt CO 2 /a) (From top to bottom, the total German emissions, the combined and individual emissions for the electricity and industry sectors. The vertical arrows indicate the total targeted CO 2 emission reduction (blue) and the reduction target for electricity and industry (green) in 2050.) In Appendix A, more information is presented on the background and assumptions for the calculation of the CO 2 emissions in Germany up to The role of CCS in reaching the reduction goals In sub-chapter 3.2 the maximum allowable CO 2 emissions for the year 2050 were determined. By applying the renewables target (RES making up 80 percent of electricity generation in 2050) as well as the energy saving target (50 percent primary energy use in industry and 25 percent of electricity demand compared to 2008) to the reported emissions in the respective reference year, the actual emissions for 2050 can be calculated Scenario for CCS in 2050 In Table 5 the targeted and remaining emissions are compared. The targeted emissions are calculated assuming a 95 percent emission reduction target for the energy sector. The remaining are deduced by applying the reduction effects of RES, energy saving and demand reduction compared to 1990 emissions. -24-

25 Table 5 Gap between targeted and actual CO 2 emissions up to Unit Remaining emissions CO 2, electricity Mt/a Remaining emissions CO 2, industry Mt/a Total remaining emissions, electricity + industry sector Mt/a Targeted emissions, electricity sector Mt/a Targeted emissions industry Mt/a Targeted emissions, electricity + industry sector Mt/a These results show that fulfilling the German government s targets for renewables and energy savings alone without further CO 2 abatement would not achieve the government goals for CO 2 emission reduction up to Thus, CCS can play a crucial role for both the energy and industrial sector in realizing these goals. Figure 9 Historical and projected CO 2 emissions for Germany, based on the German government s targets necessary contribution of CCS to attainment of CO 2 emission reduction targets for industry and energy (Mt CO 2 /a). However, not all sources are suitable for CCS. As discussed, a minimum threshold for sources of 0.5Mt CO 2 /a is assumed for the further analysis of the transport infrastructure. The verified emissions traded for German installations, as stated in the EU Climate Action database, were used to select the installations with a larger annual emission than 0.5 Mt/a. This was the case for 93.3 percent of the applicable emissions in that database, which covered 80 percent of the industry and electricity sector CO 2 emissions as reported by UBA. This can be explained by CO 2 emissions from installations not taking part in ETS. The share of installations below the 0.5 Mt/a threshold for CO 2 capture and transport is divided evenly over industry & electricity. -25-

26 Finally, not all CO 2 sources may need to be equipped with CO 2 capture and connected to the CO 2 infrastructure. From the results it can be concluded that the CO 2 reduction target up to 2050 can also be met in the event that CCS is applied to part of the sources, which will become clear in chapter 4. Therefore, in this approach, the amount of CO 2 captured from industry and electricity sectors was varied to achieve the emissions target. Table 5 summarizes the results of the amounts for CO 2 to be captured from each sector to achieve the CO 2 emission targets in the period up to Table 6 CO 2 to be captured by each sector to achieve the German CO 2 emission targets. Unit Electricity sector Mt/a Industry sector Mt/a Total electricity + industry sectors Mt/a In Table 6, the amounts of CO 2 to be captured and transported for both the electricity and industrial sectors in total and for each sector are shown that follow from the Energy Concept and several additional assumptions for this report. In the remainder of the report, we use rounded values: 30, 40 and 60Mt/a. The definition of industrial energy demand includes own electricity use (e.g. demand of steam turbines at industrial installations and power generation from industrially produced fuels). This analysis shows the combined CO 2 amounts from power and industry that must be captured to meet the targets of the Energy Concept. 3.4 Findings on CO 2 emissions and CCS potential in Germany Based on the analysis of CO 2 sources and the role of CCS in achieving the German Government targets up to 2050 it is concluded: - Even if the goals set by the German federal government on energy saving, demand reduction, renewables and the phase-out of nuclear power in the electricity sector as specified in the Energy Concept and energy system transformation are met, the overall CO 2 emission reduction target cannot be reached for Germany without resorting to other options. - Large-scale implementation of CCS in industry and the electricity sector can make a significant contribution to meeting the targets by possibly lowering CO 2 emissions by 60 Mt/a in The contribution to emissions reductions by CCS in the electricity versus the industrial sector will be subject to cost optimization. Therefore, the size of these contributions has a high level of uncertainty. - This analysis results in the amounts of CO 2 to be captured from power and industry combined, that are in line with the Energy Concept targets and assumptions. For the individual sectors, the CCS challenges differ from source to source, many initiatives are already in development, and the sectors differ in the amount of available alternatives. -26-

27 - When the key Energiewende assumptions for amount of RES, energy savings, and demand reduction are not met, more CO 2 needs to be captured to reach the German reduction goals. In this case the total contribution of CCS must be larger than is found in this analysis; CCS is a technology that can be implemented on a larger scale than described in this study. The amounts of CO 2 to be captured according to the analysis of this chapter are given in Table 7: Table 7: Amounts of CO 2 that must be captured based on the targets given in the Energy Concept of the German government. Year Mt/a

28 4 SIZING OF A CO 2 TRANSPORT INFRASTRUCTURE In the previous chapter, the development of CO 2 emissions in Germany given the German government s goals for 2050 were analysed and discussed, and a requirement of approximately 60 Mt/a CO 2 for capture, transport and storage in 2050 was identified. The requirements for CO 2 infrastructure proposed in this study are based on the amounts of CO 2 to be captured in the years until 2050, as indicated in Table 6, and the corresponding maximum flows. In this chapter, typical categories of point sources were combined and summarized in clusters. Three clusters were defined, with different amounts and combinations of point sources. By representing groups of point sources of different types, a realistic picture can be made that allows exploration of the size of infrastructure in Germany. As the industry and power generation activities can have production profiles that vary with time, the CO 2 output can vary with time as well. These are essential inputs for the design of the CO 2 transport infrastructure because they influence the sizing of the infrastructure in two ways: 1. The maximum transport capacity of the infrastructure is the upper limit of CO 2 that can enter the infrastructure at a given time. Allowing all units that are connected to supply at their maximum operating capacity, would ensure that transport capacity is not a limiting factor for capturing CO Whenever a CO 2 source does not supply CO 2, the transport infrastructure is underutilized. When addressing variation in supply of CO 2 to a transport infrastructure, there are many uncertainties related to the size of the flow of CO 2 and its variation in time that can be expected from the point sources. In this study, a model with clusters of point sources was developed to investigate these variations and their influence on the sizing and design of CO 2 transport infrastructure in a bottom-up manner. The numbers of point sources in a proposed cluster represent what is currently encountered in Germany (UBA, 2012). This is done by simulating the impact of different kinds of factors on the CO 2 production profiles of the cluster. The data and results of this model are generic and state-of-the-art technology; results are aggregated to the level of clusters to allow for a generic description of the CO 2 sources and their influence on transportation infrastructure in Germany in The use of this model is limited to the intended purpose: to investigate the effects of variations in individual sources on infrastructure sizing. The cluster approach results in three typical clusters of CO 2 sources. No reference is made to individual installations or the geographical spread of sources and sinks for CCS in this simulation. As a result, the CO 2 flow profile is determined for each cluster. The resulting three profiles are used as a basis for infrastructure capacity calculations in chapter

29 4.1 Approach A significant number of unknowns exist when considering the German power plant stock and industry in 2050, and their CO 2 emissions. The operational regimes and how these may be influenced by intermittency caused by renewable power generation are unknown for the stock of power plants in The transport capacity, and the amount of infrastructure required for the 2050 goals are influenced by this uncertainty, since more variation in flow means a lower average transport flow, and a larger CO 2 infrastructure (larger maximum capacity or more connections). However, since the details for 2050 are not known to the level needed for such an analysis, this is tackled by exploring the emissions and CO 2 that can be captured and transported using abstract clusters, which do not refer to specific installations or locations thereof. We have assessed the impacts based on currently known conditions, both for operational and influence of intermittency from renewable power generation, and using realistic and consistent operational data for power generation and industry. Thereby, the impact of multiple effects is investigated and explored in a way that can be seen as representative of likely variations in flow and concentration that can occur up to This analysis is limited to investigating effects on flow and CO 2 supplied into the transport infrastructure, with the aim of exploring effects on the design thereof, and is not intended to be used for other purposes. The following effects are explored: - Variations in flow and concentration - Effects of combining CO 2 streams from different types of sources - Influence of operational modes and minimum load level of power plants and industry installations - Effects of the intermittent character of RES and the share of RES in power generation. For many of these influences, the effects are investigated using an Excel-based model that describes the variations in CO 2 flow and concentration for a pre-defined set of CO 2 sources. The sources are equipped with CO 2 conditioning and compression, and the composition and size of the CO 2 stream is based on state-of-the-art technology for both power plant and CO 2 capture technologies. 4.2 CO 2 sources and capture technologies The model developed for this study illustrates source specific aspects such as varying amounts and concentrations of CO 2 captured from different types of power plants and industrial installations for a cluster of sources. The types of sources considered, their operational mode and their susceptibility to intermittency of renewable electricity are presented in the following paragraphs. All assumptions are in line with the conditions described in chapter 2. Table 8 presents the general assumptions on the point sources with respect to size, efficiency, CO 2 production rate and secondary constituents as used in the model. -29-

30 Table 8 Characteristics of the point sources, at the capture/transport interface, including compression and conditioning. Unit Coal PC Lignite PC NG CC Lignite IGCC Cement Steel Refining Power out net MW NA NA NA Electrical efficiency % NA NA NA CO 2 -flow, to capture kg/s CO 2 concentration %mol Flue gas flow full load kg/s NA Capture type amine amine amine selexol oxy-fuel amine none Capture rate % (1) 90 (1) CO 2 -rich flow rate kg/s Notes: 3 The power generation efficiencies in the model are state-of-the-art as it is assumed that up to 2050 all power plants are going to be rebuilt and equipped with newest technology. For the remainder of the study, no distinction is made between hard coal and lignite sources; both are presented as coal. 3 PC = Pulverized Coal; NG CC = Natural Gas Combined Cycle; IGCC = Integrated Gasification Combined Cycle. -30-

31 4.2.1 Operational mode of the point sources and RES The amounts of CO 2 vary with the operating conditions and market dynamics. On the one hand, the operational mode of the power plant itself (full load or part load) determines the power output and the respective CO 2 production. This is illustrated in Figure 10. Figure 10 Impact of the different operational modes used in the model on the CO2 output pro. file for traditional operation of fossil power stations, for illustration. On the other hand, external factors, especially the integration of fluctuating renewable power, have an impact on CO 2 production. According to German legislation, feed-in of power from renewable sources has preference in the merit order. As a result, conventional power plants such as coal-fired and gasfired plants produce less power and thus, less CO 2 Figure 11 illustrates the impact of the different types of RES on the CO 2 output profile of a coal-fired power plant in full load operational mode. -31-

32 Figure 11 Impact of RES on CO 2 output (model result for illustration) with realistic variations in PV and wind renewable load, influencing the load of one coal-fired power plant in full load operational mode. The following table summarizes the information on the types of point sources, their assumed operational mode as well as their susceptibility to the intermittency of renewables used in the model. Table 9 Sources of CO 2 considered in this study by type, the operational loads that can occur in the model, and whether influence of intermittent power generation is optional in the model. CO 2 source type + capture technology [combination] Operational load type (s) Influenced by intermittent RES [Y/N] Coal + amine solvent Full load or Week/ Weekend Y IGCC including CO 2 capture Full load or Week/ Weekend Y NGCC + amine solvent Day/ Night Y Steel + amine solvent Full load N Cement + oxyfuel Full load N Refinery pure CO 2 stream Full load N For the operational load types, the minimum load and ramp-up and ramp-down times are chosen in accordance with the power generation technology (i.e. coal or NGCC). -32-

33 When considering the actual CO 2 production at the sources that is emitted and potentially captured, the following variation can be identified: - Daily and weekly variations in CO 2 resulting from operations decisions for dispatch of power generation amongst the assets. The daily variations are modelled and seasonal variations are not considered in the model. - Daily variations resulting from (more short-term) operational decisions as a result of the unpredictable nature of electricity supplied from renewable resources such as wind and solar. - Variations resulting from portfolio and market dynamics due to market optimization by individual parties in the electricity and CO 2 markets are not included in the modelling or analysis for this study. These variations were modelled, assuming that the deployment of (part of) the fossil generation assets is influenced by RES supply, resulting in a temporarily lower deployment, and thus less CO 2 available for CCS. The impact of a representative week scale is extrapolated to a cumulative annual amount of CO 2 captured for each cluster. RES influence is taken with a realistic worst-case assumption from inhouse available sources that apply to Germany. In-house data covers a period of one week with values for every 20-minute for PV and onshore and offshore wind power. The worst-case assumptions include data for a week with significant and rapid changes in wind and PV power supply in relation to the total supply. The week that represents the worst-case situation is chosen based on two criteria: 1. large variation in power output throughout the week (longer periods with strong and low wind in one week, and for solar: days with maximum power output, and 2. having days with large and rapid changes in power output. The selected weeks have a power output that is high compared to average for the specific region selected. The average power output for the selected weeks is, in percent of the average annual power output: 164 percent for wind and 200 percent for PV. This reflects the worst case nature of the cases, and is based on historical occurrence for wind and solar individually. 4.3 Clustering of point sources The deployment of CCS on a bigger scale with the use of off-shore storage sites requires large investments in the transportation infrastructure. Clustering of CO 2 sources to a local transport network results in economies of scale for CO 2 transport. -33-

34 Interface with CO 2 infrastructure Figure 12 Generic scheme showing the sources of CO 2, the collection infrastructure and the interface with long-distance transportation infrastructure. In the local CO 2 transportation network, CO 2 streams of several point sources featuring different operational modes may be combined; Figure 13 gives an example of a combined CO 2 output stream from a combination of power plants, each with 3 different operational modes, being full load, week/weekend, and an industrial source at full load. Figure 13 Impact of combination of units with different operational modes (full load, day/night, week/weekend and 1 industry full load). -34-

35 For this study, three clusters were defined representing realistic German settings of large point sources for power generation and industry with distinctly different characteristics of CO 2 infrastructure. The following cluster scenarios were analysed: - Cluster I High concentration of industrial and power sources - Cluster II Centralized power generation only - Cluster III Scattered industrial sources and power plants The clusters illustrate the diversity of CO 2 sources and output profiles at the interface with the longdistance transportation infrastructure. Every cluster features a unique set of sources, required collection networks and other infrastructure as well as variation in flow and CO 2 composition Cluster I High concentration of industrial and power sources Cluster I is a representation of a highly industrialized area with large energy demand. It features several large power plants as well as multiple industrial sources at relatively short distance to each other. In Table 10 the assumptions on the number and characteristics of the point sources in this cluster are listed. Table 10 Assumptions on point sources of cluster I 4. Point Source Number of units Operationale load type Influence by intermittency Coal + amine solvent 6 Full load Y IGCC including CO 2 capture 3 Full load Y NGCC + amine solvent 3 Day / Night Y Steel + amine solvent 7 Full load N Cement + oxyfuel 5 Full load N Refinery pure CO 2 stream 1 Full load N Except for the natural gas fired power plants, all point sources operate in full load mode for this cluster. 4 Coal = Hard coal or lignite Pulverized Coal; IGCC = Integrated Gasification Combined Cycle; NGCC = Natural Gas Combined Cycle -35-

36 4.3.2 Cluster II Centralized power generation only Cluster II represents a less industrialized region with a central power supply. It comprises a few large coal-fired power plants and no industrial point sources. This cluster is expected to be highly impacted by the intermittency of renewables. Table 11 Assumptions on point sources of cluster II. Point Source Number of units Operationale load type Influence by intermittency Coal + amine solvent 4 Week / Weekend Y IGCC including CO 2 capture NGCC + amine solvent -. - Steel + amine solvent -. - Cement + oxyfuel Refinery pure CO 2 stream Cluster III Scattered industrial sources and power plants Cluster III features scattered industrial installations and power stations at relatively long distances to each other. Most of the power plants are coal-fired. Table 12 Assumptions on point sources of cluster III. Point Source Number of units Operationale load type Influence by intermittency Coal + amine solvent 5 Day / Night Y IGCC including CO 2 capture 1 Full load Y NGCC + amine solvent 1 Day / Night Y Steel + amine solvent 1 Full load N Cement + oxyfuel 7 Full load N Refinery pure CO 2 -stream 1 Full load N 4.4 Analysis of the CO 2 available for transport The model calculated the CO 2 production profile of the clusters at the interface with the long-distance transport infrastructure. The operational modes and influences of intermittency are illustrated for Cluster I, and results are shown for the 3 clusters above, followed by a sensitivity analysis using several cases to further explore the effects of variations in operation and resulting from renewable power generation. -36-

37 4.4.1 Results: variations in CO 2 output flow The results that include the influence of RES on variations in flow are presented in Figure 14. Figure 14 CO 2 flow profiles of the Clusters I, II & III, with the coloured bars indicating the range of flow rates of the CO 2 entering the transport infrastructure (modelling result). It is assumed that the transport infrastructure takes in all CO 2 produced at any time. The flow ranges from Clusters I, II and III are, respectively, ; and kg/s. Cluster I produces 35.9Mt CO 2 annually. The results in the figure above for Cluster I are a combination of basically the following elements: - The CO 2 from fossil power plants operating is influenced by operational patterns, with base load operation for some types of power stations. - Variation resulting from operational changes during the day and/or week, with a steep rampup and ramp-down matching the respective capabilities of the power generation technology. - The CO 2 output from fossil power generation sources is limited by electricity generation from intermittent renewable power. The emissions from industrial installations are not influenced by variations of wind or solar intermittent power, and cover around percent of the total CO 2 available for transport in Cluster I. -37-

38 For the other Clusters, the impact of intermittency is different, because of the type and amount of industry sources, which lead to the following key characteristics: - The CO 2 flow profile of Cluster II differs significantly from Cluster I. The strong impact of RES is clear for this cluster, as it features large and abrupt fluctuations of the production rate between the minimum and maximum flow rate of 250 and 650 kg/s, respectively. The annual CO 2 production of this cluster is 11.7Mt. The influence of intermittency for Cluster II can be considered large. - The available CO 2 for transport in Cluster III is characterized by an irregular pattern with relatively stable production rates over a longer time on the one hand (week/weekend modus of the coal-fired power plants) and steep changes on the other hand. The production rate fluctuates between 500 and kg/s. - The overall annual production of this Cluster (III) amounts to 22Mt of CO 2. The impact of the intermittency of RES on cluster III can be seen as significant Results: variations in CO 2 concentration The available CO 2 for transport in Cluster III is characterized by an irregular pattern with relatively stable production rates over a longer time on the one hand (week/weekend modus of the coal-fired power plants) and steep changes on the other hand. The production rate fluctuates between 500 and kg/s in Cluster III. With regard to the concentration of CO 2 available for transport in a transport infrastructure, the following case was explored: In Cluster I, most of the chosen sources deliver a CO 2 rich stream at or around 99 mol% of CO 2, except for the specific oxyfuel technology applied to the clinker process in the cement industry which has a lower CO 2 concentration of approximately 90 mol%. Variations in composition of CO 2 are dampened out significantly by industry and to some extent also by base load operation of fossil power plants. Another example is that in Cluster I, the CO 2 content of the combined flow of CO 2 was around 95 percent in the worst case, even though the deviating source supplied almost half of the industry CO 2 emissions in that cluster. This shows the effect of diluting that takes place when mixing streams. If oxyfuel would be included, issues of mixing different CO 2 streams can become more relevant if the composition is beyond the specification that is allowed in the transport infrastructure. This illustrates the need for all streams to be on specified entrance composition, even though secondary constituents can be diluted by mixing of smaller with larger CO 2 streams in the infrastructure to avoid non-compliance to network requirements at all times and throughout the infrastructure. -38-

39 4.5 Sensitivity analysis for the annual amounts of captured CO 2 In order to assess the sensitivity of the cluster s CO 2 output towards certain parameters, a sensitivity analysis was carried out for Cluster I. The following parameters were taken into account: - Minimum load, the minimum operating load during day/night type of operation is changed - Influence of operating hours, by changing the operational type (to Week/Weekend or Day/Night). Effect of increasing share of intermittent RES with 50 percent - Effect of decreasing share of intermittent RES with 50 percent - Influence of operational modes. The results are compared to the base case and listed in Figure 15. Figure 15 Influence on CO 2 available for transport in Cluster I. The analysis shows the highest impact is for the case that no industrial emissions are captured from Cluster I. This is not surprising given that industrial sources are responsible for half of the annual CO 2 in this cluster; nevertheless this reflects currently observed clusters of sources in German. The variation of the operational mode of the coal- and gas-fired power plants in the cluster would lower the amount of CO 2 by 8-15 percent. Significantly higher amounts of CO 2 would need to be captured and transported from the cluster if the impact of RES would be lower; the case that the impact is 50 percent of the base case, the CO 2 amount increases by 11 percent and if no RES influence occurred, the increase would be 30 percent. -39-

40 Regarding the influence of intermittency due to wind and solar power generation, the three bottom bars in Figure 15 indicate the following: - Without the influence of RES, the total emissions would be significantly higher. - The intermittency caused by wind is much larger compared to that of solar power generation. Wind and solar are intermittent in a different way. Solar power has a day-night rhythm, so it partly coincides with electricity demand fluctuations. For wind, this is not the case. Therefore, intermittency of wind power requires larger fossil-power backup capacity than intermittency of solar power. This effect also influences the CO 2 capture profile. This illustrates the complex interaction of intermittency with the CO 2 flow that has to be transported. Except for the case without industry emissions, none of the analysed parameters will influence the maximum production rate of CO 2 from the cluster. This means that if the maximum CO 2 flow from the cluster is taken as the design capacity of the infrastructure, all captured CO 2 can be transported. If e.g. the CO 2 infrastructure is sized at a 20 percent lower design capacity, not all CO 2 can be transported from all connected point sources. As an indication, for the shown week in Cluster I this would lead to a higher utilization of the infrastructure, however also to a lower annual capture amount (33 Mt/a instead of 36 Mt/a) and 7-8 percent of the CO 2 available for transport is then not transported due to capacity limitations. Due to the unpredictable nature of RES intermittency this is likely to apply and could result in venting of CO 2 that has already been captured. Whether this is economic needs to be evaluated on a case by case basis. The annual amount of CO 2 captured and transported changes significantly. Especially the intermittency of RES and the operational mode of the power plants are important variables in this context as they are difficult to predict and/or change with the requirements of the future energy system. The utilization rate may play a role when determining the tariffs for the use of the transport of CO 2, and is likely to be subject to optimizing on capacity. The year round availability of all connected sources and the related maximum capacity on the level of clusters of sources is a discerning factor in sizing CO 2 transport infrastructure. -40-

41 4.6 Comparison of clusters and conclusions When comparing the different CO 2 flow rates and composition profiles using the cluster approach, the following can be concluded: - In all cases there is a certain base flow present that ranges between approximately 40 and 65 percent of the maximum CO 2 flow available for transport. - In order to transport all of the available CO 2 at all times from a cluster of sources, sizing the infrastructure at the maximum flow of CO 2 is required. - If the utilization of the infrastructure needs to be higher and CO 2 sources have an intermittent profile, then more sources need to be equipped with CCS technology to capture a given amount of CO 2. - The presence of industrial sources in a cluster helps to smooth the fluctuations of the CO 2 flow rate at the interface with the long-distance CO 2 transport, due to their relatively small variations in flow. This affects the steepness of the changes as well as the relative difference between minimum and maximum flow. Power sources and their susceptibility to the intermittency of renewable sources are responsible for the steep changes and peaks in the CO 2 flow available for transport. The analysis shows a large difference in flow resulting from variation over time can be expected from e.g. RES intermittency or other rapid fluctuations in the CO 2 production of sources connected to the CO 2 infrastructure. This has an impact on the infrastructure in the following manners: - Large differences between maximum and minimum flow per cluster require a higher total capacity of sources to be connected for the same annual outflow of CO 2. - Frequent occurrence of rapid variations in flow rate lead to more CO 2 sources needing to be equipped and connected to the transport infrastructure to result in the same flow that is ultimately transported, compared to a set of sources with a relatively higher and more constant relative flow rate. Generally speaking, when more power sources with large CO 2 production are interconnected in a cluster, the design and operation of the collection and transportation infrastructure will be more challenging. However, all clusters are likely to face similar challenges and the combined CO 2 production profile is flatter in clusters with more sources. The clusters behave in a similar manner and are therefore assumed to be comparable and scalable. How CO 2 flow profiles affect the design and operation of CO 2 infrastructure is analysed in the next chapters. -41-

42 5 TECHNICAL REQUIREMENTS FOR CO 2 INFRASTRUCTURE In the previous chapters the boundary conditions for CO 2 transport are clarified, and an assessment is made of the total volume of CO 2 to be captured in Germany up to Finally the concept of clusters is introduced and applied in order, among other things, to illustrate the dynamics that can be involved in capturing CO 2 from operational power plants. In this chapter, we proceed with a general discussion of technical requirements for CO 2 infrastructure. It is important to note that CO 2 transport facilities have many aspects in common with other transport infrastructures, such as natural gas transportation and LNG shipping. Therefore, for all the specific challenges related to CO 2, the implementation of CO 2 transport will benefit from the knowledge, experience, standards and practices of related fields. CO 2 transport itself has been implemented on a large scale in the US (mostly from natural sources and for EOR processes) and in several other regions (IPCC, 2005). For building and operating a CO 2 transport infrastructure in Germany the experience gathered in the US may provide a basis for the specific German application of CO 2 transport. Sizing and design of a CO 2 transport infrastructure are heavily influenced by the composition, pressure and temperature of the CO 2 to be transported. To come to an optimal design, several engineering and design steps need to be taken. At different stages of this process ever more detailed descriptions will be required to finally come to a design on which the construction can be based. In this chapter we focus on the design on a functional level and in the next chapters the two types of transport infrastructure will be discussed on a conceptual level. A CO 2 transport infrastructure can be described on a basic level with the following statements: - The fluid to be transported is CO 2 with a low portion of secondary constituents. The composition of the CO 2 needs to be defined using a specification that stipulates the conditions for access from point sources. - The infrastructure requires energy to transport the CO 2 from the point source(s) to the sink(s). - The infrastructure needs to adhere to certain standards with regard to safety and reliability. - The transport infrastructure is part of a complex system that is subject to optimization at an integrated level. Transport infrastructure requirements need to be considered within the context of system integration. -42-

43 Within this chapter no distinction is made between the origins or types of installations that form the sources of the CO 2. All CO 2 streams that cross the interface of CO 2 capture and transport are defined by their composition, flow and other relevant aspects, irrespective of their origin. In this chapter, the assumptions and boundary condition from the storage site of CO 2 apply, as discussed in chapter 2. This results in the following main aspects that are relevant for the CO 2 transport infrastructure up to The storage sites are located in the North Sea. - There is ample storage capacity offshore for storing the projected amounts of CO 2 to be captured in Germany till The storage sites are accessible by all modi of transport. In the following sub-chapters, requirements for CO 2 infrastructure are discussed and remaining technical challenges are identified. Regarding CO 2 transport by pipelines, a good overview of the state-ofthe-art is given in the 2012 book Pipeline Transportation of Carbon Dioxide Containing Impurities (Mohitpour M. et al., 2012). Shipping is discussed extensively in a report made on behalf of the Global CCS Institute: CO 2 Liquid Logistics Shipping Concept (Vermeulen, 2011). 5.1 Main CO 2 characteristics for transport The starting point for determining a suitable mode for transporting CO 2 is the set of characteristics of the CO 2 stream (including secondary constituents), as this determines the specific properties of the CO 2 to be transported. The phase diagram (Figure 16) shows the phases of CO 2 at different temperatures and pressures. CO 2 is generally transported in liquid or dense phase. In principle, it is possible to transport it in solid phase, i.e. as dry ice, but this requires much more energy than the other available options (IPCC, 2005). The remaining usual transport-condition options are displayed as coloured blocks in Figure

44 Figure 16 CO 2 phase diagram (adapted from ChemicaLogic, 1999). CO 2 can be transported as a cryogenic liquid (light blue), in the dense or liquid phase (dark blue) or as a gas or Vapour (green). In transporting CO 2, the compressibility and viscosity play a role, besides the above-mentioned relationships between pressure temperature and phase. Compressibility varies significantly with phase and decreases from Vapour to dense phase to liquid phase. Pressure, temperature and composition influence the compressibility as well. CO 2 streams with low compressibility are compressed with less energy requirements. This is of importance when optimizing for operational situations. The density is directly related to the capacity of a given CO 2 transport infrastructure. Vapour phase transport has significantly lower density compared to dense phase and liquid phase transport. Temperature and pressure influence density, as well as composition of the CO 2 stream. See table below for generic conditions for CO 2 transport at various phases. Density can vary within a transport infrastructure, e.g. due to heat transfer along the pipeline or pressure variations due to altitude changes in the run of the pipeline. -44-

45 Table 13 Typical conditions encountered in CO 2 transport in different phases. Vapour Dense phase Liquid phase (cryogenic) Pressure Up to 38 bar 73 bar or more 7 -~20 bar Temperature Around 8 C variable -50 C ~ -20 C Concluding, transport infrastructure is significantly different in capacity and also technology for various transport options. There are differences with respect to characteristics such as phase, operating temperature and pressure, technology applied, materials used, energy requirements, capacity, and ability to be scaled up. 5.2 Transport modalities CO 2 transport may be done using a variety of different systems. In this sub-chapter, we limit the further discussion on transport modalities to those applicable to the scope of this study, i.e. transporting dozens of megatons of CO 2. The choice of a transport system depends on a number of parameters. These include transport capacity, distance between the source and the storage location, availability of suitable waterways or pipeline routes and location of the storage site. CO 2 transport may be done using pipelines, ships, trucks and trains. However, for the large-scale storage of CO 2 considered in this study, large logistic systems are required. Because of the scale, transport by trucks and trains would be prohibitively expensive. (Svensson, Odenberger, Johnsson, & Strömberg, 2004) (Mohitpour M. et al., 2012). Vapour phase transport is unfeasible in most foreseeable cases due to the lower density of the transported medium and the resulting limited mass flow (Mohitpour M. et al., 2012). Concluding, for the mass flows and distances of CO 2 transport foreseen in Germany, Vapour phase transport is considered unsuitable. Therefore, the transport systems analysed in this study are the following: - Offshore pipelines - Onshore pipelines - Transport of liquefied CO 2 by barges - Transport of liquefied CO 2 via CO 2 carriers over sea -45-

46 5.3 Routing and combining modalities The possible routes for CO 2 transportation from source to sink are presented in Figure 17. Figure 17 Possible routes and combinations of modalities (adapted from Vermeulen, 2011). Initial conditioning and compression is assumed to be part of the CO 2 sources. The CO 2 transportation chain consists of several components starting at the different CO 2 point sources up to the storage sites. The chain components for CO 2 transportation through pipelines and ships are presented in the following sub-chapters, after a general discussion on CO 2 quality. 5.4 Composition of transported CO 2 One of the major topics of discussion about CO 2 transport is the influence of secondary constituents. Because of the fact that captured CO 2 does not solely consist of CO 2, but can also contain various secondary constituents, the question arises which composition specification would be set in a specific transport system. This question cannot be answered conclusively in this study. However, the composition-related issues will be described in their context. The issues arise on multiple levels, such as: - System design - Operations - Asset integrity - Health, safety & environment. To limit the adverse effects, captured CO 2 may be purified after capture. There is a trade-off to be made between allowing low levels of secondary constituents in the transport system, removal of which -46-

47 requires costly measures at the capture sites, and allowing higher levels, which could result in added costs of the transport system. CO 2 quality refers to the composition of the CO 2 stream. For CO 2 transport by pipeline or ship, no detailed authoritative composition specification has been determined yet, although the DVGW is preparing a guidance document on this matter. Current CO 2 transport operators all use their own specifications, in which they take into account all limitations that apply to their specific situation (IPCC, 2005). Restrictions on the presence or concentration of specific components can be imposed for the following different reasons: - Thermodynamic behaviour: secondary constituents within the CO 2 stream influence the phase transition line and other thermodynamic properties, such as heat capacity, density etc. The size and nature of the effects are determined by the type of component, and can lead to significant limitations in e.g. the transport capacity of CO 2 infrastructure, increase the required compression energy or influence the required wall thickness of pipelines. - To prevent corrosion: mainly by limiting the water concentration. These topics are discussed in the sub-chapters below. All three topics present different reasons for limiting components entering a transport infrastructure. The water restrictions apply to both pipeline and ship-based infrastructure. In a shipping infrastructure, a thorough dehydration will be part of the conditioning process before liquefaction, because the liquefier is vulnerable to freezing water (Vermeulen, 2011) Thermodynamic behaviour If other components are included in the CO 2 stream, the thermodynamic properties will change and will clearly influence the transport and storage processes (De Visser, 2008; Anheden et al., 2005). When dense phase CO 2 is mixed with small amounts of these secondary constituents, generally, a homogeneous mixture is formed, but its thermodynamic behaviour is strongly influenced by these secondary constituents. The presence of secondary constituents can limit the capacity of the pipeline. Non-condensable gases affect the thermodynamic behaviour of the CO 2 mixture, of which Ar, CH 4, H 2, N 2 and O 2 are examples. The effect on pipeline capacity is limited, but can in extreme cases amount to a 25 percent capacity reduction. Furthermore, the minimum required pressure to prevent two-phase flow is higher (Seevam, 2008). It makes sense, economically, to limit this effect on capacity. In literature, the non-condensables are usually limited at 4 vol% (Mohitpour M. et al., 2012). Removing non-condensables requires additional process steps, with considerable capital and operational expenditure. These processes generally take place at the CO 2 source. -47-

48 Choosing the optimal limiting share of non-condensables is influenced by economics. A higher allowable content will lead to increased transport costs, while reducing purification and compression costs at the capture site. Case-specific calculations are required to determine the optimal non-condensables level Corrosion prevention If free water (i.e. water that is condensed, not dissolved in CO 2 ) is present in a CO 2 transport infrastructure, it readily reacts with CO 2 to form carbonic acid. This causes corrosion of common pipeline steel. Therefore, the occurrence of free water in a CO 2 pipeline must be prevented. The water content of the CO 2 rich stream is the leading factor that determines the corrosion rate. Furthermore, SO 2 and O 2 are known to increase corrosion rates significantly (Xiang, Wang, Yang, Ni, & Li, 2011). Therefore O 2 and SO 2 content should be evaluated further. When the water concentration is lower than the solubility of water in CO 2, all the water is dissolved and no free water is present. Under normal operating conditions, the solubility of water in pure CO 2 is 400 ppm or higher (see Figure 18). In CO 2 with secondary constituents like O 2 and SO 2, free water occurs at lower water concentration levels. In conclusion, the solubility of water in CO 2 depends on temperature, pressure and composition. All of these factors must be taken into account in order to determine how high the water concentration is allowed to be. Figure 18 Solubility of water in pure CO 2 as a function of pressure and temperature (Austegard, 2006). During blowdown of a pipeline, the temperature and pressure of the CO 2 drop, lowering the solubility. Little is known about the size of these effects, leading to some caution in setting the maximum water concentration limit. The limits used vary between 20 and about 500 ppmv (Mohitpour M. et al., 2012). Experience with existing CO 2 pipelines seems to indicate that 500 ppmv is accepted under certain circumstances. No significant problems have been reported. However, specific information about the temperatures and pressures reached during blowdown in different scenarios needs to be evaluated to assess which water concentration limit can be specified. Ultimately, Mohitpour et al. offer as a poten- -48-

49 tial solution the requirement to keep the water concentration below 60 percent of the dew point (Mohitpour M. et al., 2012) Health, safety and environmental (HSE) considerations Another requirement on the CO 2 quality entering a CO 2 infrastructure can be through its impact on health, safety and environmental (HSE) aspects. The specific aspect covered in this sub-chapter is occupational health, in terms of exposure to hazardous substances in the CO 2 rich stream. In the event that CO 2 is released, e.g. during unintended venting, CO 2 is released together with its secondary constituents. For this reason, the concentrations of any hazardous substances in the CO 2 should be considered and potentially limited to allow for acceptable levels in the transported CO 2. The approach applied here assumes that when a stream of CO 2 containing secondary constituents is released, the resulting exposure to the secondary constituents does not exceed the acceptable shortterm levels of exposure to the CO 2 itself. This approach for determining the limit for concentration of secondary constituents is taken from the Dynamis project (De Visser, 2008). In any event that results in the release of a transported stream of CO 2, the secondary constituents should not be more harmful than the CO 2 itself. This is the case for common CO 2 qualities conditioned for transport and storage Mixing of different CO 2 streams The mixture of multiple streams of CO 2 can be a point requiring attention. The composition of two streams with different composition that each meet the requirements for transport could in theory lead to a new stream with unwanted composition, and chemical reactions between components can result in unwanted reaction products. These concentrations could alter the characteristics of the CO 2 mixture, leading to lower water solubility and a different phase diagram. CO 2 specifications will have to be drafted in such a way that mixing any on-spec CO 2 streams never results in off-spec CO 2 streams. Research is underway on the following issues: - The allowable amount of water - Effects of interactions between secondary constituents - Possible interaction resulting from mixing of different CO 2 sources. -49-

50 Figure 19 Phase diagram for CO 2 in ternary combinations. Figure and description source: (Seevam, 2008). Transport range in dense phase (blue) and Vapour phase (green). Secondary constituents have an impact on the thermodynamic behaviour of the mixture. As can be seen in Figure 19, secondary constituents alter the phase diagram. The mixtures shown in Figure 19 have 5 to 10 percent secondary constituents. The allowable concentrations of secondary constituents in CO 2 are not known yet. In sub-chapter 6.2, the operational aspects of CO 2 transport are covered. -50-

51 5.5 Findings on technical requirements of a CO 2 transport infrastructure The implementation of a CO 2 infrastructure can draw upon decades of experience with existing infrastructures, such as CO 2 pipelines, natural gas pipelines, LNG shipping and the process industry in general. For large-scale CO 2 transport, not all transport options are feasible. The feasible options are: - Offshore pipelines - Onshore pipelines - Transport of liquefied CO 2 by barges - Transport of liquefied CO 2 via CO 2 carriers. A CO 2 quality specification needs to be determined in such a way that a number of aspects discussed in this sub-chapter are considered: - Integrity of the transport infrastructure - Reliability of transport - Cost-effective operations - Health, safety and environment. The issues presented above are topics of ongoing investigation. When a large-scale CO 2 transport infrastructure is realized in Europe and Germany, the existing expertise, technologies and standards will be applied, such as dimensioning, construction standards, operational procedures and safety standards. Technical and economical optimization should be achieved through research and development efforts targeted to the issues mentioned. However, from a technical point of view, proven technology can provide the required solutions. -51-

52 6 TRANSPORT BY PIPELINE CO 2 transport by pipeline requires a chain with a number of components which are discussed below, in order to give a clear overview of the requirements and challenges for pipeline transport. Only the case of dense phase/liquid phase transport is discussed, as Vapour phase transport is considered to be unfeasible for CO 2 transport on the required scale, as discussed in chapter 5. The components to be discussed are: - Collection network - Compressor - Main pipeline - Booster - Shore crossing - Offshore pipeline CO 2 suppliers deliver CO 2 at the interface between the compressor, which is considered part of the CO 2 capture installations, and the collection network. The offshore pipeline interfaces with the injection facility, which is outside the scope of this study. After the description of the main system components, the chapter proceeds to discuss the operation of the transport system. 6.1 Components of a pipeline infrastructure Collection network The CO 2 from each source is compressed and fed into a pipeline at the capture-transport interface. At this point, the flow, pressure, temperature and composition is monitored to ensure that the CO 2 meets the specification set by the network operator. Multiple sources of captured CO 2 can be coupled together by a collection network, which connects to a main pipeline. At the collection point, all incoming pipelines are tied into the main pipeline(s) at a collection station. At the collection station, the incoming CO 2 flows are monitored continuously. Depending on the business model used, measured data can be used to allocate cost to the various parties Compressor Since the compressor is defined as part of the CO 2 source, the CO 2 is considered to be at transport conditions, in dense phase at the intake point to the transport system. Choosing the appropriate compressor is a matter for study in itself since the required capacities are high and experience with centrifugal large-capacity CO 2 compressors is limited to a handful of sites where compressors are operational for such volumes. Centrifugal compressors of these capacities have limited operating windows and require careful operation to be able to deliver CO 2 at the desired pressure if flows are low. These -52-

53 observations are based on discussions with compressor manufacturers. The limited operational window of the compressor affects the pipeline system in such a way that the compressor can be a limiting factor in supplying CO 2 flows into the pipeline system. Not all combinations of flow and pressure can be realized efficiently Onshore pipeline This is the pipeline or possibly a bundle of multiple pipelines that run from the collection station to the shore crossing. It could also lead to a storage site onshore, but in this study, only offshore storage is considered. Below are some basic aspects of pipeline design Capacity Transport capacity is one of the defining characteristics of a pipeline. It is defined as the amount of CO 2 that can be transported in a given period of time. The relation between the pipeline diameter and its transport capacity is given in the following table. The transport capacity is given in accordance with common practice in CO 2 transport for EOR in the US. Pipelines are manufactured in standard diameters but wall thicknesses can be chosen in such a way that they meet the requirements of the specific project. A pipeline s transport capacity is determined by a number of factors. In Figure 20 a techno-economic optimum for pipeline capacity is given. The pipeline diameter is an important parameter. It is denoted in inches ( ). One inch is 25.4 mm. -53-

54 Figure 20 Optimization of CO 2 pipeline transportation system (Kaufmann, 2008). This graph shows that an optimal throughput for each pipeline diameter exists, but that a higher throughput is possible, at higher transportation costs. MTA is the same as Mt/a. The lines in Figure 20 yield the indicative numbers for pipeline capacities given in Table 14. Table 14 Correlation between pipeline diameter and transport capacity. Diameter Maximum transport capacity Maximum transport capacity (") Mt/a kg/s The pipeline can be used as a buffer due to the fact that dense-phase CO 2 is partially compressible; however, the buffering capacity due to this effect is limited. Doubling the pressure in the system results in an increase in mass in the system, of about 7 percent at subsoil transport temperatures. A careful optimization calculation is needed if buffering of CO 2 in the transportation system is consid- -54-

55 ered. Figure 20 shows that a pipeline can accommodate a flow that is significantly larger than the lowest-cost flow. This can be accomplished with intermediate pumping stations, but this will result in higher operational costs because of the higher energy requirements. Therefore, a cost-optimization of the pipeline infrastructure design is recommended Materials Discussion of the choice of material for constructing the pipeline applies to the collection network as well as to the main pipeline. The line pipe material of choice is carbon steel, the most economic option, in use throughout the CO 2 transport industry. Carbon steel is susceptible to corrosion when in contact with free water, as discussed in the sub-chapter on CO 2 quality. However, a sufficiently low water concentration prevents this problem from occurring (Oosterkamp, 2008). The equipment to achieve the water specification will be within the boundaries of the source capture plant and therefore is not considered in detail for this study. The properties of high-pressure CO 2 are such that careful evaluation of the required Charpy value of the material is needed to prevent crack propagation issues. Crack propagation can be prevented from occurring by choosing material with the appropriate Charpy value, given the operational conditions of the pipeline. Several research programmes have been conducted to determine the material and design requirements related to crack propagation issues such as the SARCO2 project (Demofonti, 2011). Gaskets and other soft materials must be selected with care, because elastomers can be susceptible to damage when applied in a dense phase CO 2 environment. Soft materials are subject to testing programmes in the industry. Currently there is ongoing work to determine the most suitable soft materials for application in a CO 2 transportation infrastructure. These research projects are proprietary and no publicly available information on suitable soft materials has been published yet. Experience so far has shown that some types of soft materials dissolve in dense phase CO 2 or are susceptible to failure after explosive decompression. This may occur when CO 2 has dissolved into the material at high pressure and expands after a sudden drop in pressure. The expanding CO 2 damages the elastomer as a result. However, careful selection of materials prevents this from happening (Oosterkamp, 2008) Geographical challenges For the routing of CO 2 transport pipelines through Germany, several obstacles or points of consideration are to be expected. They are described below, based on (Mohitpour M. et al., 2003) and (Mohitpour M. et al., 2012). -55-

56 Roads, railways and waterways Every major waterway and every major road or railway will most probably be crossed using horizontal drilling. Crossings add significantly to the pipeline cost and cannot be constructed in all locations. Nature reserves and recreational areas Laying a pipeline through a nature reserve or similar area of ecological and/or recreational importance is subject to restrictions. Lakes A pipeline trajectory can in principle pass through a lake, but this would require two shore crossings and a pipeline laid on the lake bottom. If the lake is narrow enough and the subsurface is suitable, a horizontal drilling can be performed. Either way, the pipeline will become significantly more costly when a lake is traversed. If possible, lakes are avoided in pipeline routing. Elevation Any slopes and rocky subsurface would add significantly to the costs of construction, because a rocky soil is less suitable for laying pipelines and slopes are challenging places to lay pipelines. Built environment If possible, transport routes through the built environment are avoided. Safety in the built environment is an issue that needs consideration. Moreover, the high density of all kinds of structures above and below ground, such as buildings, roads, pipelines, cables, etc. would need to be taken into account, which would set severe restrictions on routing and would be much more expensive than in less densely built areas. This is the most important factor limiting the routing options Booster It may be necessary to install a booster pump along a CO 2 pipeline trajectory to boost the pressure when the pressure at the inlet cannot be high enough to ensure a sufficiently high pressure at the outlet of the pipeline. For the offshore part of transport, a booster station, if necessary, is recommended to be installed onshore, because a booster station offshore is complicated and expensive to install and operate. A booster may be required when the pipeline route crosses an elevation: the pressure in the pipeline decreases as the CO 2 flows upward. A booster pump could in some cases be necessary to keep the CO 2 at the required pressure to avoid phase transition. Operational solutions and engineering solutions are required to ensure high enough pressure on hill tops when flowing downhill with varying capacities. -56-

57 For offshore injection, there is an optimization to be made between flow, pipeline diameter and intermediate compression or boosting. An important issue to take into account is the fact that intermediate compression or pumping stations require power supply. Offshore this would be a much more expensive option than onshore, which has to be accounted for in the optimization study Shore crossing The connection between an onshore and an offshore pipeline is called a shore crossing. For this a specific site is selected where the pipeline system is fed through the shoreline. Technology used in the natural gas industry can be applied here. Mature technology is in place and no special attributes are expected for a CO 2 pipeline. Existing technology can be applied in laying the pipeline Offshore pipeline Offshore pipelines for CO 2 transportation are not necessarily different from natural gas pipelines. Pipelines will be laid in a similar manner and according to the respective regulations and standards. Offshore CO 2 pipelines will contain no block valves and compression. Energy supply for a compression station is difficult and expensive and can be avoided by applying sufficient entry pressure at the starting point of the offshore pipeline. Design of the pipeline will have to include challenges in uneven offshore terrain like trenches. Routing will have to account for expected wrecks, and for difficult terrain due to possible areas to be avoided because of environmental or safety concerns. In this respect CO 2 pipelines are no different from natural gas pipelines. There is decades of experience in designing and laying offshore pipelines safely and efficiently. Laying an offshore CO 2 infrastructure can make use of this experience. No significant problems are expected. Additional research may be needed to assess possible effects of subsea leakage of CO 2 which may be caused by anchoring or fishing. Internationally there are research projects underway to tackle this issue. Leakage of CO 2 pipelines differs from natural gas pipelines since at pressures above the phase transition line, liquid CO 2 will be spilled and can accumulate on the sea floor at sufficient depth. At lower depths, gaseous CO 2 will be formed with corresponding temperature drop and possible ice formation. Subsea outflow of CO 2 is a subject of research for which no conclusions are available yet. 6.2 Operation Operation of the pipeline system is of importance since this determines the performance on a day to day basis. CO 2 pipelines have been in operation worldwide for decades without significant problems. Operating a CO 2 pipeline is standard practice. -57-

58 For drafting this chapter, information was used from actual CO 2 transport companies as much as was available in the public domain, information released in FEED studies (Vattenfall, 2011; ScottishPower CCS Consortium, 2011; ScottishPower CCS Consortium, 2011) and in-house knowledge of DNV (DNV, 2010) Operations philosophy The operations part of a CO 2 network describes the way the infrastructure is utilized, which actions are taken and which boundaries are to be respected. The way the system is operated by the team of operators has to fit in the operations philosophy. The hardware is built according to the design specs and governing legislation and design rules, but the actual way the system performs is determined by the operations team. The task of this team is to fulfil the goals of the overall system within the set boundaries and in an efficient and optimized manner. According to the operations philosophy of Shell as described in the UK Carbon Capture and Storage Demonstration Competition, the key objectives of the operations team are: - To ensure a high Health, Safety and Environment standard and compliance with legislation, company policies and procedures. - To manage risks to workers so as to be tolerable and As Low As Reasonably Practicable (ALARP). - This includes minimizing risks from transport, major accidents and occupational hazards. - To ensure injection of CO 2 meets contractual obligations in terms of correct quantity and quality. - To operate the asset in the most cost-effective manner. - To safeguard the technical integrity of all assets owned and operated. - To ensure appropriate technology is used in the facilities through the provision of relevant tools and techniques. - Safeguarding the technical integrity of all (critical) assets owned and operated. Particular attention will also be given to the maintenance of safety critical elements that are required to ensure that safeguarding and lifesaving equipment is kept fully functional. - Optimizing the recruitment, development and progression of staff. - Ensuring appropriate technology is used in the facilities through the provision of relevant tools and techniques. This does not necessarily mean use of the latest technology available but should be based upon proven technology. All related strategies are based on safe and responsible operation of the system, including maintenance strategies, planning, work processes etc. The operational aspects of a CO 2 pipeline as described here are based on a combination of actual operational guidelines from CO 2 transportation companies and operational descriptions as presented in FEED studies of potential CO 2 transportation projects. -58-

59 Where possible, exact criteria for operation are presented in the text below. The reason for this is that factual data from operational guidelines give an indication of the values that are used in practical systems currently under operation without filtering these data to more general statements. It shows that in practical installations all aspects of the operations are covered, under control and laid down in operations guidelines. Presented FEED studies for new CO 2 transportation projects in Europe lack operational experience and tend to be more general in description of operational issues, while actually used operational guidelines are more specific, laid down in operations handbooks and clear in actions to take and values to check. If in the text clear values are mentioned for checks and ranges, then these values are in use in operations by CO 2 transport companies. They show the values that are used to steer the process. For other newly designed pipeline systems, these values will need to be checked and re-established for the respective operational guidelines. Depending on specific circumstances, these values may vary but will probably be in the general order of magnitude of those that have been developed during decades of CO 2 transportation in the USA. This document tries to show as clearly as possible the issues that play a role in operations. For that purpose the original text as used for actual operational guidelines is followed as closely as possible. In the USA there are CO 2 pipelines in operation, with clear criteria and actions to be taken in case of deviation from normal operation. The operational issues described in this document are a reflection of this. Also the wording for specific operational conditions is followed as much as possible from the original documents in use in the industry. Experience in the USA has led to the appraisal that CO 2 transportation in wide parts is no significantly other business than other pipeline transport services. In the USA no special operations or safety measures are needed or even in place. The European situation may differ but operational experience in the USA can be used as a basis for the specific European needs Aspects of operation In this part the various aspects of operation are further highlighted. These are: Commissioning, filling the pipeline, final pressurization, station filling, measurement, warm and cold start, standby and idle operation. Finally, upset and emergency conditions will be discussed. Some remarks will be made about the whole chain of which the transport system is a part. Operational conditions For the description of the operational aspects of CO 2, a pipeline system with dense phase CO 2 is assumed. The upper limit for pressure is used for the entry point of the pipeline and the lower for the minimum operating pressure at the injection point or before recompression is required. Hilly terrain will have specific demands in this sense for operational issues to prevent phase transition by pressure drops. This ensures operation in the liquid or dense phase without risk of two-phase flow during operation. -59-

60 The location of a pig launcher and blow down facility needs to be determined during the engineering phase, but are necessary at systems begin. The pig launcher can fulfill a twofold function: - It enables to check from time to time (approx. every two years) pipeline integrity using a smart pig. - It plays a role in the process of planned depressurization and system start-up. Other system elements considered are block valve stations and receiving stations. The function of these is described elsewhere in the report. The normal operation detail of the CO 2 transport system will be discussed for a few cases: - Commissioning - Normal operation - Emergency and Abnormal Operating Conditions Detailed information on the operation of a CO 2 pipeline network is given in the DNV Recommended Practice Design and Operation of CO 2 Pipelines (DNV, 2010), which will be expanded in the near future. Prior to commissioning there is a pre-commissioning procedure to fulfil (ScottishPower CCS Consortium, 2011): - Confirming system installation in accordance with the project P&IDs (piping and instrumentation diagrams) - Confirming system quality (QA/QC) project records have been signed off as complete - Confirming all mechanical completion inspection sheets are complete and signed off - Ensuring all site query sheets are closed out - Punch listing the system prior to handover (including internal vessel inspections) - Acceptance that mechanical completion punch list items do not inhibit pre-commissioning/ commissioning completion - Developing local operating procedures for testing of all control and indication systems in accordance with loop drawings - Testing the emergency shutdown (ESD) - Testing all local controls and indications - Testing of system sequence control systems - Testing of data communications and telecom systems - Confirming all PSVs (Pressure Safety Valves) are calibrated, installed and online - Testing and energizing electrical power supplies, transformers, switchboards and distribution systems - Preparing piping systems for the introduction of utility/process fluids - Preparing systems for final commissioning - Developing pre-commissioning punch list. -60-

61 Commissioning For commissioning, the pipeline must first be hydrostatically tested to verify the maximum operating pressure it is designed for plus a safety margin. After this, the pipeline must be dried to get rid of the water left from the hydrostatic testing. This is done by ventilating the pipeline with hot/dry air or nitrogen until the medium reaches a dew point of typically -40 C. After drying, the pipeline is pressurized with nitrogen or dry air to a pressure of approximately 8 bar to prevent solid CO 2 forming when filling from a dense phase source. Then CO 2 is released in the pipeline for pressurization. Summary of line filling preparations: 1. The entire pipeline, including all station piping, block valves, bypass piping, valve bodies etc., must be cleaned, dried to -40 C dew point and filled with dry air. 2. All mainline block valves are fully open and all station valves are fully closed. 3. All small piping and instrument tubing lines are isolated from mainline. 4. All quality control instruments are calibrated and fully functional. 5. All equipment at various locations that is required to be operational is operating properly. 6. All necessary equipment for venting is available and proper located. 7. The supervisory control system is communicating with and can control and monitor each station and block valve. 8. Voice communication between all locations is established and checked. 9. Dehydration is capable of drying the CO 2 to the required level Filling the pipeline One operations manual shows the following procedure for filling a pipeline section. Complete main line systems will be filled in one operation so all block valves need to be opened. And all station valves need to be closed. After filling, the CO 2 -air mixture needs to be vented at the far end of the pipeline until a CO 2 level of at least 95 percent is reached. At that point, line filling is complete and line packing (further filling a pipeline by pressurizing) can begin. When filling a section of pipeline, after appropriate check that block valves are closed, a throttling valve will be opened to initiate CO 2 flow into the pipeline section. Upstream of this throttle valve typical line pressure will be in the order of magnitude of 90 bar or more. Significant cooling is to be expected at throttling. Freezing over of the throttling valve needs to be prevented by adjusting the flow accordingly. Dry ice formation is prevented by creating the back pressure of minimum of 8 bar. Temperatures as low as -40 C can be expected downstream of the throttling valve. Air is to be vented at the downstream block valve until a CO 2 air mixture of at least 95 percent is reached. After which the line section can be pressurized and line pack can take place. -61-

62 For each appropriate line section of station section, dedicated operational procedures as indicated above must be laid down and implemented. For each section and each block valve it needs to be clear what the procedure is and which steps need to be taken for a safe filling operation. In other studies, it is suggested that the pipeline be dried during commission with air with a low water dew point of about -50 C. An advised dew point to be achieved is between -40 C and -45 C Final pressurization Once the complete system is filled and dense phase is established all block valves shall be opened except for the first and last in the system. Then the final throttling valve to the operational system shall be opened to reach operating conditions. The opening of the throttling valve shall be such that the delivery stream meets the operating conditions. During filling operation, care needs to be taken that noise is attenuated and does not disturb people living adjacent to the station. After pressurization, the system will be put into operation as required Station filling and purging A similar procedure as described above has to be established for all piping and instrument lines. Every step in the procedure needs to be described so that lines are filled and pressurized. An especially important point concerning filling and purging is moisture quality monitoring. The moisture content level has to be monitored with appropriate measurement equipment. Approximately one week prior to the commencement of purging activities, the moisture content of the CO 2 fed into the system should be brought to a level as low as possible to prevent free water at low pressures as much as possible Starting modes There are different modes for starting up transport. A cold start is the condition that the pipeline has been taken out of operation due to maintenance or for an outage. The system is in a depressurized state and may contain a purge gas. The start-up from cold start will be similar to that of a first fill, in that the CO 2 will be introduced in sections at a reduced pressure to that of normal operation. Once pressurized to the initial pressure, and all the necessary checks and operations are completed, the compressors at the carbon capture plant will be permitted to ramp-up to the normal operating pressure. A warm start is considered as the condition where a trip has occurred but has been rectified within a short time period and system conditions have not deviated away from that of normal operation. Fur- -62-

63 thermore, throughput of CO 2 has ceased and a number of isolation valves have been activated but the pipeline and plant have remained in a pressurized condition. In this instance the trip initiator needs to be addressed and the relevant block valves reopened to allow flow of the CO 2. The compressors will need to be restarted so that normal operation may commence. Adequate design of the compressors with non-return valves on the discharge lines will prevent highpressure gas from back pressuring the capture plant. The benefit of a warm start is the reduction in downtime for the plant. In general, utilities would likely be unaffected and continue normal operation throughout the downtime Standby/Idle The standby/idle condition exists where the compression trains are not in operation. The system remains pressurized at the normal operating pressure with all remaining valves and equipment remaining in the normal operating mode, apart from the export block valves that will have closed to prevent the export of the CO 2 to the storage site. The position of the compressor valves will be determined during detailed design phase and will be subject to vendor advice. Temperature and pressure changes in this situation have to be considered in the planning and operation of the infrastructure Complete shutdown Complete shutdown is where the entire process is shut down. The CO 2 treatment and compression facilities will be isolated and brought to a safe state, as will the compressor station. The export block valves at the compressor station to the storage site will be isolated and all utilities will be terminated apart from those that have safety related functions. The cause of the complete shutdown determines the appropriate course of action to be taken. In certain circumstances it may be necessary to depressurize the system and may be made safe by using a purge gas. In the event of a complete shutdown where the carbon capture plant is still producing CO 2, this must be vented until the pipeline returns to operation Upset conditions Effect of water during upset conditions The solubility of water in CO 2 is an issue that is important concerning the safe operation of a pipeline. The formation of free water or hydrate in the system can be caused by abnormal operational conditions and should therefore be prevented as much as possible. Unwanted pressure fluctuations or rapid pressure reductions affect the solubility of water in CO 2. Solubility of water in CO 2 decreases as pressure is raised, till a certain minimum and increases again after further pressure increase. At constant -63-

64 pressure, water solubility increases as temperature increases. According to operations manuals a solid hydrate (CO 2.8H 2 O) can be expected when wet CO 2 solutions are chilled at pressures in the range of 35 and 41 bar. The hydrate can be prevented by maintaining fluid temperature above 12 C for dense phase conditions. Experimental data used in the CO 2 transportation system in the USA shows that if the partial pressure of CO 2 is maintained above 69 bar and the pipeline wall does not drop below 4 C, then a water level up to ppm will be sufficiently low to keep the pipeline dry. This figure has been in use in the USA for long-distance CO 2 pipeline transportation systems but will need further scientific research for an appropriate value in German CO 2 transport systems. This is because some expected secondary constituents, such as SO x and NO x, in the CO 2 can significantly impact the solubility of water and hence corrosion. SO x and NO x is not present in naturally occurring CO 2 as transported in the USA. In the presence of free water under flow conditions, CO 2 corrosion on carbon steel is estimated by experts to be in the order of magnitude of millimetres per year (Dugstad, 2011). Considering the fact that the pipeline is built without corrosion allowance, metal loss of this magnitude is excessive even on a short-term basis. Although the risk of plugging the line with hydrate may not be severe in such a situation, the effectiveness of corrosion inhibitors to prevent corrosion damage to the pipeline by liquid water drop out in flowing liquid-gaseous CO 2 is not known. In summary, allowable water content in CO 2 is the subject of intense debate and research. Depending on operational conditions and expected upset conditions limits of allowable water will have to be determined and monitored. This is operationally possible and standard practice. Upset conditions An abnormal condition occurs when control or protective devices which are provided for the safe operation of the system are not able to perform their functions. This may result from a communications failure to a control point or an equipment malfunction. Any circumstance which may develop into an emergency condition is considered an abnormal condition. Operating procedures during abnormal conditions must utilize alternate or backup methods to accomplish a given purpose. If a safe alternate method or procedure cannot be put into effect in a reasonable length of time, the condition should be reported to the next level of supervision. In any event, all system facilities must be strictly supervised to detect any signs of other failure or an indication that an emergency condition exists. Operators will bring the system to a safe mode, either venting the system or bringing it to a stand-by mode. Emergency conditions Rarely, but on occasion, the pipeline must be shut down in emergency. The nature and location of the situation causing the shutdown will dictate the most probable reaction to be made by the operator. Appropriate actions will have to be described in detail but are at present unavailable. -64-

65 A thorough understanding of actions to take in case of an emergency should be developed by staying currently informed of the contents of, for instance, a district emergency plan, a pipeline instruction manual or a safety procedures manual Blow down Blow down of a part of the system can be done by simply opening a blow down valve on the block valve and releasing the content in the atmosphere. Sound suppression may be needed depending on the proximity of populated areas. Alternatively, in FEED studies the procedure is suggested to replace the content of the pipeline by means of a pig being propelled by nitrogen or air at high pressure. After replacement, the air can be vented. Similarly, the use of a de Laval nozzle is suggested to be used as a pressure reduction tool to avoid cooling down of the blow down valve. The de Laval nozzle mixes the CO 2 stream with air and dilutes the CO 2 cloud significantly. Operational experience is very important to further detail the procedures needed to safely blow down sections of pipeline. Additional research is required to gain further insights in the thermo dynamical processes that take place in the pipeline during rapid decompression and during controlled venting of the pipeline. The blow down procedure is especially of importance when dealing with offshore pipelines. Offshore pipelines have some characteristics that make a safe and controlled blow down difficult. First, the pipeline does not have block valves. Secondly, due to the fact that blocking is impossible, the pipeline is one integrated system and a leak or evacuation at one point in the system will lead to a complete evacuation of the entire pipeline. Since the pipeline is situated at the seafloor, heat transfer from the surrounding environment to the pipeline is limited. The general average temperature of the seawater at depth is in the order of magnitude of 4 C so any decrease in temperature of the pipeline wall will quickly lead to freezing temperatures. Then ice will build up on the wall of the pipeline, further decreasing heat transfer. An uneven seabed will lead to low spots in the pipeline where liquid CO 2 will remain until the end of the evacuation. Pipelines laid in troughs in the ocean floor will remain filled with liquid CO 2 until the pressure is very low, so all heat for evapouration will have to be transferred to the fluid through the pipeline wall. This in turn will lead to very long evacuation times, in the order of magnitude of weeks for a pipeline of several hundred kilometres. It is the opinion of materials experts that cool down of the pipeline material does not necessarily lead to material deterioration but this needs further scientific support. The whole evacuation process of a pipeline is a subject of research to establish safe and controlled procedures for evacuation. A considerable amount of research has been performed in this field but the results of this are proprietary information of pipeline operators. -65-

66 In case of an emergency, blow down will be performed at a high rate of release. Environmental risks are present due to the possible high concentration of CO 2 in the zone around the release point. Simulations and calculations can give insight in the risk involved. Care must be taken to verify that simulation tools and calculations are performed with tools and data that are validated to prevent uncertain data and resulting uncertain safety distances Chain operation The carbon capture systems feeding into the pipeline system will have specific operation modes such as start-up, part load, base load and shut down. After start-up of the capture system the CO 2 will be vented until it reaches the specifications required by the downstream processes. Once the CO 2 meets the required specification, the CO 2 will be directed to the transportation system. The CO 2 compression plant will operate to maintain the CO 2 production rate and the flow rate requirements of the pipeline system to the compressor station. The pipeline systems have the capacity to provide some line pack by varying line pressure and consequently the quantity of CO 2 in the pipelines. Line pack in the pipeline will be utilized to manage, whenever practicable, abnormal conditions and small transients due to time lags between supply and demand balancing. For example, if the power plant trips or is about to shutdown, the storage site can be turned down to minimum flow to utilize the line pack to extend the period of storage site operation and avoid a shutdown. Alternatively, if the storage site shuts down, CO 2 capture can continue until the pipelines are at maximum pressure. It will not be used as an operational tool to manage significant supply/demand imbalance. There will be only a limited amount of line pack between the maximum and minimum operating pressures to absorb these transients Control and monitoring overview It may be expected that the individual elements on the CCS chain will comprise a process control system and an independent safety control system. Each CCS chain element is then self sufficient, supervised and operated in an independent fashion as far as possible under the guidance of their respective operating procedures. The control systems will then be interfaced rather than integrated, facilitating the overall coordination of control and monitoring. The individual control systems will interlink and exchange data as necessary for process coordination. Signals critical to safety and operation of plant and personnel will be transmitted directly between the systems (via hardwired and serial communications) and non essential signals will be transmitted via a live information management database. The data exchanged will have no controlling actions on adjacent party systems. Any controlling actions required between parties will be requested via a manual instruction process with the subsequent controlling actions carried out by the operator for the area concerned. -66-

67 6.3 Findings on CO 2 transport by pipeline A pipeline infrastructure transporting CO 2 from a collection of sources to one or multiple offshore sinks consists of a number of components that have been described. Mature technology can be applied to the design and construction of all of these components. Based on the documents referred to and the experience of the past decades of safe and reliable CO 2 transport it can be concluded that the operation of CO 2 pipelines has a high maturity. For new pipelines, applicable handbooks and procedures need to be drafted which need to match the specific requirements of the pipeline system, but no significant problems are foreseen. All aspects of operating a pipeline are known and can be defined accordingly for the specific system. Fine-tuning the operations will lead to a more efficient operation over time when experience with the actual system matures and operators get familiar with the specific circumstances of the pipeline system and its surroundings. Specific legislation governing the operation of the pipeline in Germany may differ from those of existing CO 2 transport systems but experts foresee no technical challenges, as safe and reliable operation of pipelines has been demonstrated in the US for decades. In conclusion, realizing, maintaining and operating a CO 2 pipeline infrastructure for Germany is technically feasible, although technical details will differ from existing infrastructure in order to comply with specific German needs. -67-

68 7 TRANSPORT BY SHIP CO 2 transport by ship requires a number of system elements in order to function. These will be discussed in this chapter. A distinction is made between barges and carriers, the former being suitable for transport via inland waterways, while the latter are for transport over sea. The elements of barges and carriers provide some flexibility to the transport system, which is an advantage over pipeline transport. However, the system is more complex, especially in terms of logistics. The shipping system is comprised of a chain with a number of elements. Figure 21 shows all elements that can be part of a CO 2 shipping infrastructure. The elements within the outline will be described in this chapter. Figure 21 The potential elements of a CO 2 transport infrastructure (adapted from Vermeulen, 2011). 7.1 Elements of a CO 2 shipping system Collection network A shipping system would require some form of collection network from the CO 2 sources to a harbour with a liquefaction and conditioning unit. Optimization calculations will determine whether this network will be in dense or gaseous phase. For the shipment of CO 2 via barges an inland harbour is required at relatively short distance to the CO 2 sources. This can be an existing harbour with capacity for extension (additional berths as well as facilities for intermediate storage) or a river with sufficient space for the construction of a new harbour. Furthermore, the waterways and sluices to be used for CO 2 shipment need to provide for spare capacity for a certain amount of extra barges. -68-

69 7.1.2 Liquefaction and conditioning unit Liquefaction is a technique that is used to make CO 2 liquid, thereby increasing the density. The resulting high density allows for more efficient storage and transport. The condition at which CO 2 becomes available at the CO 2 sources is in most cases at near atmospheric or slightly elevated pressure. The liquefaction is a technical process which comprises a series of compression, cooling and expansion steps. Before being liquefied, the captured CO 2 has to be dehydrated and separated from noncondensables (Vermeulen, 2011). The LNG, LPG and CO 2 production industry, as well as the entire process industry, have extensive experience with this technology. It must be noted that the capacity of the liquefaction unit must be designed for the maximum production rate of CO 2 from the (cluster of) sources Intermediate storage for liquefied CO 2 Intermediate storage is required to have a buffer between the (often fluctuating) capture and liquefaction process and the batchwise barge shipping of liquid CO 2. The required capacity of the storage vessels depends on the availability and reliability of all chain components Barge loading facilities Dedicated (cryogenic) loading pumps transfer the liquid CO 2 from the intermediate storage facilities to the barges. The connection between the jetty and the barge can be made by a loading arm or cryogenic hose equipped with a liquid transfer line and a vapour return line (Vermeulen, 2011). Such kinds of loading arms are already used for other liquid gas transfer applications such as LNG Barges Ship-based transport of CO 2 provides for certain flexibility with respect to capacity as it can easily be extended by increasing the number of vessels between the source and the terminal or sink. Liquefied CO 2 transport by ship already exists, but is limited to several smaller vessels transporting food grade CO 2. There is a European CO 2 distribution network including four dedicated ships and ten ship terminals owned by Yara. Ship sizes vary between 1,000 and 1,500m³, transport pressure is about bar (Aspelund, Molnvik, de Koeijer, 2006). However, the large-scale ship-based transport of CO 2 and the conditions at which CO 2 is transported result in the requirement for larger, newly designed vessels. The size of a barge for inland liquid CO 2 transport is limited by maximum ship dimensions, restricting the load of a single shipment. Final ship size will largely depend on the total yearly amount of CO 2 to be transported as well as the restrictions regarding ship sizes for each single water route. The capacity of a barge with a maximum length of 135m is approximately 6,000 7,500 tons for Germany (depending on the maximum allowed depth of the barges). It may be possible to increase barge length in consultation with the responsible authorities to approximately 150m, increasing the transport capacity. The number of barges required depends on the return trip time from the source to the terminal and the time for loading and unloading. -69-

70 Figure 22 Example of an inland CO 2 barge operated by Chemgas; Source: Vermeulen, For large-scale CO 2 shipping transport, hybrid tanks or semi-refrigerated tanks adapted to different loading and unloading conditions on board are regarded to be the most economical version. Sufficient design conditions are temperatures of approximately -50 C and a pressure of about 6 8 bar. When CO 2 is cooled and compressed to conditions just above the triple point (5.18 bar; C), its density is approximately 1,200 kg/m 3. Conditions of -50 C and 6 8 bar are recommended for shipping transport because of the relatively low pressures that are needed. (A. Aspelund, T.E. Sandvik, H. Krogstad, G. De Koeijer). Moreover, at these temperatures, common carbon steel can be used for CO 2 tanks Terminal & CO 2 carrier loading facilities Since the CO 2 is to be stored at an offshore sink, the operation of a terminal might be beneficial where the liquid CO 2 is unloaded from the barges, buffered in storage vessels and subsequently transferred to CO 2 carriers. A terminal might provide additional benefits with respect to flexibility in operation between liquid and gaseous CO 2 transport. However, storage of CO 2 at this scale has never been performed before and no proven technology is in place. From the intermediate storage vessels, the liquid CO 2 from the tanks is transferred to the carrier by ship loading pumps. To minimize loading times of the carrier, transfer is done at high flow rates of 2,500m³ per hour (Vermeulen, 2011). -70-

71 7.1.7 CO 2 carriers CO 2 carriers for transport and offshore offloading exist currently only as concept design. The idea is that these vessels should also be suitable to carry LPG as an alternative cargo (Vermeulen, 2011). There is already sound expertise in transporting LPG, which has developed into a worldwide industry over a period of 70 years. CO 2 carriers will most probably feature capacities in the range of 10,000 to 40,000m³. The round trip time of a CO 2 carrier is based on the following factors: - Carrier (un)loading time - Travel time Terminal Sink Terminal - Spare capacity (to account for bad weather) The carrier (un)loading time is determined by the loading capacity of the pump installed at the terminal. First concept designs estimate the (un)loading capacity at 1,600-2,500m³ per hour. The travel time is based on the distance between the terminal and the sinks and the carrier velocity. Offloading time is based on the offloading capacity, which will depend on the capacity installed onboard the carrier. The spare capacity is required to provide a margin for other circumstances such as waiting time, delays due to bad weather, etc. First concept designs handle a spare capacity of 65 percent of the total travel time Offshore offloading and injection facilities CO 2 injection in storage reservoirs has been covered in chapter 2. Some specifics that apply to injection of CO 2 from a carrier are described below. There are different concepts for the direct injection of CO 2 from the carrier to the reservoir. A major challenge is the phase change that the CO 2 has to undergo from the cooled liquid phase in the carrier to Vapour phase in the reservoir. For the phase change a significant amount of heat needs to be transferred to the CO 2. Furthermore, the injection conditions will change over the years as the reservoir is filling up and the pressure in the reservoir and at the wells rises. The injection requirements are set by limitations regarding: - Thermal cracking in the reservoir - Well integrity of the tubing, casing and cement - Hydrate formation - Ice formation - Noise, pulsations and vibration - Hydraulic cracking - Damage to the porous parts of the cement casing at CO 2 decompression. Simulations performed by TNO showed that in order to prevent hydrate formation in the reservoir, which can cause blockages, the minimum temperature at the reservoir inlet (bottom well) must remain -71-

72 above 15 C at a reservoir pressure of 50 bar. As the CO 2 is transported at -50 C, some means of heating will be required onboard of the carriers. During offloading of the carrier a fast pressure drop has to be avoided so no solid CO 2 can form. This is done with the help re-circulating CO 2 Vapour to the carrier to compensate for the decreased liquid volume. The increasing reservoir pressure over the reservoir s lifespan (eventually reservoir pressures of 370 bar could be reached) requires stepwise installation of pumping equipment order to handle the increasing injection pressure (Vermeulen, 2011). 7.2 Summary on ship-based CO 2 transport Ship-based transportation of CO 2 has the potential to provide high flexibility with respect to the capacity of CO 2 transported, because capacity increases can be realized by increasing the number of shipping round trips, if circumstances allow. However, this transportation concept is not yet proven technology on the needed larger scale since all major chain components only exist as a concept, e.g. the inland barges, the CO 2 carriers and the intermediate storage sites/terminals. Similarly, the transfer from the CO 2 carrier to the injection facility and the operation of such are still at the R&D stage. Synergies with the development of a LNG infrastructure are under consideration. Further developments will determine the feasibility of ship-based transport. -72-

73 8 DEVELOPMENT OF CO 2 INFRASTRUCTURE UP TO 2050 The technical requirements of a CO 2 transport infrastructure have been investigated and the implications for the options of transport by pipeline and shipping have been described. In this chapter, the CO 2 flows for each cluster as determined in chapter 4 are used to determine the nature and required size of the CO 2 transport network, as well as the way the infrastructure could develop in the coming decades. The transport infrastructure as a whole can comprise both pipeline transport and shipping. The geographical distribution of CO 2 point sources and sinks, and the amounts of CO 2 to be captured or stored at a given site will determine in what way the infrastructure is implemented. The abstract and generic scope of this study does not allow for a detailed analysis of specific routes and whether they would be covered best by a shipping system or a pipeline or a combination of both. For the same reason, no conjecture about transport distances is given. Therefore, the focus of this chapter will first be on the required development of a pipeline transport infrastructure that is capable of transporting the total captured amounts of CO 2 until the year This results in the size and number of the required pipelines. The requirements for a shipping infrastructure are analysed as well, using the clusters defined in chapter Long-distance infrastructure by pipeline and development over time The calculations of chapter 4 lead, as described, to the following amounts of CO 2 to be transported for each of the clusters: Table 15 Upper and lower bounds and annual flows for CO 2 production of the clusters. Note: the combination of these clusters amounts to 69.5 Mt/a CO 2 transport. This number is not correlated to the number of 59.4 Mt/a that was calculated for the total annual CO 2 transport in Germany in Minimal flow Maximum flow Annual flow Utilization (kg/s) (kg/s) (Mt/a) Cluster , % Cluster % Cluster , % Total 1,650 3, For each of the clusters the maximum flow is taken as the design capacity of the transport system. The clusters combined are assumed to be representative of a CO 2 transport system for the whole of Germany. The analysis of the clusters has resulted in an estimate of the maximum flow in relation to -73-

74 the annual amount to be transported. This analysis indicates that the three clusters combined result in a cumulative yearly amount transported of 69.5Mt, which corresponds to a maximum flow of 3,050 kg/s. If we couple this relation to the amounts of CO 2 to be captured in the years until 2050, the result is the following table. Table 16 Relationship between CO 2 capture goals and required maximum capacities. Year Annual amount of CO 2 captured Mt/a Required transport capacity kg/s 1,260 1,750 2,610 As discussed in sub-chapter 6.1, the transport capacity of a CO 2 pipeline in relation to its diameter is given by the following table. Table 17 Correlation between pipeline diameter and transport capacity. Diameter Maximum transport Maximum trans- capacity port capacity (") Mt/a kg/s Combining these data, the demand for transport infrastructure for the whole of Germany could develop in time as follows: Table 18 Possible development of pipeline infrastructure for Germany. Annual amount Required Realized capacity of CO 2 captured capacity Year Mt/a kg/s ,260 32" 24" ,750 32" 24" 28" ,610 32" 24" 28" 32" -74-

75 These results are displayed in Figure 23. Figure 23 Graph of required and realized capacity until The numbers 30, 40 and 60 Mt/a correspond to the required transport capacity. For comparison with the natural gas infrastructure the total length of the CO 2 infrastructure is estimated. The projected four pipelines will have an average length of about 400 km onshore to a shoreline. Each source has an average collection network of 50 km to the collection point. This results for 30 sources in km of pipeline. For the total CO 2 network this will result in an infrastructure of approximately km length, offshore pipelines not included. This is about 10 percent of the current onshore high-pressure natural gas infrastructure in Germany, which has a length of over km (ENTSOG, 2013). If we include offshore, with 4 pipelines of around 500 km length each, this will result in a total length of the pipeline system that amounts to over km. Other configurations are possible as well. Detailed analysis is required to find the optimal set of pipelines for each cluster. If the required capacity is larger than the realized capacity, like after 2030, the -75-

76 flexibility in operational parameters will allow for transportation of all captured CO 2. In these circumstances, the operational costs will be slightly higher. The pipeline system itself contains a certain amount of CO 2, which represents a considerable value. Consideration must be given to preventing unwanted emission of the content to the atmosphere in case of decommissioning of the pipeline or evacuation operations. The volume of the pipeline system allows for some flexibility in the amount of CO 2 it contains, because CO 2 is somewhat compressible. The volume of the whole system, with collection pipelines and the main onshore and offshore pipelines, is around a million m 3. Figure 24 Density of CO 2 as a function of pressure and temperature, from (Oosterkamp, 2008). The blue oval shows the typical operating envelope of a CO 2 pipeline system. From Figure 24 it can be seen that the density of CO 2 is not influenced to a great extent by the pressure at normal transport temperatures. The density is between 900 and kg/m 3 for transport temperatures around 10 C. The total volume of pipeline infrastructure in 2050 is about 1 million m 3, which is equivalent to slightly less than 0.9Mt. For the given pressure range, at 10 C, the variation in density is roughly 80 kg/m 3. With these numbers, the variation in infrastructure content is calculated to be at about max t. It may be even somewhat less because of diverse operation restrictions. This flexibility is equivalent to around 3 full load operating days of a large coal power plant. However, it is -76-

77 more economic to provide flexibility by increasing the transport velocity, rather than the pressure. This is an optimization issue for the design phase. 8.2 Ship-based CO 2 transport from the clusters to the sink Intermediate storage For shipping, as, to a lesser extent, for pipeline transport, intermediate storage is required to provide for continued operations of the CO 2 sources. In principle, there are multiple ways to buffer CO 2, like line packing, underground salt caverns and storage tanks, of which storage tanks are the most logical option for application in a transport infrastructure because in that case there is no dependence on the dimensions of the connected pipelines or the location of salt caverns. The required capacity of the intermediate storage is determined by the fluctuations of the CO 2 production, the maximum production rate at the sources and the loading rate of the barges. Two approaches can be chosen when designing the storage facility: using the buffer to smoothen the operation (peak shaving) or as essential component to guarantee that all CO 2 emitted by the sources can be captured and transported. The first option requires for a storage capacity of several hours of operation, the second for several days of operation. With the help of Figure 25 both approaches are explained using a typical week production profile. Figure 25 Determining the buffer capacity for a typical week production profile; orange line indicating the average production rate, yellow area indicates filling of the buffer, blue area emptying the buffer). -77-

78 For the first approach to use the buffer for peak shaving it can be concluded that for the typical week profile a buffer capacity of approximately 20,000t (i.e. 16,700m³ liquid CO 2 ) is sufficient. The capacity for the intermediate storage increases when there is a need to capture and transport all CO 2 from the point sources: this requires buffers sufficiently large to bridge days of low water level, inundations and ice formation which can hinder the shipping for several days to weeks. Events like these require an even larger buffer storage, to prevent CO 2 emissions due to unavailability of barges or carriers Required number of barges for inland shipping For this study, two distances for inland shipping were taken into account: 350 km and 700 km, the latter as a sensitivity case. The table below lists the general assumptions for transport via barges (from source to terminal) for all three clusters. Table 19 Assumptions for transport via barges. Different barge loading capacities are reviewed in order to determine the required number of barges for each option. The number of barges depends on the return trip time from the source to the terminal and the loading and unloading sequence time. As a safety margin a maximum barge occupation rate of 95 percent per year is applied. The ship occupation rate is assumed to be 95 percent as well. Furthermore, a utilization rate of 95 percent is assumed. Table 20 Number of barges per cluster. Barge capacity (tons) Number of trips Cluster I Number of barges (350 km) Number of barges (700 km) Number of trips Cluster II Number of barges (350 km) Number of barges (700 km) Number of trips Cluster III Number of barges (350 km) Number of barges (700 km) , , , , , , , , , , , , , , , , , , , , , , , ,

79 When using barges with the largest capacity, the cluster with the biggest output (Cluster I) would require between 66 and 122 barges, depending on the distance to the terminal. The output of CO 2 would be sufficient to fill a complete barge every 2 hours. However, the barge capacity is determined by the maximum allowed draft and might be smaller, resulting in a higher number of barges. Furthermore, bottlenecks such as the spare capacity of sluices and the number of ships already using the waterways need to be assessed Number of CO 2 carriers Preliminary designs for CO 2 carriers assume cargo capacities of 8,500 33,000 tons. For this study, a capacity of 30,000 tons per carrier is used. All assumptions regarding the offshore transport with carriers are shown in Table 21. Table 21 Assumptions for transport via carriers. Cargo capacity (t) 30,000 Loading rate (t/h) 2,083 Discharge rate (t/h) 1,250 Volocity (km/h) 25 Occupation rate (%) 98 Utilization rate (%) 65 The utilization rate is the percentage of spare carriers available to account for the fact that carriers are regularly unavailable. This factor is used to provide a margin for delays such as waiting time, downtime due to bad weather, etc. At this stage this is still a rough estimate and final determination of the round trip times can be done when more detailed logistic information is available. These assumptions lead to the following calculation results: Table 22 Number of carriers per cluster. Cluster I Cluster II Cluster III Amount to be transported annually per cluster [t] Number of carriers per cluster (300 km distance to terminal) Number of carriers per cluster (500 km distance to terminal) Size of the terminal For the design of the terminal it is assumed that all CO 2 to be captured and stored in 2050 will be transferred via one single terminal. Hence, the maximum amount of CO 2 imported and exported by the terminal is around 60 Mt/a (see chapter 3). The following paragraphs roughly sketch what such a terminal would look like. -79-

80 If all offshore transport would be done via carriers, between 16 carriers of 30,000 tons capacity would be needed. About 3-5 carriers would be loaded simultaneously, depending on the distance of the terminal to the sink as well as the loading rate and capacity of the carriers. As the carriers have approximately 3.5 times as much cargo capacity as the barges (30,000 ton vs. 8,000 ton), the terminal must feature 3-4 times more berths for barges than for carriers. The storage capacity very much depends on the safety margin (e.g. buffering CO 2 in case of bad weather). But the scale is approximately several hundreds of thousands of tons CO 2. Careful economic evaluation of specific prospected shipping chains will be required to optimize the economics of CO 2 transport by ship and to determine the optimal configuration of such a system. If the terminal was to function as a hub for both liquid (ship-based) and Vapour phase (pipeline) CO 2 transport, liquefaction and Vapourization facilities must be present as well. 8.3 Transport infrastructure conclusions and requirements For the approach with clusters of sources, several pipeline and shipping requirements can be summed up. The table below shows an overview of the key characteristics of ship-based and pipeline transport. Table 23 Overview of key characteristics of ship-based and pipeline CO 2 transport. Key characteristics Pipeline Shipping Transport conditions bar Equilibrium pressure (>8 bar) 5 50 C > 50 C Technology Collection network(s) and main pipeline(s) of carbon steel Collection network(s) of carbon steel Liquefaction and conditioning terminals Intermediate storage essential Typical size Pipeline system Multiple pipelines of diverse diameters Subject to optimization On rivers barges: (8,000 t) for km Offshore carriers: (30,000 t) km -80-

81 8.3.1 Size of transport network by ship The clusters size has been evaluated based on the amounts of CO 2 to be transported. The result is presented in Table 24. Table 24 Potential pipeline configurations for the clusters. Annual flow Pipeline Shipping (Mt/a) Configuration of Utilization # of carriers # of carriers main pipeline for 300 km for 500 km Cluster and % Cluster and % 4 5 Cluster and % 8 10 This table will be used as an input for the analysis of the CO 2 network development scenarios that is to be carried out. Note that the sum of the three clusters does not result in the targeted CO 2 transport. The clusters are just hypothetical sets of sources that are analysed to gain some insight in the features of a CO 2 transport infrastructure Transport costs The costs of CO 2 transport will depend heavily on the utilization rate of the transport system, especially in the case of pipeline transport. For Clusters 1, 2 and 3, the utilization rates are 81 percent, 57 percent and 70 percent, respectively. This translates into higher transport costs than if there would be a flat CO 2 delivery profile. The business case for CCS on a CO 2 point source delivering a steady flow of CO 2 is much easier to make than when there is a fluctuating flow of CO 2, as the transport costs per ton of CO 2 stored will be proportionally higher. The trade-off for fluctuating CO 2 streams is between a larger transport capacity and larger storage capacity, both leading to higher transport costs. At the moment, there is no large-scale transport for CCS in Europe. Several estimations of the costs of CO 2 infrastructure have been published. Because few cost figures of actual CO 2 pipelines or shipping systems are available, there is significant uncertainty in these cost data (Mallon, 2012). This makes it hard to determine accurately how high the transport costs will be if the infrastructure were to be constructed today, let alone in the coming decades. To give an idea of the level of CO 2 transport tariffs, an estimate by ZEP is reproduced in Table 25. Many other cost estimates can be found, but this source is sufficient to get an indication of the costs. -81-

82 Table 25 Cost estimates for large-scale networks of 20 Mt/a ( /t CO 2 ). Table and description from the Cost report by ZEP (ZEP, 2011). Spine Distance ,500 Onshore pipe n. a. Offshore pipe Ship (including liquefaction) To gain insight in the upfront investments (CAPEX, Capital Expenditures) needed to transport the calculated quantities of CO 2, some data from CO 2 transport cost studies are reprinted in Figure 26. The numbers presented here cover CO 2 pipelines in a diverse set of conditions. A distinction is made between onshore and offshore pipelines, but there is no differentiation in terrain type (except for one source giving CAPEX of pipelines in mountainous terrain). It must be noted that the routes of CO 2 pipelines depend on a large number of factors and cannot be determined at this time. Thus, only generic cost estimates can be calculated. The cost estimations take into account the fact that a pipeline system incorporates not just the pipelines themselves, but also installations such as stations, landfalls and horizontal drillings. Figure 26 CAPEX of CO 2 pipelines, based on numerous studies, reprinted from (Mallon, 2012). Note that the cost is represented in / m. The costs in / m decrease with increasing diameter, whereas the costs in /m are higher for larger diameters. -82-

83 From the numbers in this study, the unit costs of CO 2 pipelines of relevant diameters have been determined, as shown in Table 26. Research regarding crack propagation is ongoing in order to determine which measures are required to prevent propagation. It might be required to increase the wall thickness of the whole pipeline to mitigate the risk of crack propagation instead of using crack arrestors. Such measures could add up to 50 percent to the unit costs of CO 2 pipelines. Table 26 Unit costs of pipelines, given in /m, derived from (Mallon, 2012) and increased by 20% to allow for a larger wall thickness. CAPEX ( /m) Diameter (") Onshore Offshore 16" 806 1,056 24" 1,440 1,152 28" 1,579 1,344 32" 1,728 1,651 The investment costs of a German network for CO 2 transport by pipeline can be estimated, assuming an average distance of 50 km of the connections between sources and the main pipeline. The pipelines in the collection are assumed to have a 16 diameter, which would enable them to transport around 4 Mt/a each. The distance of the onshore pipelines is assumed to be 350 km, while the offshore distance is set at 100 km. The development over time is based on the numbers calculated in chapter 6. Table 27 Estimated CAPEX of pipeline network until CAPEX (million ) Year Extension of Additional Collection Onshore Offshore Total pipeline network connections network " and 24" , , " " ,173 Total 1,210 2, ,056 As a sensitivity case, an offshore transport distance of 500 km is also calculated. The CAPEX of the 500 km long offshore infrastructure is around 2.9 billion, making the CAPEX of the total infrastructure 6.4 billion. The CAPEX given for a certain year represents the additional CAPEX necessary to expand the system. Thus, for 2040, the CAPEX figure is the investment in the years from 2030 to The total gives the CAPEX for the whole period until The investment is plotted in Figure

84 2500 Investment in pipeline network CAPEX in millions of present Collection network Onshore Offshore Figure 27 Indicative plot of investments in CO 2 pipeline network until For shipping, a similar analysis can be made. However, few CAPEX figures for CO 2 barges or carriers are available. In most cases, a transport tariff for CO 2 shipping is given based on undisclosed CAPEX figures. In an IPCC report (IPCC, 2005), the CAPEX for a 30,000t carrier is specified at US$58 million, which we convert to 43 million. 5 For simplicity, we assume the CAPEX of a barge or carrier is proportional to its capacity, so an 8,000t barge would cost 11.5 million and a 25,000t carrier would cost 36 million. In Table 22, the number of carriers required in each cluster is given. If we convert it to the requirements of a German CO 2 transport network, we get the following development of the number of carriers: Table 28 CAPEX of CO 2 carriers if all CO 2 transport would be done with barges and carriers. Year CO 2 transported (Mt/a) Number of barges CAPEX barges (million ) Number of carriers CAPEX carriers (million ) Total 109 1, Exchange rate of 0.74 /$, retrieved from (ECB, 2014). -84-

85 The cost division between the different elements of a shipping system is estimated by (Vermeulen, 2011). Based on Figure 28, the liquefaction and terminalling costs are about 1.5 times the costs of offshore shipping. Figure 28 Cost breakdown of CO 2 shipping, reproduced from (Vermeulen, 2011). For the total chain with a collection network, barges for inland shipping and carriers for offshore transport, the estimated costs are given in Table 29. Table 29 Estimated CAPEX of pipeline and carrier network until CAPEX (million ) Year Extension of Additional Collection Barges Liquefaction and Carriers Total pipeline connections network terminalling network " and 24" , " " ,394 Total 1,210 1,249 1, ,

86 The results are plotted in Figure 29: 2500 Investment in barge and carrier network CAPEX in million present Collection network Barges Liquefaction and terminalling Carriers Figure 29 Graph of estimated CAPEX of a CO 2 transport system with onshore pipelines and offshore carriers until The indicative calculations yield a total CAPEX about 4 billion in case of a pipeline system transport or transport with barges and carriers. It needs to be emphasized that these indicative costs only represent investment. Operation costs that are not investigated here will have a considerable impact Overall conclusions on CO 2 infrastructure It has been investigated how a CO 2 transport infrastructure would need to develop over the years from until 2050, based on the development of the amounts of CO 2 to be transported. Both for shipping and pipeline transport, the configuration and size of the network was evaluated. A pipeline network would consist of a 32 and a 24 pipeline in 2030 or equivalent. In 2040 an additional pipeline of 28 is needed and in 2050, another pipeline of 32 diameter would need to be added. The collection network would develop in a similar way. A shipping transport system would require about 110 barges of 8,000t capacity each and between 16 carriers of 30,000t capacity each. We have presented some indicative cost estimates for a CO 2 transport system. They show that the CAPEX of a transport system would be around 4 billion or 9 billion, for a pipeline or shipping infrastructure, respectively. Although these numbers are based on strongly simplified calculations, they give some indication of the costs of CO 2 transport. -86-

87 Table 30 Indicative estimate of CAPEX in an all-pipeline infrastructure and a pipeline and carrier infrastructure in the years 2030, 2040 and CAPEX (billion ) Year Pipelines onshore and offshore Inland barges and offshore carriers total More precise calculations can be done when actual CO 2 transport infrastructures are planned. Detailed information about the amount of CO 2, flow dynamics, routes and quality requirements will then enable a calculation of an optimal transport infrastructure. -87-

88 9 BUSINESS MODELS FOR CO 2 TRANSPORT INFRASTRUC- TURE For CO 2 transport infrastructure with which CCS can contribute to the German government s targets for 2050, an infrastructure is needed that is assumed to go beyond single point-to-point transport of CO 2. Therefore, for this aim, transport infrastructure for CO 2 in Germany is seen as one system that should be able to transport the CO 2 from the connected sources to North Sea offshore storage as described in previous chapters. Business models describe the form in which an economically viable business can be developed, who the partners in such a business can be and what form of enterprise can be chosen to develop this business. Depending on the interest of the stakeholders involved, various forms of cooperation can be developed. An important variable in the attitude of power producers, for instance, will be the utilization of the power plant over time based on RES feed in. For low utilization, designing a dedicated own pipeline is less interesting than when the power plant is running full load and delivers a steady stream of CO 2. Given the complexity of stakeholders involved and the sheer amount of alternatives that are possible for the choices that can be made during the set up and design of such a transport entity, this chapter must necessarily outline the process variables that have major influence on the design of such a business. The objective of CO 2 capture, transport and storage is to lower CO 2 emissions thereby contributing to lowering greenhouse gas emissions. Currently, the capture, transport and storage of CO 2 is not an activity that is economically viable: the costs outweigh the financial benefits. However, the release of CO 2 to the environment is in this context a benefit that is currently not (fully) monetized. Therefore, realization of an infrastructure for CO 2 is unlikely to occur in the free market, without incentives, or redistribution of public means. Long-term subsurface storage of CO 2, including CO 2 transport and capture can be seen as a merit good, i.e. the activity as a whole does not have intrinsic economic benefits, but has a clear public gain. As a consequence, subsidies, grants or other mechanisms are required to stimulate these activities. The public role of enabling these activities can clearly be seen, with CCS, where grants and R&D funds on EU and national level are used to develop CCS technology and its implementation. The longterm perspective of a viable business is a vital prerequisite for CCS investors to realize the whole chain. -88-

89 CO 2 transport infrastructure plays an enabling role in realizing the chain in several ways: - Certainty about the availability of CO 2 transport equipment will play a role in investment decisions on both capture and or storage of CO 2 - A common infrastructure that connects multiple sources brings advantage of scale both in realization and effectiveness for the whole CCS chain. 9.1 Approach In this chapter business models for CO 2 transport are discussed, along with key elements for a successful CCS business model for Germany in First, a short discussion on definitions is given. - To illustrate what constitutes a business model, some business models that include transport in a general sense are discussed. - The relevant background for this chapter is provided by discussing selected available literature on business models for CO 2 transport. - Finally, the key findings on CO 2 transport infrastructure are identified. 9.2 Examples and definitions Definition of business models for CO 2 transport The concept of business model, with the main parameters as described below, is used with the following meaning: A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, cultural, or other forms of value). The process of business model construction is part of business strategy. (Osterwalder, 2010) The main parameters in a business model are thought to be the following: - the actors that play an active role in this organization or - their roles / responsibilities / accountabilities, - the cost incurred for each actor, - their commercial and other goals and, - the risks the actors take. A balance for each of the actors on these parameters is thought to be key in creating a functioning business model. Given the goals of individual actors and the risks they are willing to take, their required compensation will vary. -89-

90 Business models depend on strategic goals and economic parameters that can vary based on circumstances in the market, political will of government and stakeholders, political targets, economic and financial goals, regulation and tariffing. When the actual circumstances become clear on how the German stakeholders want to design and operate a transportation system and the political targets are clear, then partners can engage in negotiations on how to draft a business model that satisfies all stakeholders. On business models and business cases In contrast to business cases for CO 2 transport, business models have a more generic focus, and include regulatory and policy-making activities. Here the main focus of the shared enterprise is on realizing CO 2 transport infrastructures for the whole of Germany. Business cases can in this context be seen as the specific application of a business model, to one or more actors, for a specific part of the CO 2 transport infrastructure. Furthermore, in a business case, all the feasibility, economic and other consequences are detailed to the level that allows decision-making. This study discusses business models only. On the objective and scope of business models This chapter deals with business models of CO 2 transport, within the context of the aim of the study. Business models for privately owned source to sink transport facilities are not considered in this chapter. Although these may be a realistic option for realizing the first CO 2 transport connections, this study focuses on realizing a CO 2 transport infrastructure with the aim of transporting CO 2 up to Each of the actors may have its own objectives. However, the joint result is assumed to be a functioning business that results in all of the requirements for development and realization of CO 2 transport infrastructure for long-distance CO 2 transport in Germany, to contribute to realizing the German government s goals for lowering CO 2 emissions. -90-

91 9.2.2 Examples of business models To illustrate what constitutes a business model, three examples are included in the table below. The three cases are natural gas transportation (NV Nederlandse Gasunie), the transport and delivery of mail and parcels (Deutsche Post DHL), and the transport (or more exactly the transmission) of electricity (TenneT). Example company Main purpose Actors Historical developments Who pays and provides funding? Physical infrastructure Natural gas transportation Mail and parcel delivery Electricity transmission NV Nederlandse Gasunie Deutsche Post DHL TenneT Transporting natural gas in the Delivery of mail, international Transport System Operator: Netherlands and Germany; express, air and ocean freight, ensure transport and dispatch facilitating natural gas markets, road and rail transportation and of electricity, the realization, operates a title transfer facility contract logistics exploitation and asset management in the high pressure gas grid of transport grids Natural gas shippers, industrial Mail and parcels senders and Industrial, domestic and other customers, power generators, receivers, Deutsche Post DHL, users of electricity, local, national natural gas distribution grid rail, road and air infrastructure and EU governments, owners, regulator owners and operators, national trading and other actors in governments, EU government electricity markets, all electricity users and suppliers connected to the network After a natural gas find which Started in 1490 on horseback After an initial private start with replaced the existing town gas with postal stations across battery and local generation supply, Gasunie started in Europe, in the 1900s using and use, transmission and distribution 1963 as a combined natural coaches followed by train infrastructure. of electricity started as gas trading and transportation The German federal a local and later regional public company. Since 2005 the postal service diversified from activity. In the late 1900s the company is unbundled in a gas the 1950s with banking and first small grids in cities (in trading company GasTerra and telecom and was split in mid- GER: Stadtwerke) played a the transport company Gasunie. 1990s, was privatized and went large role in the second indus- Gasunie continues to public in With several trial revolution. develop into a bigger and more acquisitions of express and versatile gas transport company logistics the current Deutsche with services both regu- Post DHL was formed. lated and not regulated. Funding is found in market at Payment is directly linked to End users of electricity pay a commercial tariff. the transported good or service: transport fee, based on the Cost are covered ultimately by tariffs are set for mail ser- type of connection and its ca- gas consumers vices, and not regulated for pacity. Financed by public and parcel and other services allowing partly private funding. optimizing. Financing by private parties. (internationally located) Carbon Collection, means of transport High and medium voltage grid, steel high pressure pipelines, (vehicles, trains, planes), distribution with substations, communica- gas compression stations, mixing centres are owned by tion and IT infrastructure to stations, storage facilities individual companies, and allow monitoring and control -91-

92 and import and export (meter- make use of publicly owned over the network ing) stations transport infrastructure Public role Natural gas transportation, providing (regulated) access to natural gas grid Construction and maintenance of public road and rail infrastructure Construction and maintenance of electricity transmission infrastructure is financed by na- Provide Regulatory Authority tional governments. Ownership Publicly owned; company shares are owned 100% by Privately owned, traded on the stock exchange (formerly state Publicly owned; company shares are owned 100% by Dutch State. owned) Dutch State Regulation Regulator in place (ACM: Autoriteit Consument en Markt for the Dutch network; Regulated by the National Regulatory Authority (e.g. Bundesnetzagentur) Regulator in place (ACM: Autoriteit Consument en Markt for the Dutch network; Bundesnetzagentur for the Bundesnetzagentur for the German network) German network) What regulated? is Transport tariff under conditions of use; all cost of transport to be transferred to users through the size of connection Interests of customers, postal secrecy, competition in postal markets, basic postal services at affordable prices, Tariff structures and conditions for the transmission of electricity, determining connection, transmission and supply tariffs public safety interests and so- for electricity, including dis- cial requirements count to promote efficient operations by grid operators Access to network Non-discriminatory access, under general terms of trans- Entering the mail market requires a licence. Entering the Connection to the network is strictly regulated in the net port parcel and services market requires notification. code with (technical) conditions, both for suppliers and users As can be found in the table above, the activities involve transport, require a physical infrastructure and include a network with connections that spans national boundaries and beyond. In that sense, these transport infrastructures are comparable to the CO 2 infrastructures. Historically, these infrastructures have gone through private and public ownership and so the physical infrastructure components involved have been publicly financed. Moreover, the infrastructures combine both strictly regulated and competitive commercial activities (mail/ parcel services, transmission of electricity and natural gas). These examples show the different elements that the actors and types of regulation can apply to transport business models. They can learn from the current way mail and parcel services and electricity transmission are organized, and also from their historical developments. The German highway system is discussed as another example of a business model for a certain infrastructure. The German highways are constructed and maintained by the government, which uses treasury funds for this. The highway users do not yet pay for them, although most users contribute to the construction and maintenance costs indirectly, through general taxes. -92-

93 9.3 Literature background on CO 2 transport business models In this sub-chapter, possible alternatives for business models for a CO 2 transportation company or entity are explored based on literature sources. First, the focus will be on the CCS chain, and later on in the chapter, the focuses shift to CO 2 transport business models Current status of CCS development from literature The analysis of possible business models and the relevant parameters is based on a literature study and results of various analyses made. These analyses are compared and put in perspective. It is assumed in the analysis of business models that actors in the field of CCS act according to economic laws. This means that behaviour and decisions concerning activities, investments, possible operations, business development etc. are governed by the wish to achieve an economic optimum. This means that when a satisfactory or positive business case cannot be achieved, actors will not invest in CCS. Logical partners in this area are large emitters such as power producers and big industries, natural gas transport companies and Exploration and Production companies (E&P). Economic behaviour is to be expected of these parties. One important partner in CCS is the government. The behaviour of the government is ruled not just by economic motives but by political motives and goals. Important aspects of the development of business models are the steering of the economic behaviour of the important executing partners and the political goals government has with CCS. Public opinion will put pressure on the partners through environmental targets, as well as targets set for climate change mitigation and social responsibility goals. However for the sake of simplicity and clarity it is assumed that at the end of the day companies involved in the CCS chain will have to survive for the duration of the project and will act according to economic laws. Recent developments in Germany like the transformation of energy systems towards sustainability (Energiewende) including the phase-out of nuclear power (Atomausstieg) and the effects of accommodating large amounts of sustainable energy in the energy system have shown that companies behave economically in the sense that decisions are taken to improve financial results by for example cost reduction and trying to sell off uneconomic power plants. The biggest barrier to roll-out of CCS at this moment is that the whole undertaking is not economically viable, and an enforcing or stimulating regulatory framework is lacking. The ETS system has not delivered the CO 2 prices that were anticipated and various reactions of parties in the market have ensured that the price of CO 2 credits is likely to remain low for the foreseeable future. This analysis was made by Arnold Mulder in his paper (Mulder, 2011). The German emission reduction goals for the decades up to 2050, as discussed in this study, imply, however, that CCS will gain momentum one way or another. -93-

94 In a paper presented by the Zero Emission Platform (ZEP) Creating a secure environment for investment in Europe, (ZEP, 2012) a possible development route is given for CCS projects depending on the development of CCS unit cost and carbon price. It notes that several milestones will need to be passed before full-scale or, as they call it, wide-scale deployment of CCS is to be expected. The graph depicting the milestones gateways is from the IEA 2012 and shows the incentives and capabilities that need to be in place for CCS to take off. The article states, parallel to the findings of Mulder, that given the critical importance of CCS in addressing climate change.the ETS should be adjusted to take the impact of additional, non ETS measures into account. According to Mulder, the oversupply of allowances prevents a rise of ETS price so policy measures should therefore first and foremost be focused on eliminating the weakness of the ETS. Tax and other alternative stimulating mechanisms have been suggested widely in the literature, and have their pros and cons. In addition, with respect to this issue, regulatory measures such as obligatory application of CCS can also be mentioned. Depending on the stage CCS development is in, different incentives will be required. Incentives can be in the form of grants, guarantees and subsidies, through support mechanisms and by pricing carbon through flexible mechanisms such as carbon trading schemes. Who finally pays for these incentives is yet unclear. These incentives and possible milestones, and their suitability over time are shown in the figure below, as viewed by (IEA, 2012). Figure 30 CCS incentives as part of the various business models, in the view of IEA (IEA, 2012). -94-

95 This figure shows that carbon price can be seen as suitable incentive after specific milestones are passed. For CCS to pass the first milestone, other aspects play a role than those relevant to passing the second milestone. The role of CO 2 transport infrastructure can be seen as an enabler for both overall cost reduction and can be a requirement for wide-scale deployment. The IEA also suggests different policy throughout the development of CCS, as shown in the figure below (IEA, 2012) Figure 31 Key elements of a CCS business model that may change over time, according to IEA (IEA, 2012). Given that CCS as a whole is a merit good in an economic sense, its wide-scale deployment will not happen by itself assuming rational economic behaviour of actors. A public role in these cases is seen in aligning public and private goals, organizing the required political processes, creating policy and regulation. The IEA argues for an evolving rationale for policy intervention in order to overcome market defects. -95-

96 Figure 32 Policy and regulatory solutions that may apply to CCS during its evolution over time, with the types of failure of current markets, and example policies failure to overcome these (IEA, 2012). The IEA policy document argues for a policy framework where the policy mix would evolve over time, with explicit phases of policy punctuated by break points or gateways. These gateways would allow a smooth transition between current policies, which focus on learning how to reduce costs of the technology, and future policies, which will offer incentives to stimulate take-up of CCS wherever it is costeffective to do so. (IEA, 2012) This policy is furthermore illustrated by ZEP (ZEP, 2012) that shows a number of recommended CCS measures with listed benefits. These include feed-in tariffs, CCS purchase contracts, setting aside a volume of EUAs, earmarking EUA revenues for CCS capital grants, capacity payments, public loan guarantees and tax breaks for EOR. All these policy measures are required to incentivize the development of CCS is such a way that actors in the field of CCS act according to the political aim of the government, respecting the economic incentives and behaviour these actors have. Findings on incentive and policy requirement for CCS development In contrast to the current situation, wide-scale introduction of CCS require a clear policy and regulatory framework and sufficient incentives to allow development to take place. Along the path of development, key policy regulation and incentives should be matched to the specific actor in CCS development. The roles of each actor, their risks and opportunities in the larger CCS business model should be clear, as well as for the actors in CO 2 transport infrastructure development. This means that CCS needs to be at the forefront of government activity or otherwise it will not be implemented on a large scale in the near future. Only if the political willingness and support is present, will policy-makers be able to provide the necessary incentives for stakeholders in the CCS chain. -96-

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