CCS in the UK and ETI Andrew Haslett FREng, Chief Engineer

CCS in the UK and ETI Andrew Haslett FREng, Chief Engineer 2014 Energy Technologies Institute LLP The information in this document is the property of Energy Technologies Institute LLP and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Energy Technologies Institute LLP. 2014 This information Energy is given Technologies in good faith based Institute upon the latest LLP information - Subject available to to notes Energy on Technologies page 1Institute LLP, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Energy Technologies Institute LLP or any of its subsidiary or associated companies. 1

UK Climate Change Legally binding targets and process 85% reduction for energy by 2050 (from 1990) Carbon budgets for each 5 years set by independent panel UK renewables target of 15% energy set by EU UK not heavily industrialised, so heating houses and transport are largest energy uses 2

What is the ETI? The Energy Technologies Institute (ETI) is a public-private partnership between global industries and UK Government Members Delivering... Targeted development, demonstration and de-risking of new technologies for affordable and secure energy Shared risk Leverage for Members - funding, expertise and market access Accelerated development schedules - in advance of market Programme Associate 3

What we do... System level strategic planning Technology development & demonstration Delivering knowledge & innovation 4

ETI Invests in projects at 3 levels Knowledge Building Projects typically... up to 5m, Up to 2 years Technology Development projects typically... 5-15m, 2-4 years TRL 3-5 Technology Demonstration projects Large projects delivered primarily by large companies, system integration focus typically... 15-30m+, 3-5 years TRL 5-6+ 5

ETI headlines 212m projects announced 53 projects across the portfolio 49m of projects focussed on knowledge building 122 partner organisations 15 countries - europe, north america, middle east, asia 1st programme associate - Hitachi 2 equity holdings supporting business developments 9 commercial product launches 100m Potential revenue from existing project portfolio 6

Bioenergy and CCS pivotal to delivering an affordable 2050 UK energy system Case Option Value bn/year in 2050 Option Value bn NPV to 2050 Option Value bn NPV to 2030 No UK biomass 78.4 297.8 60.7 No CCS 80.7 262.7 31.9 Limited vehicle efficiencies 12.4 97.5 36.0 No changes in heating 11.3 50.8 7.3 No nuclear 5.5 30.2 6.1 No imported biofuels 4.6 16.9 2.7 Bioenergy with CCS delivers negative emissions Bioenergy without CCS is still significant CCS without bioenergy is still significant All other technologies have 2050 option value of less than 15bn per year Charts and data from ESME v3.2 Director s Cut runs, August 2013 7

2050 Base 8

2050 No Nuclear 9

CCS by numbers 3 Possible phases of CCS development in the UK 13GW 1% Of CCS deployed by 2030 Of GDP saved per year by having CCS in the mix Achieving an affordable, secure, low carbon energy mix with renewable and nuclear energy alone will be much more difficult and much more expensive. Ed Davey, 24 Feb 2014 10

Phase 1 FEED+ 100m investment CCS Commercialisation Programme International Collaboration CCS Commercialisation Programme R&D and Innovation Underpinning phase 1 onwards: UK CCS Roadmap 2012 185m R&D Programme Intervention to address key barriers Electricity Market Reform 11

ETI CCS Programme Demonstration Development Knowledge Building UKSAP - 4M Storage Atlas Storage Economics Commercialisation MMV (Landscape) Mineralisation H2 storage CCS System Modelling Toolkit - 3M High H2-2M Turbine & Engine Safety NG Aquifer - 2M Nextgen1-23M Pre Comb. Coal (deferred) Nextgen 2-22M Gas Power MMV - 5M Marine monitoring 12

Strategic planning is key to CO 2 storage development in the UK Pipelines and platforms will dominate transport and storage costs East of England network development is key to reducing emissions and minimising transport & storage costs Infrastructure Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Timescale 2020-24 2025-29 2030-34 2035-39 2040-44 2045-49 Total Flow, Mte/a 15 40 80 110 110 110 Number of Hubs 2 4 5 6 6 6 Sinks in Use 2 5 10 14 14 16 Number of Wells 10 30 100 130 150 200 No of T/X pipelines 2 6 12 16 16 18 Similar (but smaller) networks envisaged in the East Irish Sea and Central North Sea 13

Conclusion Systems analysis shows how different technologies can combine to deliver a successful UK energy system out to 2050 Cost effective central, distributed and local energy storage important Consumer behaviour, market rules, implementation of Smart ICT and sound systems design important to costs and economics Bioenergy and CCS are both critical to affordability Both very flexible in their application to industry, transport, buildings and power Together they can provide a significant and cost-effective credit for negative emissions, more valuable than the energy content Secure CO2 storage is important in the UK and we have sufficient costeffective offshore capacity for at least 100 years UK is progressing CCS at different points in the R&DD chain 14

Energy Technologies Institute Holywell Building Holywell Park Loughborough LE11 3UZ For all general enquiries telephone the ETI on 01509 202020. For more information about the ETI visit www.eti.co.uk For the latest ETI news and announcements email info@eti.co.uk The ETI can also be followed on Twitter at twitter.com/the_eti 15

ETI Project Portfolio total 400m 9 Technology Programme areas Delivering... New knowledge Technology development Technology demonstration Reduced risk 16

Some ETI project delivery partners... Now over 100 organisations in 15 countries 17

ESME ETI s system design tool... integrating power, heat, transport and infrastructure providing national / regional system designs ESME example outputs 18

2050 UK system cost first appearances of major technologies, in order of increasing effective carbon price 2010 /Te CO2 500 450 400 350 300 250 200 150 100 50 > 300/Te or >$480/Te Energy storage and distribution Efficiency improvement Appliances, heating, buildings, vehicles, industry Nuclear 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% UK Energy System CO2 Reduction (including aviation and shipping) UK legal target (2050) CCS Marine Offshore Wind Light vehicles (fuel cell / electrification) 19

Potential implications for the UK... Abatement costs UK s challenging 2050 CO2 target appears affordable with intelligent national energy system design and investment in technology development Efficiency measures waste heat recovery, building insulation, and efficient vehicles make a contribution under all emission reduction scenarios ETI targeting through SSH ( 100m) and HDV ( 40m) projects Nuclear mature technology and appears economic under most emission reduction scenarios - primarily an issue of deployment (planning / licensing, supply-chain, finance etc) Cost impacts post-fukushima need clarification international approach needed Bioenergy major potential for negative emissions via CCS and might include a range of conversion routes H2, SNG, process heat ETI investing in science, logistics and value models SSH Smart Systems and Heat programme HDV Heavy Duty vehicle Efficiency programme Offshore Renewables the marginal power technology and an important hedging option ETI investing in next generation, low cost, deepwater platform and turbine technology demonstrations CCS a key technology lever given potential wide application in power, hydrogen and SNG (gas) production, and in industry sector ETI investing in separation, storage and system design for coal, gas and biomass Natural gas a key 2050 destination fuel for power, space heating, industrial process heat and potentially for heavy duty vehicle transport applications ETI addressing through SSH and HDV efficiency programmes Hydrogen potentially important energy vector providing system flexibility (CCS and storage) and light vehicle transport applications ETI determining energy system flexibility benefits of using H2 20

White Rose FEED contract signed 20 December 2013 World s largest Oxyfuel power plant Yorkshire / Humber CCS Trunkline 21

Peterhead FEED contract signed 24 February 2014 World s first commercial scale gas CCS project Reuse of existing North Sea infrastructure Wider opportunities beyond project itself 22

DECC Response to Task Force, Oct 2013 Phase 2 Projects without capital funding from Government; support through CfDs Development Forum March 2014 Working to strengthen the business case - FIDe process - Learning from global projects - EOR / Wood Review - Industrial CCS (Tees Valley 1m) - Shared infrastructure 23

CO2Stored and CO2Nomica To provide insights on storage and its costs. ETI completed UKSAP atlas at the end of 2011 - sufficient storage for UK needs - widely dispersed storage - aquifers, particularly in SNS are attractive - ETI invests in NG appraisal 2012 CO2Nomica, an ETI model used to evaluate networks where is the best place to start? how much infrastructure? what are main cost drivers? when/where do clusters help? DECC, E.ON trained in CO2Nomica, BP to follow 24

Estimate made of scope and costs of offshore infrastructure 25

Costs reduce significantly after the first five years /te CO2 Infrastructure in phase Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Start Year 2020 2025 2030 2035 2040 2045 Total Flow, Mte/a 15 40 80 110 110 110 Number of Hubs 2 4 5 6 6 6 Sinks in use 2 5 10 14 14 16 Number of Wells (smoothed) 15 30 100 130 150 200 No of transmission pipelines 2 6 12 16 16 18 26

Storage scheme is promising as a load follower Cost of IGCC+CCS vs CCGT+CCS 260 210 LCOE /MWh 160 110 60 0 10 20 30 40 50 60 70 80 90 100 110 Load Factor % CCGT Low (1.9p/kWh) CCGT High (3.5p/kWh) CCGT Medium (2.5p/kWh) Coal IGCC (0.93p/kWh) 27

CCS Next Gen Capture 2 (Gas) prototype test rig Test rig using Carbon Monolith technology Retrofit Technology for existing power plants 28

CCS Storage site development 2m investment from ETI kick-starting National Grid programme to appraise southern North sea aquifer ETI supporting National Grid programme to appraise southern North sea aquifer Storage development and qualification is the longest lead time item in the CCS chain and the greatest uncertainty Post test evaluations proceeding 29

CCS Hydrogen for Power Production To identify the safe limits of H2 use in fuels Hydrogen plays key role in ESME scenarios Flexible power production through H 2 production, intermediate storage and use in turbines. This project examines limits on safe use of H2 in GTs and Gas Engines. High H2 Project - 0.6m circular duct under test (Phase1) Stage Gate in May 2014 reviewing if results warrant scale-up to HRSG configuration. 30

Building investor confidence - CCS Financing CCS In partnership with Ecofin Foundation Working with banks, insurers, developers, IEA, EIB and GIB to build common understanding of strategies to enable private sector financing of CCS Commercial development Contributed to the DECC Cost Reduction Task Force (CRTF) Leading the UK CCS Commercial Development Group (with Ecofin) to follow up on CRTF recommendations and actions Supporting the UK CCS storage Group developing national strategy 31

1MW marine tidal turbine Delivery led by Rolls-Royce (UK), operational phase led by Alstom (UK) part of a 12.5m contract from ETI Operational from early 2013 at European Marine Energy Centre (Scotland) 32

WaveDyn wave energy modeller now available as commercial product from GL Garrad Hassan part of a 8m contract from ETI Marine energy array performance modelling toolset commercially available from late 2012 Developed by GL Garrad Hassan as part of ETI PERAWAT project Models validated through tank testing and openwater tests carried out as part of the project in UK, Ireland, Netherlands and France 33

SMARTide Simulated Marine Array Resource Testing now available as commercial product from HR Wallingford part of a 0.5m contract from ETI Simulated Marine Array Resource Model Commercially available Developed by HR Wallingford as part of ETI Tidal Resource Modelling project 34

11 KV Wet-Mate underwater connector now available as commercial product from MacArtney (Denmark) 1.4m contract from ETI completed early 2012 35

Offshore Wind The marginal power technology and an important hedging option cost reduction is critical DECC cost reduction task force has identified routes to achieving 100/MWh by 2020 Contract and project structures Financing and risk management Technology innovation ETI has already invested 40m in technology development projects to target further cost reductions ETI has launched 30m of new projects to develop next generation, low cost, deepwater floating platform and very long blade turbine technology ETI Targeting ~ 90/MWh post 2020 through applying these technologies in high wind speed areas off UK west coast ( 100/MWh = 10p/KWh, 90/MWh = 9p/KWh) 36

Wind Turbine drive train test rig 15MW rig in supply from GE Power Systems (UK) and MTS (USA) 25m contract from ETI Commercial test unit being built at UK National Renewable Energy Centre 37

Wind Turbine drive train test rig 15MW rig in supply from GE Power Systems (UK) and MTS (USA) 25m contract from ETI Commercial test unit being built at UK National Renewable Energy Centre 38

Floating Wind Turbine Platform Design of an offshore floating platform able to extract energy in higher availability and strength areas in deeper water Wave Tank testing complete and no issues identified with the model. 39

Very long blade Next generation high performance wind turbine blade development 15.5m contract from ETI with Blade Dynamics In development for test from 2015 UK / US based entrepreneurial development team small business Technology and business development support from ETI - project financing, equity investment Only 49 meters 40

Fault Current Limiter In supply from GridON with site test by UK Power Networks 4m contract from ETI Installation work complete and now on the network and energised 41

Electricity storage Substation scale electricity storage as heat 15.5m contract from ETI with Isentropic and Western Power Distribution In development for UK substation test in 2015 UK based entrepreneurial development team small business Technology and business development support from ETI - project financing, equity investment 42

Efficiency All future emission reduction scenarios utilise efficiency improvements Waste heat recovery Building insulation Efficient vehicles Energy systems management ETI targeting through system demonstration and technology development projects Smart systems 95m+ Marine and Land Heavy Duty Vehicle efficiency 30m+ Plus, ongoing ETI projects in building refurbishment, energy management systems and energy storage 43

High Efficiency SCR In supply from Caterpillar, Johnson Matthey, Loughborough University 4.5m contract from ETI Visualisation rig operational Q3 2013 at Loughborough (UK) Test cell and vehicle demo in 2016 (Caterpillar, Peterlee, UK) Image courtesy of LaVisionUK Ltd CAD image of the proposed laser spray visualisation rigs (2 separate stations) 44

Bioenergy Value Chain Modelling (VCM) Project Energy Crop Production Aggregation and Pre-processing Conversion (and CCS) Distribution and transfer Spatial, decadal model for UK out to 2050 Optimise value chain based on total value (or max energy, min cost, min GHG emissions) Test system sensitivities to: Technology cost and performance Resource availability including imports Build out rates / planting rates 45

Ecosystem Land Use Modelling Project (ELUM) Aim: to develop a spatial model of the UK, which can be used to assess the impact of Direct Land Use Change (DLUC) to biomass production Unique measured and modelled approach Extensive field trials in the UK looking at soil carbon and greenhouse gas emissions 4 million over 3 years Outcome: identify the sustainable DLUC transitions, quantify how much biomass can be produced sustainably, and where it should be produced 46

Fieldwork underpins process modelling Soil C stock to 1 m (170 land uses) Soil GHG emissions (12 land uses) (CO 2, CH 4, N 2 O) Eddy Covariance (9 land uses) Whole system CO 2 exchange Soil GHG emissions potentials (CO 2, CH 4, N 2 O) (70 land uses) 13 CO 2 isotope tracers (2 experiments on 4 land uses) 47

Assessing the UK biomass potential Theoretical agricultural land availability Economic margins (MPR) Land use Constraints (VCM) DLUC emissions (ELUM) + Potential yields (VCM) The outputs from several ETI projects will be combined, in order to refine estimates of the availability of suitable land for biomass feedstock production Further work will be undertaken to validate input assumptions in a sample of locations across the UK Validation of theoretical assumptions Refined prediction of UK biomass production potential This combined assessment will enable us to: a. review logistics and process siting implications b. report on the UK bioenergy potential and pathway options out to 2050 48

Gas Likely to replace heavier fossils in hard to electrify and backup applications Fossil gas likely to remain cost effective and widely available - availability and pricing of US shale gas is driving take-up by some transport operators Low CO 2 emissions vs heavier liquid fossil fuels is potentially beneficial Energy density supports long-distance vehicle applications Methane slip impact is still uncertain Hydrogen from fossil fuels could become an increasingly important energy vector Creates system flexibility (with CCS and storage) Light vehicle transport applications ETI investing in enhanced control and safety systems for powerplants using hydrogen rich fuels 49