What next for CCS CCSA perspective

Transcription

1 What next for CCS CCSA perspective Judith Shapiro The Carbon Capture & Storage Association UKCCSC Early Career Winter School, Cambridge Thursday 12 th January 2012

2 Agenda The CCSA 2011 what happened 2012 what to expect CCSA Strategy Opportunities Key issues

3 What is the CCSA? It is: A Business Association formed in the UK to represent the interests of its members in promoting the business of geo-ccs wherever opportunities may exist, as well as assisting policy developments in the UK, EU and internationally towards a long-term regulatory framework for CCS, as a cost-effective means of abating CO2 emissions It is not: A technical forum, a professional institute or an environmental or climate campaign group.

4 Vertical slice of policy influence UK Europe International

5 CCSA Members (74) 2Co Energy Air Liquide Air Products Aker Clean Carbon Allen & Overy Alstom Power AMEC Anthony Veder Group Arup BG Group BOC BP Calix Camco International CCS TLM Chevron Clean Energy Group CMS Cameron McKenna CO2 Sense (Yorkshire) CO2Tech Centre Mongstad ConocoPhillips Costain DNV Doosan Power Drax Power Durham University EDF Energy EON ERM ESB Fluor Gassnova GDF Suez GE Energy Herbert Smith Howden Group Jacobs Engineering Linklaters Lloyd s Register Maersk Oil & Gas Masdar Mitsubishi Heavy Industries MMI Engineering N8 Nottingham Centre for CCS National Grid National Physical Laboratory Norton Rose Peel Energy Perenco Petrofac CO2DeepStore Poyry Progressive Energy PWC Rhead Group Rio Tinto RPS Sasol Schlumberger Scottish Carbon Capture & Storage Scottish Enterprise Scottish European Green Energy Centre ScottishPower Senergy SGS United Kingdom Shell Siemens Statoil Tata Steel Tees Valley Unlimited Total Vattenfall Wood Group Energy Zurich

6 2011 what happened A turbulent year: Demo 1 not proceeding Funding Delays But: Ferrybridge CC Pilot 100+ Demo 1 Feed studies Electricity Market Reform CCS in CDM

7 Electricity Market Reform Feed in Tariff Contract for Difference CCS on equal footing other low-carbon technologies World s first mechanism to incentivise CCS beyond demonstrations Transitional arrangements Carbon Price Floor 30/tCO2 (2020) 70/tCO2 (2030) Emissions Performance Standard Set at 450g CO2/kWh Capacity payments

8 2012 what to expect (1) Launch of Demo programme Aim: cost-competitive CCS in the 2020s (comparable to other low carbon technologies) Projects operational Flexible approach Consideration of part-projects and cluster (+ industrial) Contract signature within 6-9 months what s still on the table? 1bn reallocated EMR (FiT CfD) NER m CCS R&D Programme

9 2012 what to expect (2) CCS Roadmap Published Q1 2012

10 2012 what to expect (3) More clarity on EMR FiT CfD NER300 Selection process to conclude 2H CCS projects submitted in total (6 from UK) Challenges (NER300) Taking longer to implement than expected Uncertainty over level of support; EUA price & MS support Number of early projects delayed

11 CCSA Strategy Launched 8 th September 2011 Sets out CCS industry view on the ambition for CCS to reach 2030 decarbonisation of the power sector How to get from Demos to commercial roll-out of CCS in the 2020s Download from CCSA website:

12 CCSA Strategy - Ambition UK Climate Change targets: Reduce GHG emissions by at least 34% by 2020 Reduce GHG emissions by at least 80% by 2050 Committee on Climate Change (CCC) recommends decarbonised power sector by GW of low carbon electricity required by 2030 EMR noted 1/3 of electricity from renewables by Remaining 2/3 should be met by nuclear, CCS abated fossil fuels and some unabated fossil fuels. CCSA therefore believes GW CCS by 2030 is an appropriate ambition

13 CCS in operation (GW) Trajectory UK target 20 GW by UK Demos GW in 7 yrs

14 CCS in operation (GW) Trajectory Progressive Roll-Out UK target 20 GW by GW/yr Initial projects will enable networks to de-risk and lower costs of further projects 2-4 networks established by 2020 & Retrofits underway All Regional networks initiated by GW/yr Large scale storage in saline formations as well as depleted gas fields likely to be needed by GW in 7 yrs 1GW/yr First industrial CCS Demo before 2020 Many industrial CCS projects underway by

15 Costs of CCS Power Latest levelised COE data show CCS with gas or coal to be a competitive low carbon electricity option CCS Investment costs ( 1-2Bn/GW) are lower than nuclear ( 3Bn/GW) or offshore wind ( 7 Bn/GW) CCS is reliable and flexible, and able to complement nuclear and renewables CCS causes much less of an increase on Overall System costs (grid, interconnectors, back-up) than alternatives (+15% vs +40%) Source: Committee on Climate Change. CCC Calculations based on Mott MacDonald (2011) Costs of low carbon generation technologies

16 Costs of CCS - Industrial Source: DECC Clean Coal industrial Strategy based on IEA Technology Roadmap for CCS Industrial CCS costs between 20 and 100 USD/t There is rarely a renewable alternative Some of these costs are less than the ETS carbon price floor* so CCS may be a cheaper option than buying certificates *UK Carbon Price Floor will be 70 (113$ ) in 2030

17 Jobs (manyears) Opportunities 300,000 Total Jobs 250, ,000 Potentially more than 50,000 jobs in UK by 2035 UK plc business could be valued at more than 10Bn/yr by , ,000 Potentially more than 20,000 jobs in UK by , UK Possibly UK Non UK Source : IPA Scotland

18 Key Issues Infrastructure Right-sized infrastructure (transport and storage) Cluster/network solutions Power and industrial Industrial Increasing costs of climate change policies Few alternative options Maintaining UK competitiveness Storage Regulations Third Party Access, Marine Planning, Petroleum to CCS licence transition, Financial Security provisions

19 Contact Judith Shapiro Policy & Communications Manager The Carbon Capture & Storage Association Suites Grosvenor Gardens House 35/37 Grosvenor Gardens London, SW1W 0BS United Kingdom Tel: +44 (0) Mob: +44 (0) Website: