AMEC Preset at Ion on CCS

8/8/2019 AMEC Preset at Ion on CCS

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Carbon Capture and StoragePresented by Alastair Rennie

The Energy Institute lectures

Energy Institute - London, 13th May 2009

AMEC 2009


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Contents

AMEC perspective

Climate Change and CCS CCS systems

Outlook for CCS projects


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Contents

AMEC perspective

Climate Change and CCS CCS systems



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AMEC at a glance

We have annual revenues of over 2.6 billion in 2008

We employ 22,000 employees in over 30 countries

Our shares are traded on the London Stock Exchange where we are listed in the Oil

Equipment and Services sector

We are a member of the FTSE* 100

AMEC is listed as one of the worlds top five companies in both the Dow JonesSustainability Indexes (DJSI) World and European STOXX Index for 2008/09 in the oilequipment and services (OIE) sector.

AMEC is an engineering company doing transportation, flood and dehydration systems,pipeline design services, EOR Conceptual Design Services, PM and EngineeringServices for capture processes, new and existing pipelines and storage sites.

Services focused on designing, managing the delivery of, andmaintaining strategic and complex assets

www.amec.com

*Financial Times Stock Exchange listing


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Contents

AMEC perspective

Climate Change and CCS

CCS systems



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Why do we need Carbon Capture andStorage (CCS)?

1. Climate change is a real problem - for us and future generations

9th March 2009 The Independentreports that research from the

Met Office's Hadley Centre for Climate Prediction and Researchwarns that the best efforts to combat climate change are likelyto offer no more than a 50-50 chance of keeping temperature

rises below dangerous levels


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Man made impact on global CO2

From a presentation 26th February 2009, Platts conference Brussels by Lord Ronald Oxburgh, Past Chairman, ShellTransport and Trading. President of the Carbon Capture and Storage Association


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2. More energy is need to improve the lives of billions of people


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From a presentation26th February 2009,Platts conferenceBrussels by LordRonald Oxburgh,Past Chairman,Shell Transport andTrading. President of

the Carbon Captureand StorageAssociation


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3. Energy efficiency is not enough by itself, we need renewable andsustainable energy that does not add to the climate change problem

4. The main future emitters of CO2 have cheap fossil fuel in the form of

coal which they will use because of security of supply and flexibility5. Without the bridge of CCS we will not reach a future of global low

CO2 emissions


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Source: IEA World Energy Outlook 2008. Blue is the continuation of the 450ppm scenario


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3. Energy efficiency is not enough by itself, we need renewable andsustainable energy that does not add to the climate change problem

4. The main future emitters of CO2 have cheap fossil fuel in the form of

coal which they will use because of security of supply and flexibility5. Without the bridge of CCS we will not reach a future of global low

CO2 emissions


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Factors against implement CCS

Key issue is that it is an additional cost in fuel use;

Requires valuing an externality The primary products related to CCS useful energy such as heat and

electricity are embedded into products and services.

CCS implementations at scale have technical and cost risks

Additional infrastructure impacts for planning and public acceptance

Uncertainty of CO2 value recognition causes financial risk costs

Low cost transport and storage needs high volumes

It is not yet normal business


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Factors helping implement CCS

It converts coal from a problem to an opportunity

Coal is internationally more evenly distributed and matched to

energy users

Good potential for re-use of existing power assets

Swing production of CO2 will offset intermittent renewable

generation Low risk storage in depleted gas reservoirs and very large saline

formation storage opportunities

Governments have accepted that they are best placed to carry longterm liabilities for storage.

Large scale and few players make it easier to view the market andsecure climate change improvements such as shared infrastructure

with clustering of sources


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Delay is bad

Indeed, every year that CCS is delayed is a missed opportunity to reduce CO2emissions. CO2 concentrations are already rising at over 2 ppm a year and it is

estimated that delaying the implementation of CCS by just 6 years would mean CO2

concentrations increasing by around 10 ppm by 2020 (Exhibit 2, European Technology Platformfor Zero Emission Fossil Fuel Power Plants (ZEP) Demonstration Programme Proposal, Nov 2008).


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CO2 is an integration issue, not a yearlyevent there is no time discount to CO2

Tonnes in a

year, thecommercialview ofemitting CO2

Impact ofemissions

Earths view ofemitting CO2

Sustainablelevel of CO2

Now +50 years- morethan CCS asset life


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Contents

AMEC perspective


CCS systems



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Sources and sinks for CO2

key criteria- indicative areas:Prospective largersaline aquifer basins

(Adapted from SPM6b IPCC(Courtesy ofGeoscience Australia)

Oil and Gas sinks

Large CO2 sources(Adapted from Hydrogen Energyindicative map)


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CCS commercial demarcations

Common network resourcesEach CO2source

Licensed storage

Injection,monitoring

Pumping,pipes, meters

Node

Capture Dry etc to export Pipeline equipment

ShippedCO2

Primarybusinessprocess

Sequestered

Revenueand liabilitiesfrom CCS-stored or

EOR

Commitmentto CCS

Shared portfacilities,

export storageand shipping

Source may be commerciallylinked to store or may be able

to transfer all liabilities andpayment to another system

ShipAMEC 2008


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Capture

Capture technology and

characteristics are driven by site

and plant process details. The CO2

output for high volumes is quitesimilar in all cases due to multiple

downstream considerations

The main processes, post

combustion, oxy fuel and precombustion, are well understood

overall and in most details. R&D

may offer important efficiency

improvements but are not essential

to move forward with CCS.

The main immediate issue is in

proving costs at large power station

scales.


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Transport

Bulk transport has solid, liquid or gaseous options. Solid however require energy to cool the CO2, insulation during transport, or

hydrate formation, and liquefaction for geological injection, so the use of the

solid phase is generally discounted. Transport as a gas is good for short

distances and smaller volumes. For ambient temperatures liquid CO2 at medium to high pressures is ideal and

proven in North America in both volume and distance.

Besides simple dedicated lines network studies in the UK and US show viable

systems once volumes are established.

Shipping has specificoptions of ambient

temperature and highpressure, or lowtemperature and mediumpressure.

AMEC 2008

Copyright AMEC 2008


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Storage

Carbonation is useful for smaller

quantities in the right

circumstances.

Ocean water storage is ruled outas it is not secure storage without

significant environmental risks

Storage in geological formations

requires a seal or cap rockgenerally at depths greater than

say 800m.

The storing formation, coal, oil&

gas bearing rock, or salineaquifer, all require sufficient

injectivity

Various mechanisms will

gradually immobilise the CO2.

IPCC CCS Figure SPM.4. Overview of geological storage options (based on Figure 5.3)(Courtesy CO2CRC)


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Carbon, Capture, Transport and Storage


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And Yorkshire,

AMEC work done for a Yorkshire Forward led study, 2008 for up to 60mt/year

Th id f CO I f t t f th


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The idea of CO2 Infrastructure for theNorth Sea has also been raised

From 2002 example;CENS (CO2 for

EOR in the NorthSea) Elsam andKinder Morgan CO2Company 30mt/year.

To 2007 Report tothe North Sea BasinTask Force.Examined phasingand clusteringbenefits in scenariomodelling of CCS.


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Contents

AMEC perspective


CCS systems



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Developing a market value for CO2 reductions

Regulation is a way to force a commercial value. How that works

internationally is more complex;

Plan the ability to trade CO2 between markets from 2020?

Designing the next generation CDM mechanism to include CCS

Do sector agreements for power, industry and transport help??

Identifying and promoting new efficiency codes for buildings, appliances andequipment

Identifying the embedded CO2 equivalent of the green house gases in goods

and services use of conservative default values unless proven

The UNFCC Copenhagen meeting will be an important in these steps - but

expectations for the outcome are varied

Alternatives to open markets for CO


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Alternatives to open markets for CO2reduction

There is a view that volatility and political trade-offs will soften marketvalues for CO2 so that the money will not be efficiently directed to CO2

reduction projects, so: Should CCS be even linked to markets like ETS or CDMs, or should it

be just a requirement of using fossil fuels or mandated for heat andpower?

Should there be tax at source on fossil fuels at source (and importedembedded carbon) to pay for the consequences of digging up theburied carbon?


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What is next for CCS?

Institutional processes are developing

US and Canada may catch up and exceed EU in deployment

China is capable of quickly tackling this and their potential support for

CO2 caps is encouraging

EU political will is gradually turning into practical support beyond theinitial R&D interests- EC proposal for 1100m for CCS before 2011,

the 300m EUAs recycled to projects, and member state support

options.

The April commitment by the UK to 2 to 4 plants, a route to mandating

CCS for coal, and potentially realistic funding is important


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Overall Issues

Uncertain impact of global market value of CO2 Denser population where systems to be deployed

Considerable regulatory development is needed in most countries

Different regulatory principles

Cross boundary issues to be addressed

Cost comparisons are confused by existing energy supportmechanisms

Value from all CCS has to be recognised e.g. biomass

The approach to monitoring the reservoir and any remediation

measures before storage will be done. Early systems face higher costs and may become stranded assets- so

capex and opex support is needed to gain learning and share the risks


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Project Issues

Required to ensure public safety and that public perception isproperly informed

Conservative design will deliver plant

Safety is well addressed

Robust storage site

Monitoring methodologies for the storage site and other infrastructure

Operation and modelling of storage with response planning

Measures that may be necessary after the end of the crediting periodmay have to be agreed before storage starts


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Thank You

Alastair Rennie

AMEC Power and Process EuropeRenewables Project Director

T: +44 7889 486 827

e: [email protected]

AMEC HouseYarm Road

Darlington

Co. Durham

DL1 4JN - UK

www.amec.com
mailto:[email protected]://www.amec.com/http://www.amec.com/mailto:[email protected]

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AMEC Preset at Ion on CCS