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Caledonia Clean Energy Project
Feasibility Study Findings
#newclimateforCCS
Stephen KerrProject Director
Caledonia Clean Energy Project is a Key UK CCS Infrastructure Investment
• Completed extensive Feasibility Study over 2 yearslargely Scottish / UK Government funding
• Natural Gas with CO2 capture clean power project• Options from 500MWe to 1300MWe• Reliable and flexible clean power
• Study undertaken with industry leading supply chain partners
• CO2 transportation and storage solution developable at lowest cost and risk in UK
• Deliverable in 2025 with CfD at competitive priceless than energy from offshore wind on a comparable basis
Key Findings
CCEP Meets Energy System Challenges
• A natural gas-fired plant with flexible output and CO2 capture, to integrate with renewablesRamp rates up to 88 MW / minute with carbon capture. Minimal impact in 50%-100% op. range
• CCEP as “anchor tenant” for infrastructure improves CCS industrial cluster economics by at least 100%
• Suitable pipeline infrastructure to reach CO2 storage capacity already exists (p.s. saves money)
CCEP is Technically and Financially Feasible
• Technical feasibility: Power plant & CO2 capture system are proven technologies with commercial warranties
Opportunity to add innovative technology later with shared infrastructure at lower cost
• Significantly Lower Initial Delivery Risk: existing pipelines & well defined storage improves financability
CCEP Can Be Financially Attractive for Government, Consumers and Investors
• CCEP can be built and financed with reasonable returns at an attractive power price
• CCEP is dispatchable and provides firm energy while also supporting changing grid conditions through flexible operation
CCEP’s Other Socio-Economic Benefits
• Major contribution to UK and Scottish economies through local content, Gross Value Added, short-term and long-term jobs
Range of Analysis
• Summit Power Caledonia Clean Energy Project (CCEP or the Project) could export up to 1,385 MW of low-carbon electrical power to the electrical grid and, depending on the configuration, could economically capture 3.1 million tonnes of carbon dioxide per annum for undersea storage, and enhanced oil recovery applications.
• Fourteen economic scenarios are presented, built on the different technical configurations of power generation, CO2 capture, CO2 transportation and storage and results in a comprehensive set of combinations based on the different technical configurations. It is recommended that two configurations are further advanced to maintain option value.
• The findings confirm that CCEP represents an economically and technical viable project. CCEP demonstrates scenarios that can be delivered in the £80 to £90/MWhr Strike Price range (2012 prices) with key changes in commercial approach to make the Project investable.
• Other technical and commercial opportunities remain to further reduce the Strike Price.
Key Commercial Changes
• Four key policy / commercial changes could reduce Strike Prices by as much as £60 - £80/MWhr from the prior CCS Competition levels
• Socialised development and regulated charging model for CO2 Transportation & storage, reducing cost and risk up to [£35/MWhr lower]
• Provide appropriate Contract for Difference (CfD) contract terms and tenor (at least 20 years) to underpin investment up to [£24/MWhr lower]*
• Optimise flexible dispatch/capacity factor of plant up to [£15/MWhr lower]*
• Reduce commercial risk arising from definition of clean electricity generation and cost of residual carbon emissions up to [£6/MWhr lower]
* Dependant on approach to valuation of capacity, flexibility and ancillary services
New CfD Approach for Power CCS
Match revenue structure to the value of flexible low carbon dispatchable power
Capacity
Balancing ServicesEnergy
20 year CfD Term
Revenue
Stri
ke P
rice
£8
0 -
£9
0 M
Wh
r
AB
C
£2
5£
4
£
56
Contracting long term low carbon power capacity will reduce the price for other short term auctions (you cannot run a
capacity auction unless you have excess capacity)
Some balancing services should be contracted on a long term low carbon basis
“Energy” component price can be benchmarked to alternatives
Rates of return can be regulated
Sherlock talks
scarcity pricing,
volatility, climate:
Dr Watson
prescribes CCS
Sherlock Looking Concerned
Scenario 1a - 2x1 Siemens 8000H
Scenario 1b - 2x1 Siemens 4000F
Scenario 1d - 2x1 Siemens 2000E with SF
Scenario 1e - 2x1 GE 9HA.02
Scenario 1g - 2x1 GE 9F.04
Scenario 1h - 1x1 Mitsuibishi M701F5
Scenario 3a - 3 SMR trains w/ H2-fired Siemens 8000H
Scenario 3b - 3 SMR trains w/ Siemens 8000H
and PCC
Scenario 5b - NetPower (600MW)Scenario 5a - NetPower (300MW)
Scenario 4a - CapSol StarGate 250 (1 module)
Scenario 4b - CapSol StarGate 250 (4
modules)
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
- 200 400 600 800 1,000 1,200 1,400 1,600
Full
Load
Aba
ted
Emis
sion
s CO
2 g
/ KW
hr
Export Generation MW
Unabated Gas CCGT Typical Emissions Range
NGCC with PCC Emissions Range
NetPower Allam Cycle Emissions Range
Emissions Range
Real world operating conditions
40 – 80 g/kwhr
Cluster Economics – Illustration of Impact on T&S Business Case
5 MPTA Capacity T&S system: Capex £600M : Opex £25M pa: Unrisked / Undiscounted
• Industry & Power Cluster: Industry ramp to 2MTPA (10yr contract): Power 3MTPA year 1 (40 year)
Cost: £11 / tonne Contracted Utilisation: 71% Full Recovery Price: £16 / tonne
• Power Only: Power 3MTPA year 1 (40 year)
Cost: £13 / tonne Contracted Utilisation: 60% Full Recovery Price: £22 / tonne
• Industry Only: Industry ramp to 5MTPA (each source 10yr contract)
Cost: £16 / tonne Contracted Utilisation: 50% Full Recovery Price: £32 / tonne
• Industry Only: Industry ramp to 2MTPA (each source 10yr contract)
Cost: £71 / tonne Contracted Utilisation: 11% Full Recovery Price: £632 / tonne
40
tim
es2 t
imes
Next Steps
• The next phase of the Project requires funding of a Pre-FEED to further refine and focus activities in line with developing UK deployment plan
• Work closely with Governments to identify policy, fiscal support and commercial models
• Develop real world business case for UK CCUS clusters – initially industry and power - pulling through hydrogen and low carbon products and services
• Develop appropriate CfD for real projects• Implement Industry CCUS approach• Implement Transport & Storage approach• Business Case and funding of UK Clusters
Caledonia Clean Energy Project
Contact:Stephen [email protected] 797720
11 Rutland Square, Edinburgh