CCT2009. Dresden, 20 May Clean Coal Technologies An IEA View on Potentials and Perspectives

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1 CCT2009 Dresden, 20 May 2009 Clean Coal Technologies An IEA View on Potentials and Perspectives Antonio Pflüger Head, Energy Technology Collaboration Division International Energy Agency INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

2 Today s Situation Current energy trends are patently unsustainable socially, environmentally, economically Oil will remain the leading energy source but the era of cheap oil is over, although price volatility will remain Limiting temperature rise to 2 C will require significant emission reductions in all regions & technological breakthroughs The present economic worries do not excuse back-tracking or delays in taking action to address energy challenges INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

3 What happens if no action is taken (ETP Baseline Scenario) By 2050 Coal demand would almost triple (+192%) Gas demand increase by 138% Oil demand grow by 65% and Import dependency of most countries would further increase CO 2 emissions increase by 130% IPCC: Cutting by half necessary to prevent dangerous global warming INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

4 Political Background for IEA Work G8 Gleneagles 2005 IEA to develop more scenarios for a more sustainable energy future: ETP 2006, ETP 2008 and WEO 2007/2008 IEA Ministerial conclusions, May We will promote clean coal and press ahead through the IEA and the CSLF with the full scale demonstration and early deployment of CCS, paying due regard to regulatory and safety issues.... G8 Heiligendamm 2007 G8 Hokkaido 2008 Launch of the Global CCS Institute, April 2009 G8 Italy 2009 IEA Ministers October 2009 OECD/IEA 2009 INTERNATIONAL AGENCY AGENCE INTERNATIONALE DE L ENERGIE

5 Cumulative energy supply investment in the Reference Scenario,, Coal 3% $0.7 trillion Biofuels <1% $0.2 trillion Power 52% $13.6 trillion Oil 24% $6.3 trillion Gas 21% $5.5 trillion Transmission & distribution 50% Power generation 50% Shipping 4% Refining 16% Exploration and development 80% Transmission & distribution 31% LNG chain 8% Exploration & development 61% Shipping & ports 9% Mining 91% Investment of $26 trillion, or over $1 trillion/year (> 1% global GDP), is needed, but the credit squeeze could delay spending, potentially setting up a supply crunch once the economy recovers OECD/IEA

6 Reductions in energy-related CO2 in the 450 Policy Scenario Gigatonnes Reference Scenario 35% (5.2 Gt reduction) OECD+ Non OECD 65% (9.5 Gt reduction) 450 Policy Scenario CCS 21% Nuclear 14% Renewables & biofuels 18% Energy efficiency 47% CCS 10% Nuclear 6% Renewables & biofuels 25% Energy efficiency 59% World total CCS 14% Nuclear 9% Renewables & biofuels 23% Energy Efficiency 54% OECD/IEA World Energy Outlook 2008, IEA OECD and non OECD countries must both work towards reducing CO2 emissions Energy efficiency is the largest contributor. Renewables, nuclear and CCS also play key roles.

7 Global electricity generation (450 ppm Scenario) 100% 75% 18% 1% 1% 16% 15% 20% (1%) 9% 4% 5% 22% 40% Wind Hydrogen Other Renewables Biomass & Waste 50% 25% 6% 41% 18% 18% 2% Hydro Nuclear Gas Oil Coal 21% OECD/IEA % World Energy Outlook 2008, IEA Renewables and nuclear power will increase. Especially the share of renewables would achieve 40%. While the share of coal halves to 21%, coal will remain one of the largest electricity sources.

8 Total power generation capacity today and in 2030 by scenario Coal Gas Nuclear 1.2 x today 1.5 x today 1.8 x today Hydro 2.1 x today Wind 13.5 x today Other renewables 12.5 x today Coal and gas with CCS 15% of today s coal & gas capacity GW OECD/IEA Today Reference Scenario Policy Scenario 2030 In the 450 Policy Scenario, the power sector undergoes a dramatic change with CCS, renewables and nuclear each playing a crucial role

9 Energy related related CO 2 emissions from existing & future power plants in the Reference Scenario Gigatonnes Future plants in OECD Future plants in non OECD Existing plants in non OECD Existing plants in OECD Although 75% of power sector CO 2 emissions in 2020 are already locked in, investments in the next decade will be critical to a low carbon future in the longer term OECD/IEA

10 The Reference Scenario: Efficiency improvements in coal fired generation 45% Mostly supercritical in OECD, some in China Supercritical in OECD, some USC and IGCC; more supercritical in non OECD countries USC and IGCC in OECD; some USC and IGCC in non OECD countries OECD Non OECD 40% World average 35% 30% The average efficiency of coal fired generation rises from 34% in 2006 to 38% in 2030, as supercritical technology initially & then ultra supercritical become widespread OECD/IEA

11 Historical global electricity consumption TWh Global Credit Crunch Dot com Bubble Burst Asian Economic Crisis Black Monday Stock Market Crash US Recession 2 nd Oil Price Shock 1 st Oil Price Shock End of World War II OECD/IEA The IEA estimates that global electricity consumption could drop by as much as 3.5% in 2009, the first contraction since the end of the Second World War.

12 Scenarios vs. Future Scenarios i.a. assume perfect markets and rational decisions but a number of parameters are given Business as usual or new policies? Unforeseen influences, like financial crisis Technical development and competition Business as usual is probably the most unlikely future INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

13 Scenarios beyond 2030 to 2050 Baseline Emissions 62 Gt TECHNOLOGY PERSPECTIVES Scenarios & Strategies to Gt in 2005 BLUE Map Emissions 14 Gt BLUE Map is a least cost scenario to achieve a 50% emissions cut by 2050, USD 200/t CO2 applied (marginal cost) In support of the G8 Plan of Action OECD/IEA INTERNATIONAL AGENCY

14 Power Generation Mix TECHNOLOGY PERSPECTIVES ¼ fossil + CCS Scenarios & Strategies to 2050 BLUE in 2050: 18 Gt CO2 through change in power production patterns ¼ fossil + CCS, ¼ nuclear, nearly half renewables In support of the G8 Plan of Action OECD/IEA INTERNATIONAL AGENCY

15 Summarizing The Case for CCS Highest efficiencies are a prerequisite Substantive efforts required to reduce CO2 emissions (28 Gt in 2006 to 14 Gt in 2050) CCS can contribute 10 Gt to reductions (10% power production, 9% industry) Without CCS either total cost would be 70% higher or 2050 emissions would be 70% higher Can CCS deliver? Potential: Regional storage potential estimates vary from years to more than 2000 years of ETP BLUE Scenario emissions Technological developments, experiences with demonstration projects and legal frameworks are promising Industrial commitment is impressive In support of the G8 Plan of Action OECD/IEA TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 INTERNATIONAL AGENCY

16 IEA Reports to the G8 in 2008, Hokkaido Summary Full Report INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

17 CCS will be essential in securing large reductions in coal power station emissions INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

18 3 IEA/CSLF Workshops on Near-Term Opportunities for CCS Comprehensive set of recommendations for 2008 G8 summit OECD/IEA 2009 INTERNATIONAL AGENCY AGENCE INTERNATIONALE DE L ENERGIE

19 Technical Study on CO 2 Capture Ready Plants In support of the G8 Plan of Action Sponsored by the IEA Greenhouse Gas R&D Programme Has fed into the EU CCS Directive CCS Recommendations have concluded that further discussion is needed on what is capture readiness International workshop planned for 2 nd half of 2009 with documentation of results OECD/IEA 2009 INTERNATIONAL AGENCY AGENCE INTERNATIONALE DE L ENERGIE

20 Financing Needs on top of Baseline BLUE USD 45 trillion (1.1% of GDP in addition to the >1% existing investment needs) Demand side investments dominate (80%) Undiscounted fuel savings BLUE USD 51 trillion ( ) However valuation at market prices is debatable The problem for BLUE is not the cost but the burden sharing Financing needs USD +10 to +100 bln/yr RD&D (short to mid-term) USD +100 to +200 bln/yr learning investments (short to mid-term) USD to bln/yr commercial investments (mid-long term) In support of the G8 Plan of Action OECD/IEA TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 INTERNATIONAL AGENCY

21 Cumulative Additional Investment and Fuel Savings TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 INTERNATIONAL In support of the G8 Plan of Action OECD/IEA AGENCY

22 Public Sector Energy R&D in IEA Countries USD 10 bln/yr TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 $10 Billion today, for BLUE at least to be doubled Distribution of risk, no clear correlation between budget and R&D results In support of the G8 Plan of Action OECD/IEA INTERNATIONAL AGENCY

23 Roadmaps for Key Technology Options that account for 87% of reduction in BLUE Supply side CCS power generation Nuclear III + IV Wind Biomass IGCC & co-combustion Solar PV Solar CSP Coal IGCC Coal USCSC 2 nd generation biofuels Demand side Energy efficiency in buildings Heat pumps Solar space and water heating Energy efficiency in transport Electric and plug-in vehicles Fuel cell vehicles CCS in industry Industrial motor systems TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 INTERNATIONAL In support of the G8 Plan of Action OECD/IEA AGENCY

24 Potential of Efficiency Improvements in the short term Coal-fired power and CHP plants worldwide account for ~25% of total CO2 emissions (7.5 bn t CO2/year in 2005) Replacement potential ~ 300GW Upgrade potential ~ 200GW Globally bn t CO2/year reduction possible by moving to current state of the art pcplants Higher reduction with possible improvement in higher steam conditions INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

25 IEA Work in Cleaner Fossil Fuels Recent Publications INTERNATIONAL AGENCY Forthcominig Reports Potential of upgrade and replacement of older coal fired power plants in major coal using economies. Developments in coal fired power generation and its potential for higher efficiency. Case studies on recently constructed supercritical or ultrasupercritical coal fired units (update). Assessment of full coal process chain for efficiency improvement in power generation. OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

26 Key Messages Transition to a more sustainable energy future is financially achievable Organisation of change the is the biggest challenge Fossil fuels will remain main pillars of energy supply High energy efficiency and CCS are indispensible components INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE

27 For more information on IEA and G8 INTERNATIONAL AGENCY OECD/IEA 2009 AGENCE INTERNATIONALE DE L ENERGIE