Economics of Carbon Capture, Utilization, and Storage. Carey W. King, PhD IEA GHG Summer School July 8, 2014

Transcription

1 Economics of Carbon Capture, Utilization, and Storage Carey W. King, PhD IEA GHG Summer School July 8, 2014

2 Flow of Talk CCUS system overview (who is involved) Physical processes that increase costs Example of CCS system analysis (Texas case) capture: Coal-fired power plants Distribution: pipelines storage: saline reservoirs value added : enhanced oil recovery (EOR) Will it happen in Texas? Lots of and oil, but also NG Carey W. King IEA GHG Summer School 2014 July 8,

3 The CCUS system is represented by four major business entities System Boundary Fossil fuels, biomass, limestone M Sources (e.g., power plants & others) Electricity, products Pipelines N Storage operations Consumer emissions P for valueadded Operations (e.g., EOR) Each business entity has capital and operating costs Each business entity might have revenue streams We can think of emitted from coal, NG, and oil by anyone can incur a cost Carey W. King IEA GHG Summer School 2014 July 8,

4 The CCUS system is represented by four major business entities System Boundary Fossil fuels, biomass, limestone M Sources (e.g., power plants & others) Electricity, products Pipelines N Storage operations emissions Consumer P for valueadded Operations (e.g., EOR) Each business entity has capital and operating costs Each business entity might have revenue streams We can think of emitted from coal, NG, and oil by anyone can incur a cost Carey W. King IEA GHG Summer School 2014 July 8,

5 The CCUS system is represented by four major business entities System Boundary Fossil fuels, biomass, limestone M Sources (e.g., power plants & others) Electricity, products Pipelines N Storage operations emissions Consumer P for valueadded Operations (e.g., EOR) Each business entity has capital and operating costs Each business entity might have revenue streams We can think of emitted from coal, NG, and oil by anyone can incur a cost Carey W. King IEA GHG Summer School 2014 July 8,

6 The CCUS system is represented by four major business entities System Boundary Fossil fuels, biomass, limestone M Sources (e.g., power plants & others) Electricity, products Pipelines N Storage operations emissions Consumer P for valueadded Operations (e.g., EOR) Each business entity has capital and operating costs Each business entity might have revenue streams We can think of emitted from coal, NG, and oil by anyone can incur a cost Carey W. King IEA GHG Summer School 2014 July 8,

7 The CCUS system is represented by four major business entities System Boundary Fossil fuels, biomass, limestone M Sources (e.g., power plants & others) Electricity, products Pipelines N Storage operations emissions Consumer P for valueadded Operations (e.g., EOR) Each business entity has capital and operating costs Each business entity might have revenue streams We can think of emitted from coal, NG, and oil by anyone can incur a cost Carey W. King IEA GHG Summer School 2014 July 8,

8 The CCUS system is represented by four major business entities System Boundary Fossil fuels, biomass, limestone M Sources (e.g., power plants & others) Electricity, products Pipelines N Storage operations emissions Consumer P for valueadded Operations (e.g., EOR) Each business entity has capital and operating costs Each business entity might have revenue streams We can think of emitted from coal, NG, and oil by anyone can incur a cost Carey W. King IEA GHG Summer School 2014 July 8,

9 Why capture from one facility design or another? The cost of capture increases as the concentration of in the gas stream decreases Thermodynamic work is required to separate (and O 2 from air for oxy-fuel) This necessitates energy that would otherwise be sold as electricity (for example) Other major energy cost is compressing from gas to liquid form for transport Location relative to storage Carey W. King IEA GHG Summer School 2014 July 8,

10 Cost factors differ among capture options and sources IPCC, Carey W. King IEA GHG Summer School 2014 July 8,

11 Cost ($/t ) of captured < cost of avoided Avoided for conceptualizing a power plant with same net electricity output IPCC, Carey W. King IEA GHG Summer School 2014 July 8,

12 Range of cost additions for capture Cost-effective at $/t captured from coal Post-combustion (coal) $/MWh ( %) IGCC (coal) $/MWh ( %) NGCC (natural gas) $/MWh ( %) non- capture pulverized coal plant usually cheaper than IGCC Today, possibly cheapest power w/ capture, but not cheapest cost $/t avoided 1. EIA AEO LCOE estimates: 2. NETL (2010) Cost and Performance Baseline for Fossil Energy Plants Volume 1: Bituminous Coal and Natural Gas to Electricity, DOE/NETL-2010/1397. Carey W. King IEA GHG Summer School 2014 July 8,

13 Consider Capturing from coal-fired power plants for storage and oil recovery System Boundary Electricity N Saline operations (storage model) Coal M Coal-fired power plants (dispatch model) Pipeline (cost model) Consumer emissions N EOR operations (storage model) Oil Each model calculates capital and operating costs Electricity and oil are sold for revenue emitted from coal, NG, and oil can incur a cost (electric grid) Carey W. King IEA GHG Summer School 2014 July 8,

14 Study of large scale CCS network scenarios in Texas Many (3 or 21) existing coal-fired generation units 10 candidate enhanced oil recovery (EOR) fields Includes injecting in saline formations Pure flood ( t /BBL oil) Higher than historical WAG method using t /BBL What are the economics of all major players combined? Coal-fired power plants Pipelines EOR and saline injection sites Carey W. King IEA GHG Summer School 2014 July 8,

15 Carey W. King IEA GHG Summer School July 8, 2014 King et al., Env. Res. Lett. (in press)

16 There is a cost for net storage (20-year time frame) Slow (3 coal EGUs) EOR scenarios 346 MMBBL production 223 Mt for EOR 240 Mt captured and stored 66 Mt stored overall (net) 7-25 $/t Fast (21 coal EGUs) EOR scenarios 480 MMBBL production 284 Mt for EOR 1,500 Mt captured and stored 1,100 Mt stored overall (net) 7-18 $/t Carey W. King IEA GHG Summer School 2014 July 8,

17 millions ($2009) Distribution of costs among business units of CCS system 70,000 60,000 Capital: 54% O&M: 46% 50,000 40,000 30,000 20,000 10,000 Capital: 34-40% O&M: 60-66% Slow EOR Fast EOR Scenarios EOR (cap) storage (cap) pipe (cap) capture (cap) EOR (O&M) storage (O&M) pipe (O&M) Carey W. King IEA GHG Summer School 2014 July 8,

18 Millions ($2009) NPV of CCUS network < 0, larger network more negative $0 ($10,000) ($20,000) ($30,000) 0.05 $2009/kWh Industrial Residential Electricity Price Scenario 1: Slow EOR, CO2 sales 3: Fast EOR, CO2 sales 2: Slow EOR, CO2 penalty (including oil) 4: Fast EOR, CO2 penalty (including oil) 2: Slow EOR, CO2 penalty (excluding oil) 4: Fast EOR, CO2 penalty (excluding oil) Carey W. King IEA GHG Summer School 2014 July 8,

19 Millions ($2009) NPV of CCUS network < 0, larger network more negative $0 ($10,000) ($20,000) Including penalty on oil combustion emissions ($30,000) 0.05 $2009/kWh Industrial Residential Electricity Price Scenario 1: Slow EOR, CO2 sales 3: Fast EOR, CO2 sales 2: Slow EOR, CO2 penalty (including oil) 4: Fast EOR, CO2 penalty (including oil) 2: Slow EOR, CO2 penalty (excluding oil) 4: Fast EOR, CO2 penalty (excluding oil) Carey W. King IEA GHG Summer School 2014 July 8,

20 CCUS in Texas: killed by NG? Texas Clean Energy Project West Texas, IGCC Poly-gen plant Electricity: (400 MW gross power, 245 MW net power) Urea: kt/yr (for fertilizer) : 2-3 Mt /yr (for enhanced oil recovery) Total cost ~ $2.5B Received 450 $M from U.S. government CPS Energy, San Antonio, Texas (Jan 6, 2014): With abundant supplies of natural gas below our feet and prices for natural gas remaining moderate, the economics of energy produced from coal generation with carbon-capture have changed. The prudent option was to allow our agreement with Summit to end Carey W. King IEA GHG Summer School 2014 July 8,

21 Carey W. King Assistant Director, Energy Institute Research Associate, Jackson School of Geosciences Lecturer, McCombs School of Business e: w: careyking.com Reference: King, Carey W, Gülen, Gürcan, Cohen, Stuart M, and Nuñez-Lopez, Vanessa, The system-wide economics of a carbon dioxide capture, utilization, and storage network: Texas Gulf Coast w/ pure EOR flood. Environmental Research Letters, 8, , Thank you to Gulf Coast Carbon Center.

22 Extra slides

23 Why capture from one facility design or another? Different designs Post-combustion (most existing power plants) extract from flue gas of power plant ~3-6% for NG; ~13-%-15% for coal - by volume Oxy-fuel combustion increase concentration in flue gas by burning in pure oxygen instead of air > 80% by volume (must 1 st separate oxygen from 21% in air) Pre-combustion (e.g., Integrated Gasification Combined Cycle) Capture from fuel before combustion: burn H 2, not CH 4 8%-20% pre-combustion by volume at high pressure Industrial sources Ammonia (~18%), cement (15-30%), bioethanol production IPCC, Carey W. King IEA GHG Summer School 2014 July 8,

24 Slides on Texas CCUS analysis

25 Four scenarios bound options for conceptual organization of a CCUS network Slow EOR production, 3 coal EGUs have capture; oil is produced over 20 years sales price, EOR entities purchase from coal-fired power plants with capture. Emissions Penalty on total emissions from (1) electricity from coal, NG, and oil; (2) combustion of oil from EOR Scenario 1 Scenario 2 Fast EOR production, > 12 coal EGUs have capture; oil produced in < 10 years Scenario 3 Scenario 4 Carey W. King IEA GHG Summer School 2014 July 8,

26 There is net storage for the EOR assumption of pure flood (20 yrs) Slow (3 coal EGUs) scenarios 346 MMBBL production 223 Mt for EOR 240 Mt captured and stored Fast (21 coal EGUs) scenarios 480 MMBBL production 284 Mt for EOR 1,500 Mt captured and stored Carey W. King IEA GHG Summer School 2014 July 8,

27 Net injected (Mt /yr) Slow scenarios produce oil slower to facilitate using high % of for EOR Conroe East White Point Fig Ridge Gillock Hastings Oyster Bayou Seeligson Tom Oconnor Tomball Webster Total Carey W. King IEA GHG Summer School 2014 July 8,

28 Net injected (Mt /yr) Fast scenarios produce oil as quickly as possible 70 Conroe East White Point Fig Ridge Gillock Hastings Oyster Bayou Seeligson Tom Oconnor Tomball Webster Total (Scenario 3) Total (Scenario 4) Carey W. King IEA GHG Summer School 2014 July 8,

29 EOR: oil and flows (20 yrs) Scenarios 1 and 2 Scenarios 3 and 4 Oil recovery (MMBBL) Net delivery (Mt ) Oil recovery (MMBBL) Net delivery (Mt ) Conroe East White Point Fig Ridge Gillock Hastings Oyster Bayou Tom O Connor Seeligson Tomball Webster TOTAL Carey W. King IEA GHG Summer School 2014 July 8,

30 Mt /yr How much from oil (via EOR)? flows ("slow" Scenarios 1 and 2) CO2 2 from oil (via EOR) combustion Captured and Stored CO2 2 Net CO2 2 for EOR Emissions from coal plants with CO2 2 capture Carey W. King IEA GHG Summer School 2014 July 8,

31 Mt /yr How much from oil (via EOR)? flows ("slow" Scenarios 1 and 2) CO2 2 from oil (via EOR) combustion Captured and Stored CO Mt Net CO2 2 for EOR 223 Mt Emissions from coal plants with CO2 2 capture +146 Mt +27 Mt Carey W. King IEA GHG Summer School 2014 July 8,

32 Mt /yr How much from oil (via EOR)? flows ("slow" Scenarios 1 and 2) 66 Mt stored overall (net) CO2 2 from oil (via EOR) combustion Captured and Stored CO Mt Net CO2 2 for EOR 223 Mt Emissions from coal plants with CO2 2 capture +146 Mt +27 Mt Carey W. King IEA GHG Summer School 2014 July 8,

33 MtCO2/yr How much from oil (via EOR)? CO2 flows ("fast" Scenario 3) CO2 2 from oil (via EOR) combustion Captured and Stored CO2 2 Net CO2 2 for EOR Emissions from coal plants with CO2 2 capture Carey W. King IEA GHG Summer School 2014 July 8,

34 MtCO2/yr How much from oil (via EOR)? CO2 flows ("fast" Scenario 3) Mt CO2 2 from oil (via EOR) combustion Captured and Stored CO2 2-1,540 Mt Net CO2 2 for EOR 284 Mt Emissions from coal plants with CO2 capture +170 Mt Carey W. King IEA GHG Summer School 2014 July 8,

35 MtCO2/yr How much from oil (via EOR)? CO2 flows ("fast" Scenario 3) ,100 Mt stored overall (net) Mt CO2 2 from oil (via EOR) combustion Captured and Stored CO2 2-1,540 Mt Net CO2 2 for EOR 284 Mt Emissions from coal plants with CO2 2 capture +170 Mt Carey W. King IEA GHG Summer School 2014 July 8,

36 Millions ($2009) EOR by itself can make money with low-cost electricity and & no emissions penalty on oil $4,000 $3,000 $2,000 $1,000 $0 ($1,000) ($2,000) ($3,000) ($4,000) ($5,000) ($6,000) 0.05 $2009/kWh Industrial Residential Electricity Price Scenario NPV of EOR only 1: Slow EOR, CO2 sales 3: Fast EOR, CO2 sales 2: Slow EOR, CO2 penalty (including oil) 4: Fast EOR, CO2 penalty (including oil) 2: Slow EOR, CO2 penalty (excluding oil) 4: Fast EOR, CO2 penalty (excluding oil) Carey W. King IEA GHG Summer School 2014 July 8,

37 Millions ($2009) EOR by itself can make money with low-cost electricity and & no emissions penalty on oil $4,000 $3,000 $2,000 $1,000 $0 ($1,000) ($2,000) ($3,000) ($4,000) ($5,000) ($6,000) 0.05 $2009/kWh Industrial Residential Electricity Price Scenario NPV of EOR only Including penalty on oil combustion emissions 1: Slow EOR, CO2 sales 3: Fast EOR, CO2 sales 2: Slow EOR, CO2 penalty (including oil) 4: Fast EOR, CO2 penalty (including oil) 2: Slow EOR, CO2 penalty (excluding oil) 4: Fast EOR, CO2 penalty (excluding oil) Carey W. King IEA GHG Summer School 2014 July 8,