The IEA CCS Roadmap UK Advanced Power Generation Technology Forum Workshop on Carbon Abatement Technologies - development and implementation of future UK strategy London, 16 March 2010 Brian Ricketts International Energy Agency Coal is an important part of global energy supply source: IEA databases 2 1
million tonnes Coal s role in primary energy supply and power generation, 2007 Global Primary Energy Supply, 2007 Global Electricity Generation, 2007 TPES coal s share World 12 029 Mtoe 26.5% OECD 5 433 Mtoe 20.9% USA 2 340 Mtoe 23.7% China 1 956 Mtoe 65.7% India 595 Mtoe 40.8% elec. gen. coal s share World 19 771 TWh 41.5% OECD 10 645 TWh 37.1% USA 4 323 TWh 49.0% China 3 279 TWh 81.0% India 803 TWh 68.4% sources: IEA Key World Energy Statistics 2009 and IEA databases 3 UK coal production 1750 to 2009 and German hard coal production 1900 to 2009 300 250 UK 200 150 100 50 Germany 0 1750 1800 1850 1900 1950 2000 2050 sources: Cleaner Coal in China, OECD/IEA 2009 and IEA databases 4 2
million tonnes China s coal production and use could rise enormously 5000 4500 4000 WEO2009 Reference Scenario for 2030 3500 3000 2500 2000 1500 China 1000 500 US UK Germany 0 1850 1875 1900 1925 1950 1975 2000 2025 2050 sources: Cleaner Coal in China, OECD/IEA 2009 and IEA World Energy Outlook 2009 5 The importance of coal in meeting recent growth in energy demand Increase in primary demand, 2000-07 1 000 900 800 700 600 4.8% % = average annual rate of growth 500 400 1.6% 2.6% 300 200 2.2% 100 0 Coal Oil Gas Renewables Nuclear Demand for coal has been growing faster than any other energy source and is projected to account for more than a third of incremental global energy demand to 2030. 0.8% 6 3
coal imports and (exports), million tonnes World coal production (to 2008) and CO 2 emissions from fossil fuel use (to 2007) million tonnes 7,000 6,000 5,000 4,000 3,000 2,000 1,000 GtCO2 30 25 20 15 10 5 global CO2 brown coal ROW hard coal China hard coal 0 1970 1980 1990 2000 0 sources: IEA Coal Information 2009 and IEA CO 2 Emission from Fossil Fuel Combustion 1971-2008 7 China became a net importer for the first time in 2009 Chinese coal imports & exports to 2009 120 100 80 60 IMPORTS 40 20 0 1970 1975 1980 1985 1990 1995 2000 2005-20 coking coal imports steam coal imports coking coal exports steam coal exports net hard coal trade -40-60 EXPORTS -80-100 sources: IEA Coal Information 2009 and IEA databases. 8 4
USD/tonne International steam coal prices have fallen from the peaks of mid-2008 250 200 150 OECD Steam Coal Import Cost McCloskey NW Europe CIF 100 50 0 Jan-80 Jan-82 Jan-84 Jan-86 Jan-88 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 source: IEA Energy Prices & Taxes and MCIS Ltd 9 Global financial crisis has not changed basic outlook for energy 100% Shares of incremental energy demand Reference Scenario, 2008-2030 80% 60% Other fuels 40% 20% 0% Non-OECD Coal OECD source: IEA World Energy Outlook 2008 World Energy Outlook 2009: full update of energy projections through to 2030 with impact of the financial & economic crisis & decline in energy prices. 10 5
Mtoe Gt Long term, there is no such thing as business-as-usual 42 Reference Scenario Share of abatement % 40 2020 2030 38 Efficiency 65 57 36 End-use 59 52 34 13.8 Gt Power plants 6 5 32 3.8 Gt Renewables 18 20 30 Biofuels 1 3 Nuclear 13 10 28 26 450 Scenario CCS 3 10 2007 2010 2015 2020 2025 2030 source: IEA World Energy Outlook 2009 - climate change excerpt Efficiency measures account for two-thirds of the 3.8 Gt of abatement in 2020, with renewables contributing close to one-fifth. 11 Coal will persist but lose share as energy system transforms 12 000 10 000 8 000 6 000 4 000 2 000 36% Fossil fuels 30% 24% 18% 12% 6% Zero-carbon fuels Share of zero- carbon fuels (right axis) 0 0% 1990 2000 2010 2020 2030 source: EA World Energy Outlook 2009 - climate change excerpt In the 450 Scenario, demand for fossil fuels peaks by 2020, and by 2030 zero-carbon fuels make up a third of the world's primary sources of energy demand. 12 6
Mtce World primary coal demand by scenario 7 000 6 000 Reference Scenario 450 Scenario 5 000 4 000 3 000 2 000 1 000 0 1990 2000 2010 2020 2030 In the 450 Scenario global coal demand plateaus by 2015 and declines progressively, returning to 2003 levels by 2030 - a level almost 50% lower than in the Reference Scenario 13 The ETP BLUE Map Scenario 7
The rationale for CCS Without new policies, global emissions increase by 130% by 2050, leading to a 4-7 o C temperature rise CCS provides one-fifth of the needed CO 2 reductions in 2050 Without CCS, cost of stabilization rises by 70% CCS is the only low-carbon solution for gas/coal, cement, and iron & steel sectors The roadmap process IEA is developing technology roadmaps for key low-carbon energy technologies Process begins by convening experts to establish the current technology baseline Assume a 50% reduction in energy-related CO 2 by 2050 Use BLUE Map scenario to map growth pathway Create technical, policy, legal, financial, and public acceptance milestones to achieve 2050 targets Identify priority near-term actions Create a process for enhanced collaboration Implement actions and track progress 8
CCS is operational today Weyburn Sleipner Snohvit In Salah Rangely Five large-scale integrated projects are successfully storing CO 2 with many more projects planned Over 70 integrated projects planned Image courtesy GCCSI 9
CCS financing today Australia: Aus$2bn; Aus$300 for GCCSI Canada: Can$1.3bn; Can$2bn from Alberta EU: 1.05bn from Economic Recovery Energy Programme and 300m allowances in the EU ETS Japan: JPY10.8bn Norway: ~US$40/tonne CO 2 tax on offshore oil and gas operations;nok1.2bn government investment UK: Additional costs for 1-4 CCS plants US: US$3.4bn from Economic Recovery Act CCS law and regulation today IPCC 2006 Inventory Guidelines London Protocol OSPAR Treaty EU CCS Directive EU ETS Directive National Legal & Regulatory Developments Australia US UNFCCC 10
Number of Projects MtCO 2 /year Captured CCS deployment in the BLUE Map Scenario There is an ambitious growth path for CCS from 2010 to 2050 A Global Challenge CCS will be required in all regions of the world in power, industry and upstream 11
MtCO 2 /year Captured An ambitious growth pathway OECD regions must lead in demonstrating CCS, but the technology must quickly spread to the rest of the world CCS is not just a clean coal Coal power only makes up around 40% of stored emissions in 2050 12
New build projects CCS in Power Generation Power plants must rapidly adopt CCS, with nearly all fossil-based power incorporating CCS by 2040 Demonstration to Commercial Expanded collaboration on CCS R&D and technology transfer will be critical 13
Billion US$ CCS retrofit and CCS ready plants Plants built today will still be operating in 40 years CCS ready prevents CO 2 lock-in Prevents technical barriers to future CCS retrofit Should include potential barriers to capture, transport and storage Around 60GW of power plant will need to be retrofitted with CCS by 2050 CCS ready is already mandated in UK for plants over 300MW CCS Costs and Investment Needs Additional Investment 2010 2050 (trillion USD) Capture 1.3 Transport 0.55 1 Total CO 2 Capture Investment Storage 0.09 0.65 Total 2.5 3 14
Abatement costs for deployed CO 2 capture Biomass (synfuels + H2) Gas (synfuels + H2) Gas processing Iron and steel Pulp and paper Chemicals Cement Gas (power) Coal (power) Biomass (power) 0 20 40 60 80 100 120 Cost of abatement (USD/tCO 2 avoided) Technology Actions and Milestones: CO 2 Capture All CO 2 capture technologies Commercially available with capture rates over 85% for all fuel types by 2025 All capture systems, all coals, all firing configurations to achieve 45%+ efficiency including CO 2 capture from 2030 Reduce capital costs by 10-12% by 2020 and an additional 10% by 2030 15
Technology Actions and Milestones: CO 2 Capture Post-combustion CO 2 Capture Commercial plant available (new and retrofit) for all fuels by 2025 Prove innovative CO 2 capture options (eg. Chemical looping) by 2030 Pre-combustion Demonstrate biomass IGCC with CCS by 2025 Reduce energy penalty to below 6% by 2030 Oxyfuel Commercial USC Oxyfuel plant operating by 2025 Technology Actions and Milestones: CO 2 Transport Analyze and incentivize optimized source and/or sink transport hubs Analyze and incentivize optimized country/region-wide pipeline network Conduct studies on tanker transport of CO 2 Improve understanding of CO 2 transport leakage scenarios and effects of impurities World CO 2 pipeline distance 16
Technology Actions and Milestones: CO 2 Storage Agree CO 2 storage capacity methodology by 2010 and assess global capacity by 2012 Review gaps in storage data coverage in emissions-intensive regions as a priority Implement publically funded, regional, exploration and evaluation programme to address gaps Develop best practice guidelines for site selection, operation risk assessment, safety, monitoring, remediation and closure by 2012 Develop and improve tools for predicting spatial reservoir and caprock properties between 2010 and 2020 Technology Actions and Milestones: CO 2 Storage Total theoretical storage capacity & total storage in 2050 Less than 1% of total theoretical storage capacity would be used by 2050 17
Financing Actions and Milestones The roadmap recommendations OECD governments increase funding for CCS to an annual average investment of USD 3.5 4 bn between 2010 and 2020 Provide an annual average investment of USD 1.5 2.5 bn between 2010 and 2020 in Non-OECD regions (Eg. By including CCS in the CDM) Establish incentives to accelerate commercial CCS deployment beyond the demonstration phase Legal and Regulatory Actions and Milestones 18
Conclusion: Near-term actions for stakeholders Energy/Resource Ministries Clarify CO 2 transport, storage property rights/access rights Establish regional storage exploration programmes, and policies to encourage commercial exploration Develop national CO 2 storage capacity estimates Expand human capacity in CO 2 storage site assessment Fund RD&D programmes on CCS technologies Ensure provision of regular, transparent data from early projects Establish CCS education/outreach programmes for the general public Conclusion: Near-term actions for stakeholders Industry Take more risk in funding near-term demonstration projects Develop international sector-specific CCS working groups to address CO 2 capture and CCS generally Share demonstration data more widely; transparent data will improve public confidence Ensure adequate public engagement in all CCS projects 19
The next ten years: a critical period for CCS Demonstration milestones Meet G8 goal of 20 project announcements by 2010 Achieve commercialisation with 100 projects by 2020 Financial milestones Provide USD42 bn for near-term demonstrations; also need to fund longer-term R&D Finance and plan CO 2 transport infrastructure Incentivise CCS via bonus allowances in cap-and-trade schemes, emissions performance standards or carbon taxes The next ten years: a critical period for CCS Legal/regulatory milestones Amend existing frameworks to regulate demonstration projects By 2015, all countries with CCS potential should have comprehensive frameworks Public engagement milestones Increase government expenditures in 2010-2012 Provide greater (and earlier) information on planned projects 20