© Vattenfall AB

CO2 free Power Plant Project in VattenfallRelations to the Dynamis project

Lars StrömbergVattenfall AB

Group function StrategiesBerlin / Stockholm

Large CCS Projects meetingBrussels, September 5, 2006

© Vattenfall AB 2

The Power Sector

• The power sector is the major single emitter of CO2. Vattenfall is one of the major Energy companies in Europe

• The Power industry must take responsibility and take the lead for introducing CO2 free technology.

• To be able to make the deep cuts necessary, CCS is necessary.

• Primary target is to make technology available in 2020 at an avoidance cost of 20 EUR/ton of CO2, but also to start development of second generation technology

© Vattenfall AB 3

The CO2 free Power Plant project

CO2 free power plant

© Vattenfall AB 4

Roadmap to realization

Conceptual investigations

• TheoreticalResearch

Laboratory Test

• Research• Basic

principles• Combustion

characteristics

PilotPlant

• Demonstration of the process chain

• Interaction of components

• Validation of basic principles and scale-up criteria

• Long term charac-teristics

• Non-commercial

Demo-Plant

• Verification and optimization of the component choice, the process and reduction of risks

• Commercially viable incl. subsidies

Commercial Plant

• Competitive in the market at that time

• No subsidies

2006 2015 2020

© Vattenfall AB 5

The demonstration project time line

Pre-feasibility study Feasibility study

6 scenarios 1(3) Scenarios

Engineering

OrderInvestment decision

06/2006

03/2007

12/2008

06/2011

06/2012

01/2011

Pre engineerng

Permit application submitted

Early consultations

Tenders sent out

Bidding phase

06/2010

Construction

Pipeline permit

application

Storage site development

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Storage and transport

CO2 free power plant

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Storage Capacity, saline aquifers

There exists more

storage capacity

within Eorope (and

in the world) than

the remaining fossil

fuels

Source:

Franz May,

Peter Gerling,

Paul Krull

Bundesanstalt für Geowissenschaften und Rohstoffe, Hannover

© Vattenfall AB 8

CO2 Transport and storage Schweinrich structure

h Two pipeline transport routes are possible

h Both routes can be designed to follow existing pipeline corridors >90%

h Structure can contain 1,4 billion ton of CO2, equivalent to about emissions from 6000 MW their whole lifetime

Berlin

© Vattenfall AB 9

The technology options

CO2 free power plant

© Vattenfall AB 10

Technology Platform

The European Technology Platform forZero Emission Fossil Fuel Power Plants (ZEP)

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Electricity generation cost for large power plants in operation by 2020 (ZEP WG1)

0

10

20

30

40

50

60

70

80

90

Hard coal Lignite Natural Gas

EUR

/MW

h

No capturePre-combustionPost-combustionOxyfuel

Note:Power generation cost without CO2 transport and storage cost

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Avoidance cost for large power plants in operation by 2020 (ZEP WG1)

0

20

40

60

80

100

Hard coal Lignite Natural Gas

EUR

/t C

O2

Pre-combustionPost-combustionOxyfuel

Note:CO2 Avoidance cost without transport and storage cost

Power plant andCCS technologyimprovementpotential

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• Assume the conditions for the economy calculations are as above.

– The investment is probably too low for a plant with co-generation of hydrogen.

– The hydrogen contains 10 –15 % non-condensable gases, but is rather clean

• Accept that the electricity generation cost lies at about 45 €/MWh if 7500 hours of operation is assumed.

• The electricity generation part of the plant has an efficiency of 57 %.

• This gives a hydrogen cost of about 28 €/MWh• Hydrogen cost of 30 €/MWh might be achievable at site,

comparing with natural gas at about 20 – 24 €/MWh for LNG

Cost for hydrogen in a CO2 free coal co-gen plant

Lars Strömberg 2003 07 05

Vattenfall AB

Corporate Strategies

© Vattenfall AB 14

Pilot Plant

CO2 free power plant

© Vattenfall AB 15

Preliminary Lay out

Boiler

ESP

ASUFlue gas cooler

Desulfurization

CO2condensation

CO2-Process Plant

Ash siloCoal silo

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Plant Status

• The pilot plant will comprise a full chain including boiler, gas cleaning, CO2processing and an air separation unit

• The CO2 will not be permanently stored initially. It will be released into atmosphere.

– It will produce liquid CO2 of very high quality (food grade) to a tank storage– It is prepared for later connection to a storage project

• The contracts for the main components are awarded and construction started in june 2006.

• The permitting process is running very smoothly. Permit is expected in October 2006

• The estimated cost of the plant itself is 67 mio € and a three year test program will have running costs of about 27 mio €. All costs covered by Vattenfall and industrialpartners. No public funding.

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Time Schedule

2009 2010 20112005 2006 2007 2008

Planning for tender procedure

Permit planning

Detailed engineering

Commissioning

Erection

OperationGround Breaking

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Schwarze Pumpe power plant

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Location of the pilot plant at Schwarze Pumpe Power station

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The Power Sector

© Vattenfall AB 21

Conclusions

Exchange of plants reduction of CO2

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• All three technologies are probably available at a commercial stage in 2020.

• At present the oxyfuel technology is the preferred option due to adaptability to present generation technology and best economy.

• Only pre combustion capture produces an intermediary product in the form of hydrogen.

• Other ways of production is by electrolysis, at a significantly higher cost, but already distributed.

• We do not believe that hydrogen in pure form will be an important energy carrier

• One 1000 MW power plant, matching the system variation produces enough methanol for about half a million cars.

Conclusions CO2 Capture and Storage project

Lars Strömberg 2003 07 05

Vattenfall AB

Corporate Strategies

© Vattenfall AB 23

• There are very few synergies to be seen between Vattenfall’s Pilot Plant and Dynamis.

• IGCC with pre combustion capture will be the preferred option if hydrogen is wanted by a market

• Technology choice is not yet made. Oxyfuel is preferred technology in Vattenfall at present for power production

• The pilot plant might contribute to the spread of knowledge about CCS and general issues concerning gas processing, permission process and storage

Lars Strömberg 2003 07 05

Vattenfall AB

Corporate Strategies

Relation Dynamis and Vatenfall’s Pilot plant

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Computer simulation of the new units in Hamburg (Moorburg) 2 x 865 MW hard coal

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Computer simulation of the new Boxberg R unit675 MW- lignite

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Back up

CO2 free power plant

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Maturity of Capture TechnologiesPost Combustion Capture

Overall Status Conce

ptuel Inve

stigati

ons and

Laborat

ory t

ests

Pilot P

lant

Demon

strati

on unitRea

dy for

Dep

loymen

t

Full process integration and optimization for power

Component StatusBoiler and power process

Extended desulphurization

DeNOx process

CO2 capture process

Capture process optimization incl. new solvents and scale-up

CO2 processing

© Vattenfall AB 28

Maturity of Capture TechnologiesPre Combustion Capture

Overall Status Conce

ptuel Inve

stigati

ons and

Laborat

ory t

ests

Pilot P

lant

Demon

strati

on unitRea

dy for

Dep

loymen

t

Full process integration and optimization for power

Component Status

Air separation unit

Coal Gasification

Natural gas reforming

Syngas processing

CO2 capture process

CO2 processing

High efficiency, low emission H2 Gas Turbine

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Maturity of Capture TechnologiesOxyfuel

Overall Status Conce

ptuel Inve

stigati

ons and

Laborat

ory t

ests

Pilot P

lant

Demon

strati

on unitRea

dy for

Dep

loymen

t

Full process integration and optimization for power

Component Status

Air separation unit

Combustion process and boiler

Water/steam cycle, particle removal

Desulphurization

Flue gas condensation

CO2 processing

2000-07-16

Lars Strömberg Vattenfall AB© Vattenfall AB 30

Cost and Potential of options to reduce CO2 emissionsPrincipal example

Cost for carbon dioxide avoidance

[EUR/ton CO2]

0

50

100

Potential[Percent]

0 20 40 60 80 100

Hydro

Solar

WindBiofuel El

CO2 Capture and Storage

Coal to gas

Oil to gas

New efficient coal

New Picture 2005 including recent knowledge

Savings

Biofuel Heat