Transforming the energy system in Västra Götaland and Halland linking short term actions to long term visions

Transcription

1 Transforming the energy system in Västra Götaland and Halland linking short term actions to long term visions The potential role of Carbon Capture and Storage (CCS) Jan Kjärstad, Energiteknik, Chalmers, THE EUROPEAN UNION The European Regional Development Fund

2 Possible mitigation pathway CCS: 8 largest emitters (bio or fossil) in the region apart from Ryaverket CCGT Capture rate 75% Mt fossil based CO2 NOT captured. Capture cost per ton* (estimated in a previous project) Total CCS system cost per ton* * Refers to capture cost calculated for Preem s two refineries and Borealis * Carbon Capture and storage in the Skagerrak/Kattegat-region, Chalmers-Tel-Tek, 2012

3 Rationale for CCS Chalmers University of Technology It cannot be expected that countries rich on fossil fuel resources will leave this substantial value (with respect to $ and SoS) in the ground e.g. Australia, Canada, China, India, Indonesia, Netherland, Norway, Russia, UK, USA Germany, Greece, Poland! Emission intensive industries (steel, cement, chemical, refineries) cannot maintain activity level and achieve substantial emission reductions without CCS Remaining Carbon budget 2014 onwards for 50% probability to reach 2 C target: 273 GtC! Corresponds to emission potential for ~34% of end 2013 proven reserves of fossil fuels

4 Carbon budget and fossil fuel resources IEA WEO 2014 citing IPCC: Carbon budget 2014 onwards for 50% chance of 2 C: 273 GtC! 804 GtC end 2013 Source: Kjärstad et al., Int. J. of Sustainable Water and Environmental Systems Volume 4, No. 1 (2012)

5 Cumulative CO2 reductions by sector and technology in IEA s 2DS scenario to 2050? CCS: Almost 90 Gt CO2 by 2050! 2DS: Emission reductions required to meet 2 C target (80% chance), source: IEA ETP 2015

6 Barriers to implementation of CCS Highly uncertain investment climate High cost of capture and no real business case apart from in onshore Enhanced Oil Recovery (EOR) applications But oil prices significantly down in 2015 and, additionally in the EU; CO2 emission price ca 7/ton Acceptance and liability issues London Protocol prohibits export of CO2 for offshore storage 30 out of 45 parties need to ratify an amendment to the Protocol EU ETS: Ship transport of CO2 for storage not eligible for emission allowances Biogenic CO2 not yet acknowledged by the UNFCCC or incentivized by the EU ETS.

7 Global Status of CCS Chalmers University of Technology At end 2014; 13 large-scale 1 projects in operation and 9 projects under construction Combined capture capacity ca 40 Mtpa 12 of the operating plants refers to natural gas processing or fertilizer or ethanol production high CO2-concentration in flue gas/well-known capture process. 2 of the plants under construction are power plants (US), 1 is a steel plant (UAE) 10 out of the 13 projects in operation used for EOR Worlds largest CCS operation will come online in 2015 Gorgon LNG project Australia injecting 3-4 Mtpa into aquifer 14 plants in advanced stage of development planning 1: GCCSI s definition of large-scale not found, includes 365 ktpa capture plant

8 Status of CCS in Europe Chalmers University of Technology 2 large-scale commercial projects operating, both in Norway, storing ca 1.7 mtpa combined. Cement pilot project in Brevik, Norway (Norcem/Cementa) Positive development in the UK; White Rose (Drax coal power plant) and Peterhead Gas CCGT Poland at least realizing the need for CCS Numerous projects shelved; acceptance and/or financing issues, no business case and significant investment uncertainties Significant CO2 offshore storage potential mostly in the North Sea

9 Status of CCS in the Nordic countries Two large-scale CCS systems operating, both commercial with injection into offshore aquifers (Sleipner, Snöhvit) Worlds only cement capture pilot (Norcem, Brevik) Most future emissions likely to originate from transport and industry, i.e. cement, chemical, gas/oil production, refineries and steel (assuming Danish power sector switching to biomass) Most sources located along the coastline facilitating the build-up of a CO2 transport infrastructure However mostly small and geographically dispersed sources raising the cost of CCS Storage and injection capacity in the Baltic Sea uncertain while promising in the North Sea and Kattegatt/Skagerrak-region

10 IEA Nordic ETP CCS in Nordic Industry (scenario Tonni corresponds to 2DS, scenario Inno corresponds to Carbon Neutral) IEA Nordic ETP 2013: Even combined with very aggressive action to increase energy efficiency, this is not enough to reduce industrial emissions to the extent necessary. Consequently, 50% of cement plants, and at least 30% of iron and steel and chemical industries, need to be equipped with CCS in To make this scenario possible, current uncertainty over national positions on CCS must be resolved.

11 Cost for transport of CO2 Chalmers University of Technology

12 Distribution of emission sources in the Nordic countries Largest: Rautaruukki steel, Finland ca 4 Mtpa 30 sources > 1 Mtpa fossil based CO2 18 sources > 1 Mtpa biogenic CO2

13 Specific cost ship vs pipeline Overall conclusion: Ship is the least costly individual transport option for 45 out of 55 sources located along the coast and having emissions of at least 0.5 Mtpa combined capture potential for the 45 sources: Up to 49 Mtpa (as of today)

14 Specific cost ship vs pipeline Chalmers University of Technology Pipeline break volume and associated cost for the 13 largest sources located along the coast (red circles), Spine only, overall conclusion; Difficult to envision systems with sufficient volumes so that pipeline becomes least costly transport option

15 Potential pipeline system Oxelösund Cluster (Observe: Complete systems including CO2 collection systems and distribution at the storage site) Spine only break volume: 4 Mtpa (see slide 14) Specific system cost ranging from 12.5 to 19.0 per ton depending on volume and reservoir injectivity Dalder/ Faludden Spine: Bulk pipeline from CO2-hub to injection site only

16 Potential pipeline system Skagerrak Cluster Cost declines rapidly as volume increases Observe: Collection & Distribution NOT included

17 Skagerrak cluster (Observe: Collection and distribution NOT included) Preem Lysekil, cost by volume pipe vs ship to Gassum Chalmers University of Technology Preem Lysekil: Up to 5 Mtpa within 150 km radius Norcem Brevik: At 2 Mtpa cost declines to 11/ton to Gassum Amager Köbenhamn: Up to 8 Mtpa reducing transport cost to Gassum to 7/ton All KASK sources from NW Jutland hub to Utsira: 10 Mtpa - 6.7/ton 15 Mtpa - 5.5/ton

18 Main conclusions for transport of CO2 in the Nordic region The larger the transported volume the longer is the distance required for ship transport to become the most cost efficient transport solution Based on volume and distance it can be concluded that ship transport is the most cost efficient individual transport solution for 45 out of the 55 largest sources in the Nordic region. Ship transport is the recommended transport mode for most (but not all) of the potential clusters in the region particularly during a ramp-up phase due to the extra cost and risk taking in connection with underutilized pipelines. An obvious but important conclusion is that best/closest storage sites will be utilised first first mover advantage. Geographical distribution of capture plants over time along with reservoir storage capacity and injectivity as well as willingness to take risk decisive for how CO2 transport systems evolve.

19 Västra Götaland and Halland aiming for zero GHG emissions 2050 Transport and Industry? Taken from recently completed EU Interreg project

20 VGR GHG and CO2-emissions by sector Production based!

21 Fuel switch to biomass and electricity in transport sector? Profus Roadmap 2011 zero emissions 2050 Potential biomass requirement Biomass requirement: Case A: Production of electricity and heat only Case B: Case A + full replacement of current fossil feedstock to the 3 refineries + Borealis assuming all markets evolve as in Profus Roadmap

22 The refineries have 4 options (for zero emissions without use of flexible mechanisms) Continued use of fossil feedstock, but this will require CCS to eliminate process related emissions. If the fossil fuels are used within the Swedish transport sector it will also require BECCS to neutralize the transport sector s emissions. However, the fossil fuels can also be exported, for instance to take additional market shares on the international market with export of low sulphur diesel fuels. Transformation to bio-refinery at current activity levels, but this will require substantial volumes of biomass some 120 TWh assuming significant vehicle efficiency gains and a 62% share of biofuels in Europe s transport sector. Total biomass use for energy in Sweden is currently around 130 TWh. Transformation to bio-refinery and significantly reduced activity level. Combinations of the options above

23 Conclusions CCS CCS vital for carbon neutral Nordic and Swedish industry Good prospects for CCS on the Swedish west coast with Cluster potential Close to promising storage sites Estimated CCS system cost ranging from per ton CO2