Energy Technology Perspectives 2017 The Role of CCS in Deep Decarbonisation Scenarios

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1 Energy Technology Perspectives 2017 The Role of CCS in Deep Decarbonisation Scenarios Dr. Uwe Remme, IEA International Energy Workshop, 19 June 2018, Gothenburg IEA

2 How far can technology take us? 40 Reference Technology Scenario RTS Technology area contribution to global cumulative CO 2 reductions Global CO 2 reductions by technology area 30 2 degrees Scenario 2DS GtCO Pushing energy technology to achieve carbon neutrality by 2060 could meet the mid-point of the range of ambitions expressed in Paris.

3 How far can technology take us? Technology area contribution to global cumulative CO 2 reductions Global CO 2 reductions by technology area Gt CO 2 cumulative reductions in Reference Technology Scenario RTS Efficiency 40% GtCO degrees Scenario 2DS Renewables 35% Fuel switching 5% 10 Nuclear 6% CCS 14% Pushing energy technology to achieve carbon neutrality by 2060 could meet the mid-point of the range of ambitions expressed in Paris.

4 How far can technology take us? 40 Reference Technology Scenario RTS GtCO Technology area contribution to global cumulative CO 2 reductions Global CO 2 reductions by technology area Gt CO 2 cumulative reductions in 2060 Beyond 2 degrees Scenario B2DS 2 degrees Scenario 2DS Efficiency 40% 34% Efficiency 40% Renewables Renewables 35% 15% 35% Fuel switching Fuel 5% switching 5% 18% Nuclear 6% Nuclear CCS 14% 6% 1% CCS 14% 32% Pushing energy technology to achieve carbon neutrality by 2060 could meet the mid-point of the range of ambitions expressed in Paris.

5 Tracking Clean Energy Progress: only 4 technologies on track Power Industry Transport Buildings Renewable power Solar PV Onshore wind Offshore wind Hydropower Bioenergy Geothermal Concentrating solar power Nuclear power Natural gas-fired power Coal-fired power CCS in power Cement Chemicals Steel Aluminum Pulp and paper CCS in industry Electric vehicles International shipping Fuel economy Trucks Transport biofuels Aviation Rail Building envelope Heating Cooling Lighting Appliances & equipment Data centres and networks Ocean Energy Integration Energy storage Demand response Hydrogen Smart grids Digitalization Renewable heat Source: IEA (2018), Tracking Clean Energy Progress,

6 Large-scale CCS projects power generation and fuel transformation Power generation Industry and fuel transformation Carbon capture, utilisation and storage remains far off track from the 2030 goal.

7 ETP modelling framework Primary energy Conversion sectors Final energy End-use sectors Service demands Renewables Electricity Gasoline Industry TIMES models Material demands Fossil Nuclear Electricity and heat generation Buildings Long-term simulation etc. Transport Fuel/heat delivery ETP-TIMES Supply model (bottom-up optimisation) Mobility Model (MoMo) Four soft-linked models based on simulation and optimisation modelling methodologies Model horizon: in 5 year periods Electricity T&D Fuel conversion Diesel Natural gas World divided in model regions/countries depending on sector For power sector linkage with TIMES dispatch model for selected regions to analyse electricity system flexibility Heat Space heating Water heating Lighting Passenger mobility Freight transport

8 Remaining CO 2 emissions in the 2DS and B2DS 40 2DS GtCO The power sector is virtually decarbonised by 2060; Industry (57%) and transport (36%) are the largest sources of emissions in Other transformation Power Transport Industry Buildings Agriculture The remaining CO 2 emissions in industry and power must be targeted for the B2DS Negative emissions are necessary to achieve net-zero emissions in 2060

9 Remaining CO 2 emissions in the 2DS and B2DS 40 2DS 40 B2DS GtCO GtCO Other transformation Power Transport Industry Buildings Agriculture The remaining CO 2 emissions in industry and power must be targeted for the B2DS Negative emissions are necessary to achieve net-zero emissions in 2060

10 Role of CCS in CO 2 emission reductions in the B2DS RTS Power Cumulative reductions Industry Fuel transformation RTS B2DS 2DS 2DS B2DS RTS 2DS B2DS Cumulative CO 2 captured CCS crucial for tackling process emissions in industry, while BECCS in power and fuel transformation provides negative emissions to offset hard-to-decarbonise parts in transport and industry.

11 Decarbonising electricity Global electricity generation B2DS Other Wind STE 100% 80% Generation mix Renewables Bioenergy with CCS TWh gco 2 /kwh Solar PV Biofuels and waste Hydro 60% Nuclear Coal with CCS Nuclear Coal with CCS Coal 40% 20% Coal w/o CCS Gas with CCS Oil Natural gas with CCS Natural gas CO 2 intensity 0% RTS 2DS B2DS Gas (incl. oil) w/o CCS Renewables dominate electricity generation in the 2DS and B2DS. Thanks to bioenergy with CCS, the average global CO 2 intensity falls below zero after 2050.

12 With higher capture rates, CCS with coal gets more hours Variation of capture rate for coal power plants with CCS TWh B2DS capture rate 95% B2DS capture rate 92% B2DS (original capture rate 85%) The B2DS calls for higher capture rates lowering the remaining emissions from generation with fossil CCS.

13 CCS: a cross-cutting strategy of increasing importance in B2DS Global CO 2 captured and stored as a share of total produced direct CO 2 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% B2DS - CHEMICALS 2DS - CHEMICALS RTS - CHEMICALS B2DS - CEMENT 2DS - CEMENT RTS - CEMENT B2DS - CRUDE STEEL 2DS - CRUDE STEEL RTS - CRUDE STEEL Key energy-intensive industrial sectors approach the 70-80% level of CO 2 emitted being captured and stored by 2060 in the B2DS

14 More CCS in B2DS, but from smaller sources CO 2 captured by size and concentration of stream More CO 2 is captured from more expensive, lower-concentration and smaller sources in the B2DS.

15 BECCS in 1.5 C scenarios Global CO 2 emissions Annual CO 2 stored by BEECS B2DS B2DS Source: Rogelj et al., (2018) Scenarios towards limiting global mean temperature increase below 1.5 C Negative emission technologies, such as BECCS, needed to reach globally net-negative emissions in the second half of the century.

16 BECCS or BECCU? Bioenergy with CCS + Fossil fuel use Bioenergy feedstock Bioethanol plant Ethanol Fossil kerosene Airplane CO 2 emitted from fossil carbon CO 2 balance CO 2 captured and stored = negative emissions Substitution Bioenergy with carbon capture and use (BECCU) Bioenergy Bioethanol Ethanol feedstock plant CO 2 captured Fischer- Tropsch synthesis Synthetic kerosene Airplane CO 2 emitted from biomass carbon Carbon-free electricity Electrolysis Hydrogen CO 2 balance

17 BECCS or BECCU? Bioenergy with CCS + Biofuel (or offset fossil fuel) use Bioenergy feedstock Bioethanol plant Ethanol Bio-kerosene or offset fossil kerosene Airplane CO 2 emitted from biomass carbon CO 2 balance CO 2 captured and stored = negative emissions Bioenergy with carbon capture and use (BECCU) Bioenergy Bioethanol Ethanol feedstock plant CO 2 captured Fischer- Tropsch synthesis Synthetic kerosene Airplane CO 2 emitted from biomass carbon Carbon-free electricity Electrolysis Hydrogen CO 2 balance

18 Conclusions Lack of progress in deployment of CCS: - 17 large-scale CCUS projects in operation today, with an annual capture capacity of around 30 MtCO 2. - Only one large-scale project has taken a final investment decision since 2014 (Yanchang CCS project in China). - CCUS investment accounted for 0.1% of global investment in clean energy in Current trends in stark contrast to the need for CCS with increasing climate ambition, with CCS providing 17% of cumulative CO 2 reductions by 2060 (relative to RTS): - Very few alternatives to CCS for hard-to-decarbonise industrial processes. - Coal with CCS in power becomes at some point too carbon-intensive in the B2DS; R&D aiming at higher capture rates could allow for an extended operation. - BECCS needed to offset emissions in parts of the energy system more difficult to decarbonise and to potentially turn emissions net negative in the second half of the century, but availability of sustainable biomass limiting factor. More CO 2 captured in B2DS, but from more diluted and smaller sources, in particular industry: - Often more isolated locations, presenting a challenge for transport and storage. - Innovation is needed to improve the performance of capture technologies with small and diluted sources of CO 2.

19 IEA