Amec Foster Wheeler 2016.

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2 Cleveland Institute of Engineers Carbon Capture and Storage Amec Foster Wheeler

3 CCS and Emission Reduction Overall drive is emission reduction Climate change driven Targets set globally for impact on mean temperature UK Commitment to 80% reduction by 2050 All sectors impacted Industry MtCO 2 e Has been declining since 1970 Partly due to economics Needs to decarbonise as part of wider efforts 3

4 Context - EU27 Reduction by Technology Type For the 2 C 4 C 1.60 EU27 Technology Type European Union-Power generation efficiency and fuel switching-2ds-4ds European Union-Nuclear-2DS-4DS European Union-End-use fuel switching-2ds-4ds European Union-End-use fuel and electricity efficiency-2ds-4ds European Union-Renewables-2DS-4DS European Union-Carbon capture and storage-2ds-4ds

5 How do we achieve that? What options do we have Highly dependent on the industrial sector But there are issues Sustainability Environmental Business Survivability Competition Economic disadvantages Decreased investment Ability to modify Stranded assets Locked in CO 2 production High level options Electricfication Fuel switching Feed stock switching Abatement New technology Energy saving Efficiency Integration Material efficiency 5

6 What is CCS? It is not a single technology strand Carbon technology that aims to decarbonise, prevent Carbon based emissions from entering the atmosphere Capture abatement or prevention technology step condition treatment of captured carbon dioxide streams fro transport and storage transport via pipeline or ship (or other!) Storage storage of captured Carbon Dioxide in a physical store Depleted hydrocarbon formations Deep saline formations re-use re-use of the Carbon Dioxide for other purposes MMV measuring, monitoring and verification 6 Amec Foster Wheeler

7 Capture routes a simplified picture EMISSIONS FUEL POWER AND HEAT CAPTURE CO 2 AIR STEAM CO 2 FUEL GASIFICATION SHIFT, GAS CLEANUP & SEPARATION SYNGAS POWER AND HEAT CO 2 CONDITIONING, DEHYDRATION AND COMPRESSION AIR/OXYGEN POTENTIAL FEEDSTOCK AIR AIR SEPARATION FUEL POWER AND HEAT GAS CLEANUP CO 2 POTENTIAL FUEL STOCKS FEEDSTOCK FEEDSTOCK TREATMENT CHEMICAL PROCESS PROCESS EMISSIONS CO 2 FEEDSTOCK CHEMICAL PROCESS PROCESS EMISSIONS

8 Why is it important for Industry UK Carbon Dioxide Emission targets 80% reduction by 2050 UK industry emitted 87MtCO 2 e in 2013 Agriculture, 4.93 Industrial Process, Land Use Change, UK Emissions, MtCO 2 e Waste Management, 0.25 Public, 9.49 Residential, Transport, Energy Supply, Business,

9 ICCS and Teesside 9

10 Teesside Collective Industrial CCS Study Technical, technical options and cost information Looks at capture options on 4 sites Growhow Lotte SSI BOC HMU Transport Infrastructure 5 million tonnes per annum 15 million tonnes per annum Storage Offshore Goldeneye (part of Peterhead CCS Project) Offshore Endurance store, 5/42 (part of White Rose CCS Project) Non-technical Business case Economics 10

11 How did we do that? Industrial CCS Study Define the drivers/issues for each emitter Workshop the solutions Emitters constraints and drivers Business Site Process Screening criteria Options Options assessments High level look at possible options Screening Deeper look at selected options Basic engineering and costing of selected option or options 11

12 SSI example SSI was the most complicated case Number of Emission points Flows paths Energy pathways Issues with plant Distributed Old But typical of its generation of I & S works. 12

13 SSI Example Concept 1 Post combustion on new power plant Concept 2 Precombustion, non-shifted Concept 3 Precombustion Shifted Blue Sky Workshop Detailed Evaluation Down Selection 13

14 Option 1 Development Selected for costing Attribute Captured CO 2 Electrical Load Heat demand Reference Plant Attributes / issues Areas for work during FEED Outcome 1.6 million te pa 209 te/hr (100barg) 34 MWe 211 MWth Boundary Dam End of Pipe Solution Heat demand Flue gas consistency Heat Integration with wider site 14

15 Challenges Diverse point source in a steel works Compatible technology For SSI Addressing some of the more problematic streams/processes Cost Retrofit can the work be done on plant that is significantly old? Space & distance in site Different challenges All sites are different What do you do for major existing plant? Reluctant to modify What can we do to reduce carbon input? What technology is coming forward (ULCOS, DRI) Need to address more challenging emissions

16 Other Sites Growhow minimum issues Already produces pipeline quality Carbon Dioxide Required only compression BOC Minimum issues CCP Core Plant CCP Utilities PS A Reformer Some technology options to consider Lotte Smallest emitter Typical retrofit issues Some concern of heat requirements, but achievable Package units available at this size from US 16

17 Lotte PET plant PET is the basic material of plastic drink bottles Recently doubled capacity Carbon Dioxide is produced from heaters in the process Considered 13 options 5 moved to screening Amine plant selected Recovers 90% Issues Integration Impact of selection of an advanced amine is other flue treatment required? Is it flexible enough Other learning non technical drivers key Clients have strong sustainability goals leading to other economic considerations Existing Plant CCS New Plant

18 Transport Blue Big Blue Route 15MM tpa, tpa, 4 Sites

19 Network - offshore Two options Shell Goldeneye (DHF) / Captain DSF NG 5/42 DSF (Deep Saline Formation) Common shore landing No real issues Except that of the cost Assumed one or both would succeed in the DECC competition Funding was withdrawn November 2015 Both projects suspended

20 The economics? Difficult to assess the impact, but Add 85 million to GVA/year Support an additional 350 jobs Ensuring industry remains in the UK 2,400 jobs in the 4 emitters 3,500 in their supply chain Contribute 290 million GVA directly 400 million in their supply chain That s for just the 4 plants For 15 million tonnes/year 1,100 jobs Add 450 million GVA/year But the CAPEX costs are large 5.4 billion, 95/tonne over 20 years Individual costs vary from 16 to 302/tonne

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22 Business Case Output Teesside ICCS is technically & economically viable: Scenario discounted capex cost ranges bn Over 20 years the entire ICCS Chain for the Reference Scenario requires undiscounted financial support of 5.4bn ( 1.5bn PV 7 ) equating to 95/T for 56.5mT CO 2 stored. (13% IRR. 7% Discount Rate) Capture 47%, Gathering 3%, Offshore 50% Trebling the infrastructure only requires an additional 8% of support ( 104m) Financial Support ( /T over 20 years) Excluding Return Undiscounted PV7 Ammonia Steel Hydrogen PET Including Return Undiscounted PV7 Ammonia Steel Hydrogen PET Pale Blue Dot Ltd 2015

23 Commercial Support Mechanism Three options for a Funding Mechanism reviewed: a Storage Mechanism Payment a CO 2 CfD Emitter Mechanism a hybrid Image Source: Societe Generale Pale Blue Dot Ltd

24 Can we deploy industrial CCS? Retrofit options are varied Some are far easier than others Some processes may need to be completely rebuilt Others are simple to apply CCS to Support is needed Current technology is expensive Other studies emerging globally Repeated outcomes Same issues Outcomes of the industrial CCS work Positive outlook Deployable technology Cheaper in a cluster Industry is keen, sees the future problems they face CCS is critical Government support is still needed Other things can be done 24

25 What next? On 25 th November HMG cancelled the current CCS program Withdrew a ring-fenced 1billion in HMG support No notice was given to the two projects Peterhead and White Rose are now cancelled These were the stores for Teesside The previous competition was cancelled in second competition launched 2014 FEED studies 2016 Decision date 2019 Deployment Impacts Increased cost of emission reduction Pressure on other sectors Damage to sector confidence 25

26 Q&A 26

27 James Watt Process Engineering Manager Amec Foster Wheeler Lingfield Point Darlington, DL1 1RW Untied Kingdom t: , e: