34th exco meeting exco/34 exco folder.pdf34th exco meeting 14th-15th november 2008 washington d.c....

34th EXCO MEETING 14TH-15TH November 2008

Washington D.C. USA

This document has been prepared for the Executive Committee of the IEA GHG Programme. It is not a publication of the Operating Agent, International Energy Agency or its Secretariat.

Contents Page Adoption of agenda………………………………………………………………………………………………………… Motion on procedure at the meeting………………………………………………………………………………

1 3

Election of Vice Chair……………………………………………………………………………………………………… 5 Minutes of 33rd meeting…………………………………………………………………………………………………. Corrections to minutes……………………………………………………………………………………………………

7 23

Matters arising from the 33rd meeting ‐ list of actions and status…………………………………… 25 Operating Agent’s Report………………………………………………………………………………………………. 27 Progress Report……………………………………………………………………………………………………………… 29 Finances Members accounts……………………………………………………………………………………………….. Budget and Contributions 2008…………………………………………………………………………….. Finance Issues………………………………………………………………………………………………………..

41 53 57

Completed Activities What have we learnt? Progress to date………………………………………………………………… 59 Analogues for CCS………………………………………………………………………………………………… 63

CCS and CDM………………………………………………………………………………………………………… 65 Fuel cells for combined heat and power……………………………………………………………….. 67 CO2 pipeline transmission costs…………………………………………………………………………….. 79 Novel approaches to improve the performance of CO2 capture…………………………….. 83 CO2 Purity – Technical review………………………………………………………………………………… 91 CO2 capture in the cement industry………………………………………………………………………. 95 Operational flexibility of power plants with CCS……………………………………………………. 107 Assessment of sub‐sea ecosystem impacts……………………………………………………………. 109 Aquifer storage potential………………………………………………………………………………………. 121 Studies in progress and Study Prioritisation…………………………………………………………………… 137 Incorporating technical improvements in CO2 capture…………………………………………… 141 Water Usage………………………………………………………………………………………………………….. 143 Injectivity improvements……………………………………………………………………………………….. 145 Quantification of leakage………………………………………………………………………………………. 147 Studies to be reconsidered for future voting rounds/Members Ideas for Future Studies.. 149 Network Meeting Feedback To include: Finance meeting, Joint network meeting, Environmental Impacts meeting…..

151

Proposal for new network on Chemical Looping capture………………………………………………… 155 2008 Summer School……………………………………………………………………………………………………… 157 IEA GHG interactions with IEA Regulators Network………………………………………………………… 159 Date of Next Meeting……………………………………………………………………………………………………… 161 Any Other Business………………………………………………………………………………………………………… 163

GHG/08/29

IEA GREENHOUSE GAS R&D PROGRAMME 34th EXECUTIVE COMMITTEE MEETING

Washington D.C. USA, November 2008

ITEM

FIRST DAY (08.30hrs) Paper

1) Welcome, safety briefing, introduction of new members and observers

No paper

2) Adoption of agenda Motion on procedure at the meeting

GHG/08/29 GHG/08/30

3) Election of Vice Chair GHG/06/31 4) Minutes of 33rd meeting

Corrections to minutes GHG/08/32 GHG/08/33

5) Matters arising from the 33rd meeting - list of actions and status GHG/08/34 6) Operating Agent’s Report No Paper 7) Progress Report GHG/08/35

8) Finances – Members Accounts Finances – 2008 Budget Financial/budgetary issues

GHG/08/36 GHG/08/37 GHG/08/38

9) Feedback from Ad Hoc Strategy Group No Paper

10) Completed Activities

10.1) What have we learnt? Progress to date GHG/08/39

10.2) Analogues for CCS GHG/08/40

10.3) CCS and CDM GHG/08/41

10.4) Fuel cells for combined heat and power GHG/08/42

10.5) CO2 pipeline transmission costs GHG/08/43

10.6) Novel approaches to improve the performance of CO2 capture GHG/08/44

10.7) CO2 Purity – Technical review GHG/08/45

10.8) CO2 capture in the cement industry GHG/08/46

10.9) Operational flexibility of power plants with CCS GHG/08/47

10.10) Assessment of sub-sea ecosystem impacts GHG/08/48

10.11) Aquifer storage potential GHG/08/49

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ITEM SECOND DAY (08.30) Paper

11) Studies in progress and Study Prioritisation GHG/08/50

11.1) Incorporating technical improvements in Co2 capture GHG/08/51

11.2) Water Usage GHG/08/52

11.3) Injectivity improvements GHG/08/53

11.4) Quantification of leakage GHG/08/54

12) Studies to be reconsidered for future voting rounds/Members Ideas for Future Studies

No Paper

13) Network Meeting Feedback To include: Finance meeting, Joint network meeting, Environmental Impacts meeting

GHG/08/55

14) Proposal for new network on Chemical Looping capture GHG/08/56

15) 2008 Summer School GHG/08/57

16) IEA GHG interactions with IEA Regulators Network Feed back on IEA Activities/

GHG/08/58 No Paper

17) Members Activities No Paper

18) DONM GHG/08/59

19) AOB

20) Close of Meeting

Note: After the ExCo meeting a presentation will be given by members of the Australian Government on the proposed plans for a new Global CCS Institute for member’s reference.

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MOTION ON PROCEDURE AT THE MEETING

The following motion is proposed:

Anyone who is present at this meeting shall have the right to speak, when recognised by the Chairman.

To gain the Chairman’s attention, members should turn their nameplate onto its end. This will help the Chairman ensure that everyone who wishes to speak has a chance to do so.

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ELECTION OF VICE CHAIRMAN

By the rules of the Implementing Agreement the Officers of the Executive Committee are subject to election on a 2-year cycle. The Chair and Vice-chair must represent Contracting Parties. Sponsors are not eligible for Office, but by previous practice of the ExCo, are entitled to vote in the election. The position of Vice Chairman is due for election at this meeting. (The position of Chairman will fall due for election at the 36th ExCo in late 2009.) Dr Sven-Olov Eriksson has agreed to stand for re-election. No other nominations have been received. Actions A Proposer and a Seconder for Dr Eriksson’s nomination are required. Members are requested to unanimously approve the election of Dr Sven-Olov Eriksson as Chairman of the IEA Greenhouse Gas R&D programme for a further 2 years.

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IEA GREENHOUSE GAS R&D PROGRAMME

MINUTES OF THE 33rd EXECUTIVE COMMITTEE MEETING Berlin, Germany, 22nd – 23rd April 2008

PRESENT

Members Dr Kelly Thambimuthu (Chairman) Centre for Low Emission Technology Australia Dr Jon Davis Rio Tinto Australia Dr Vassilios Kougionas European Commission Mr. Bill Reynen

Dr Malcolm Wilson Natural Resources Canada University of Regina

Canada Canada

Mr. Michael Madsen Vattenfall Denmark Mr. Ilkka Savolainen VTT Finland Dr Gwenael Guyonvarch ADEME France Mr. Jürgen-Friedrich Hake Forschungszentrum Jülich GmbH Germany Dr Jochen Seier Projektträger Jülich Germany Dr Hee-Moon Eum KEPRI Korea Dr Robert Whitney CRL Energy Ltd New Zealand Mr. Trygve Riis The Research Council of Norway Norway Dr Faud Siala OPEC Dr Namat AbuAl-Soof OPEC Ms Marian Ferre CIUDEN Spain Mr. Sven-Olov Ericson (Vice Chair) Ministry of Sustainable Development Sweden Dr Gunter Siddiqi Swiss Federal Office of Energy Switzerland Mr. Erik H Lysen Utrecht Centre for Energy research The Netherlands Mr. Peter Versteegh SenterNovem The Netherlands Miss Rachel Crisp BERR UK Dr Jay Braitsch US Department of Energy USA Mr. Nick Otter ALSTOM Dr Markus Wolf ALSTOM Mr. Kevin McCauley Babcock & Wilcox Mr. Arthur Lee Chevron Mr. Ales Laciok CEZ Dr Cal Cooper ConocoPhillips Dr Tim Hill E.ON UK Mr. Richard Rhudy EPRI Mr. John Wilkinson ExxonMobil Ms Carrie Pottinger IEA Dr Johannes Heithoff RWE Mr. Gabriel Marquette Schlumberger Dr Helle Brit Mostad StatoilHydro Mr. Luc de Marliave TOTAL SA IEA GHG Mr. John Gale IEA GHG Mr. Brendan Beck IEA GHG Mr. Neil Wildgust IEA GHG Mr. Tim Dixon IEA GHG Dr Stanley Santos IEA GHG Mr. Mike Haines IEA GHG Mr. Toby Aiken IEA GHG Dr John Topper IEA EPL

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Observers Mr Ron Wilson Ontario Power Corporation Canada Mr Eemeli Tsupari VTT Finland Mr Francois Kalaydjian IFP France Dr Arne Holl BMWI Germany Dr Knut Kubler BMWI Germany Mr Patrick Hansen Forschungszentrum Jülich GmbH Germany Dr Hubert Howener Forschungszentrum Jülich GmbH Germany Prof Alfons Kather Hamburg University of Technology Germany Dr Makoto Akai AIST Japan Dr Nishio Masahiro AIST Japan Dr Kameichiro Nakagawa RITE Japan Prof Krzysztof Warmuzinski Polish Academy of Sciences Poland Mrs Mónica Lupión CUIDEN Spain Dr Anthony Surridge SANERI South Africa Mr Andrew Wharton BG Group Apologies Dr John Carras CSIRO Energy Technology Australia

Mr. Theodor Zilner Ministry of Transport, Innovation and

TechnologyAustria

Dr Kenneth Möllersten Swedish Energy Agency Sweden Dr Gardiner Hill BP

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1. WELCOME AND INTRODUCTIONS On behalf of the Executive Committee (ExCo), Kelly Thambimuthu welcomed Members’ and Sponsors’ representatives and observers and introduced those attending an ExCo meeting for the first time, including several new members of the programme team. 2. ADOPTION OF AGENDA The agenda and motion for procedure at the meeting (document GHG/08/01) was adopted. 3. MINUTES OF THE PREVIOUS (32nd) MEETING Document GHG/08/03 refers. The minutes were agreed, two amendments were received which were: Markus Wolf’s (Alstom) attributed activities on a CO2 purity study were made on behalf of Alstom, not ZEP as stated, although the results are to be made available to ZEP. Also the minutes will be amended to reflect that the offer of the summer school in Australia should be attributed to the CO2CRC and not the University of Adelaide. Members formally approved the minutes of the 32nd meeting subject to the listed modifications being made. 4. MATTERS ARISING FROM THE 31st MEETING Documents GHG/08/05 refers. John Gale clarified that action 9 was ongoing although contact had been made, and actions 10 and 17 were still open and ongoing. All other actions were either complete or in hand. Makoto Akai (Japan) confirmed that Japanese membership had not officially completed its transition from NEDO to AIST. John Gale confirmed that the IEA legal office had sent a copy of a letter from the Government of Japan confirming the change of membership from NEDO to AIST. Members unanimously approved the change in Japanese representation from NEDO to AIST. John Gale will update the IEA legal office once the minutes are approved.

Action 1: General Manager 5. OPERATING AGENT REPORT (No paper). John Topper explained briefly the role of the operating agent to new members and those attending for the first time, and also his role within the IEA Clean Coal Centre. He then went through the changes to the Programme team structure with reference to the appointments of Tim Dixon and Neil Wildgust. He also explained that there had been adjustments to some staff salaries to bring them in line with the industry standard, and that new pension arrangements had been introduced for most staff. He finished by stating that on the whole, the move to the new offices had gone extremely well, and the team were much more settled in the new suite of offices. 6. PROGRESS REPORT Document GHG/08/06 refers. John Gale summarised overall progress since the 32nd ExCo meeting. Membership Membership formalities have been completed for OPEC, Spain, Statkraft, CEZ Group and Conoco Phillips. With regard to new members, John Gale explained the issues encountered with the membership of South Africa, and Tony Surridge of SANERI was invited to outline the issues within South Africa impacting on the membership process. He explained that South Africa has a huge reliance on coal and coal technologies, and therefore are interested in looking at clean coal technologies and CCS. A study completed in 2004 identified significant potential for CO2 geological storage. All these issues contributed to South Africa’s/SANERI’s the desire to join the programme. Political issues within South Africa were hampering this process at present. In the event that South Africa could not join in the near future SANERI would wish to join as sponsors, with work ongoing to convert to full country membership at a later stage. Tony Surridge mentioned that the IEA GHG had been asked to participate in a CCS conference that took place in South Africa last February, specifically John Gale had been asked to speak and had accepted – Tony Surridge officially thanked IEA GHG and John Gale for their contribution to the success of that meeting and the subsequent road mapping exercise.

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The Executive Committee unanimously resolved to invite SANERI to join the Implementing Agreement for a Co-operative Programme on Technologies Relating to Greenhouse Gases Derived from Fossil Fuel Use as a sponsor in the absence of South African membership as a contracting party. The Executive Committee authorised the General Manager to expedite the formal procedures for SANERIs membership as a sponsor and complete negotiations on the terms and conditions on behalf of the Executive Committee. The Executive Committee also agreed unanimously for the General Manager to continue discussions to convert SANERIs sponsors’ role to full South African membership as a contracting Party in the future.

Action 2: General Manager The Executive Committee discussed a letter received from CEPAC (see Appendix 1), outlining CEPAC’s interest in joining the Implementing Agreement for a Co-operative Programme on Technologies Relating to Greenhouse Gases Derived from Fossil Fuel Use as a Contracting Party representing Brazil. The Executive Committee unanimously resolved to invite CEPAC to join the Implementing Agreement for a Co-operative Programme on Technologies Relating to Greenhouse Gases Derived from Fossil Fuel Use as a Contracting party on behalf of Brazil. The Executive Committee authorised the General Manager to expedite the formal procedures for Brazil’s membership as a contracting party and complete negotiations on the terms and conditions on behalf of the Executive Committee.

Action 3: General Manager John Gale then outlined that discussions had been held with CIAB with regard to them joining as a sponsor. CIAB despite being another IEA body had been told they could join an implementing agreement by IEA Legal Office. Members were asked to discuss any issues arising from this. Rob Whitney (New Zealand) expressed his concern as there were some members of the CIAB who were already supporting the programme through existing country membership arrangements such as those in place in New Zealand. CIAB membership could, therefore, have an adverse impact on some country memberships. The General Manager indicated that there were currently 40 members of the CIAB, only 6 had existing links to the programme. John Topper stated that he felt that those members were unlikely to withdraw from country based consortia supporting the IEA GHG if CIAB joined, and also that there were positive benefits because the coal industry is poorly represented in IEA GHGs current membership. Jon Davis (Australia) felt that it is unlikely to cause any issues and the potential benefit of CIAB joining as a member would be high. John Gale indicated that the discussions were on going and no decision had yet been taken, he had been invited to a CIAB Associates meeting in Beijing, in June to discuss the issue of CIAB membership further and he would report back to members as details became available. It was agreed that the General Manager should continue discussions with CIAB but report back to the Executive Committee before any decision was taken.

Action 4: General Manager It was also discussed that there is still some interest from other countries and organisations, namely: China, Greece, Ireland, Saudi Aramco, Linde, Air Products and IIE in Mexico. John Gale will keep members informed of any progress made on these discussions.

Action 5: General Manager Support of Members Activities John Gale outlined several aspects where the programme is supporting activities in member countries. These activities included workshops on CCS run at KEPRI in Korea, provision of technical support to members collaborating on the EC CCS Directive, support for Finnish efforts on CCS and most recently the programme organised a technical review of the US DOE Regional Partnerships Programme. Administration/Operational Issues John Gale explained that amongst the staff changes was the appointment of Tricia Watkins as Office Manager, and since the appointment many administrational activities and documents have been updated and streamlined, including a more comprehensive, user-friendly expense claim system, travel authorisation system, other filing and banking systems all contributing to the smoother running of the programme team office on a day-to-day basis. John Topper also commented that in December 2007

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the programme teams of the IEA GHG and IEA CCC were brought together to have a meeting as the CCC staff are becoming more involved in CCS work and it was thought that all team members should be aware of the work of each company to avoid overlap and promote co-operation. Studies John Gale stated only 60% of members had voted in this study round and encouraged Members to vote for which new studies they would like the Programme to undertake. He also stated that many Members voted late and urged Members to vote on time to avoid delaying the preparations for the ExCo meeting. Practical R&D The practical R&D projects that the Programme is involved in were outlined. It was noted that the final Phase of the IEA GHG Weyburn-Midale CO2 monitoring project had now started. Comments were received at this point from Bill Reynen (Canada) regarding the Weyburn project. He explained that the CSLF were making several awards for CCS projects, and that if Weyburn Phase I was officially complete it may be eligible for such an award. John Gale confirmed that Phase I was complete and that the results had been presented at GHGT 7. Research networks The network activities continued to be very popular amongst the technical community and Members alike and generate a lot of interest in the Programme as a whole. GHGT Conferences Progress on the GHGT-9 conference was summarised; 950 abstracts had been received and the Programme Committee and reviewers were now actively working to develop the technical programme for the conference. Questions were asked about GHGT 9 and whether the conference would run parallel sessions, and it was confirmed that there would be between 3 and 5 parallel streams of presentations on varying topics. Members and sponsors were advised to book hotel rooms early as there was a block booking made at the conference hotel (The Omni Shoreham Hotel, Washington D.C.), but hotel availability could not be guaranteed closer to the dates of the conference. The MOU between Ecofys and IEA GHG for GHGT-10 had been agreed; early next year IEA GHG would invite members to consider their interest in hosting GHGT-11 in 2012. Capacity Building Activities The main capacity building activity was the summer school. Planning was underway for the 2008 summer school to be held in Canada. The next summer school, after Canada would be held in Australia. Kelly Thambimuthu stated that the July break in Australia would be a good time to hold the event in terms of student availability. Bill Reynen informed the members that the CSLF are attempting to form a web-based discussion group for students interested in CCS and that this could form a useful dissemination tool to reach a wider audience. Tim Hill (E.ON-UK) questioned whether we were tracking the activities of the students after the summer school, and it John Gale said there were plans to do that at GHGT-9. Communication activities Elsevier had agreed to an increase in John Gales Editor in chief bursary for the journal. The journal was increasing in popularity and will go to six issues next year. Special issues for CCP2 and GHGT-9 are planned for 2009. The web sites remain well visited and Greenhouse Issues remains popular. 7. ANNUAL REPORT Document GHG/08/07 refers. John Gale reported that the Annual Report had been prepared, and a copy had been circulated to members prior to the ExCo meeting to receive comments. The report was well received, with only a few minor corrections being returned, mainly referring to names and address corrections to the list of members. Members were requested to confirm any further changes within 2 weeks to John Gale or Toby Aiken. Members approved the Annual Report subject to changes notified at the ExCo meeting.

Action 6: Members to notify General Manager of any changes to Annual report

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8. STRATEGIC PLANNING ACTIVITIES Document GHG/08/08 refers. The previous ExCo meeting in Korea agreed that there should be a small strategy planning group established to discuss the future strategy of the programme. John Gale reported that this group had been established and the group had met before this meeting. The Ad Hoc strategy group agreed that a formal strategy paper would be developed by the General Manager prior to the 34th ExCo meeting to be discussed by the Ad Hoc group and then presented to the members. A number of actions were agreed:

• Regarding contracting parties it was agreed that all IEA/OECD countries were free to join if they expressed their interest.

• Developing countries identified by the IEA NEET initiative, currently India, China, South Africa, Brazil and Mexico would be considered for membership.

• A set of guidelines would be drafted for approval for the addition of new sponsors to the programme.

Dr Faud Siala (OPEC) suggested that there should be guidelines drawn up for country membership as well as sponsor membership. Kelly Thambimuthu stated that we would continue to look at countries on a case-by-case basis Gabrielle Marquette (Schlumberger) indicated a concern about the eligibility of current sponsors following the development of these guidelines. It was confirmed by John Topper and John Gale that the guidelines would definitely not affect current sponsors, but would just act as an audit for assessing new sponsor membership. Comments were received by several members, starting with Peter Versteegh (The Netherlands) as to whether non-OECD countries were considered as contracting parties or some different status. John Topper and Kelly Thambimuthu confirmed that they are considered as contracting parties, but new country membership must be confirmed by the governing board of the IEA. The next comment came from Trygve Riis (Norway) regarding the size of the ExCo meetings. He observed that the meetings continue to grow in size and attendance, and questioned whether we should look to introduce a new format to the meetings. The question was taken by John Gale, and he confirmed that we were starting to look at alternatives, for example this 33rd meeting only permitted 1 space per member at the main table, with the alternates sitting behind their members with the observers. Kelly Thambimuthu confirmed that we would evaluate the effectiveness of this method over the course of this meeting and proceed accordingly.

Action 7: General Manager Another topic covered by the Ad Hoc strategy group was the proposed re-branding and re-design of the IEA GHG logo and corporate identity. Members expressed concern that the name would be changed, but it was confirmed that the full programme name would remain unchanged, although the name on the logo may be shortened to IEA GHG. It was agreed that the General Manager would look to retain a professional designer to undertake the re-branding exercise.

Action 8: General Manager Additional queries were raised with regard to the re-branding exercise, and John Wilkinson (ExxonMobil) asked whether there would be a change in focus of the activities undertaken by the programme. John Gale confirmed that the existing focus would remain the same, covering all greenhouse gasses, not just focussing on CCS. The need for a new mission statement and programme goals had been agreed by the Ad Hoc group; the General Manager will draft these for discussion and adoption by members before any rebranding takes place.

Action 9: General Manager A discussion followed concerning the arrangement of a 20th anniversary activity as the programme approaches its 20th year of operation in 2011. On the whole this was very well received, and it was agreed that the anniversary should be marked in some way. The General Manager agreed to look into possibilities and report back at the next ExCo meeting.

Action 10: General Manager

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Peter Versteegh (The Netherlands) mentioned that the world’s media focus on bio fuels at the moment could suggest it was timely to commit to some work or study in this area. Sven-Olov Ericson (vice-chair, Sweden) pointed out that there was some work undertaken on the topic under phase 3 of the programme, which indicated that there were difficulties in applying methodologies developed for fossil fuels to different technologies. Arthur Lee (Chevron) agreed that we should not rule any work out, but have to be mindful of a limited budget. Ilkka Savolainen (Finland) suggested there would be some use in looking at the development of a whole-energy-system, to which it was suggested that the programme team look towards writing a report on the topic rather than performing a study. John Gale confirmed he would consider the issue and bring a proposal forward to the next meeting as appropriate.


9. COMPLETED STUDIES Document GHG/08/09 refers. John Gale explained that for a number of reasons there was only 1 completed study to report at this meeting but that between now and the next ExCo meeting he expected at least 6 studies would be reported upon. Regional Assessment of Storage Capacity on the Indian Subcontinent Toby Aiken gave a brief review of the study completed by the BGS, the overview of which was circulated in the ExCo folders as background. The study was well received, and Dr Faud Siala (OPEC) questioned whether it was intended to perform any similar studies for other regions. John Gale stated that there had been a suggestion of a similar study covering South America, but there was very little interest at the time. Peter Versteegh (The Netherlands) questioned what the geopolitical issues were as the report alluded to geopolitical issues associated with cross boundary transport and storage, and it was clarified that international relations within the subcontinent were often somewhat strained. Jay Braitsch (USA) queried the technical barriers to basalt storage, and these were explained as a lack of knowledge compared with storage in oil and gas fields, and there was as yet no proof of concept of storage in basalt formation. Bill Reynen (Canada) mentioned inconsistencies in capacity methodologies causing issues with this type of study, and advised caution before continuing with similar studies in wider regions. John Gale replied that the study has used the CSLF capacity assessment methodology to try and make it comparable with other studies. Arthur Lee (Chevron) expressed interest in seeing a similar piece of work covering Latin America. John Topper commented that many of the countries in Latin and South America do not have accurate resource estimates, and so accurate storage capacity estimates are a long way off in these regions. John Gale noted that a study on a regional assessment for South America had been proposed previously to the ExCo but did not gain sufficient votes to go forward and had been withdrawn. 10. FUTURE STUDIES Studies in Progress and Prioritisation of New Studies Document GHG/08/10 refers. John Gale summarised the current status of ongoing studies and the situation regarding members voting on the prioritisation of future studies. John Gale also mentioned that although the backlog of studies looks excessive, many of the studies are now at various stages from draft specifications being written to tenders received and the work being underway. Members questioned that with the backlog as large as it is should we not look to undertake any new work until it has been cleared but John Gale reassured the membership that with the new staffing in place the team was at full strength to tackle the backlog and manage the new studies approved by the ExCo. Storage Capacity Coefficients Document GHG/08/11 refers. Neil Wildgust described the work involved with this proposed study which was initially suggested by the CSLF and members voted it in as the most popular of the suggested proposals.

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Bill Reynen (Canada) commented that the CSLF were pleased that the study was so well received by IEA GHG. He suggested that John Bradshaw, Sally Benson and Stefan Bachu would be ideally placed as expert reviewers for the study as the authors of the previous works. Jay Braitsch (USA) queried the output format of the proposal as it was unclear from the presentation. Neil Wildgust confirmed that the finished report would use existing information and data sources where ever possible, but wouldn’t go into country/region specific criteria, but would rather be a general overview with more detail available for geologists so that the report would be user friendly for many different end user groups. Kelly Thambimuthu stated that at some points the report would have to go into the level of detail required at a region/location specific level, and Neil Wildgust confirmed that where data was available, the study could consider that higher level of detail. Richard Rhudy (EPRI) stated that the US Regional Partnerships work had encountered difficulties in capacity estimation, and on many levels, detailed reservoir information is used. There are many different methodologies, and using case studies relies on using the methodology chosen by the contractor involved with a case which may involve assumptions contrary to the study aims. John Gale stated that currently there are many different methodologies, based on many different levels of information, and that the CSLF have started to try and get a uniform methodology and consistent approach to capacity estimation. This isn’t a one-off process, and as more information becomes available, the results of the study will require refining and adjusting. John Gale went on to state that we are not looking to enforce a methodology, but to agree with all interested parties on a consistent approach. At this point Nick Otter (Alstom) contributed by stating that as a member of the CSLF, this would look to build on the current work they have undertaken and provide the basis for the next step forward. Other members were concerned by the term ‘coefficient’ and urged that a detailed explanation was used to avoid confusion in the future. Kelly Thambimuthu summed up the discussion and members agreed to approve the study. Life Cycle Emissions of plants with CCS Document GHG/08/14 refers. Brendan Beck described this proposed study. Richard Rhudy (EPRI) questioned whether the study would look at pre-combustion as well as IGCC and Brendan confirmed that the study would look into pre-combustion, as well as IGCC. There followed an extensive discussion around the terminology and how to define a ‘baseline’ scenario and the outcome was that it was felt that there was a need to clearly define in the project specification what was meant by each term, and the intended outcomes of the project. Cal Cooper (Conoco Phillips) suggested including the word ‘power’ in the title to avoid further confusion. Brendan confirmed that this would be taken into account and that the study would look into the sensitivities involved with different fuels and methods of capture, but pointed out that the study would actually form a high level technical overview to avoid debate over different methods of capture, and to ensure a transparent methodology is used throughout the study for the determination of the life cycle emissions. This was supported by Jon Davis (Australia) who added that a similar work had been done in Australia and the study could benefit from this. Jay Braitsch (USA) commented that life cycle analysis was a very hot topical area for study, and that the US DOE has some work underway already through NETL, which could be of use to the study. Arthur Lee (Chevron) echoed Jay Braitsch’s comments, and added that if the study was to look at renewables, it must look at them in the same level of detail as traditional fossil fuels to avoid bias. Markus Wolf asked whether the study would look at different CO2 purity levels, and John Gale cautioned that the study may look at the effects of differing purity levels, but that it had not yet been decided how far to take the project as the financial burden of the study could spiral out of control if the study looked in detail into every eventuality. Lars Stromberg (Vattenfall) and Luc de Marliave (TOTAL SA) both commented that life cycle analysis was an important subject for power companies, and it was important for the study to use the most recent information to maintain credibility.

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Kelly Thambimuthu rounded off the discussion by summarising that the work was of great potential value, but the study must be very specific as to what the aims and intentions were. The study was approved, but the Project Team and Jay Braitsch should cooperate and determine the relevance of the DOE work already underway and possible re-align the scope of the work to tie in and analyse the methodologies already used.

Action 12: General Manager Integration of Post-Combustion CCS in Existing Industrial Sites Document GHG/08/12 refers. Mike Haines described the work proposed in this study. Lars Stromberg (Vattenfall) started the discussion by saying that the European sector had a lot of experience in heat sink coupling with power plants but that it was not as common outside Europe. On this point he stressed that the study should look as much as possible at the work already undertaken and completed to avoid ‘re-inventing the wheel’. The study should look towards a discussion of where CCS technologies are most favourable, and what the best situation for installation looks like. Mike Haines confirmed that the study would look at the areas discussed by the ExCo. Richard Rhudy (EPRI) questioned which solvent processes would be looked at, and Mike Haines explained that the key point is to look at the heat level requirement, and characterise the solvents by the temperature requirements. Johannes Heitoff (RWE) mentioned that the Rotterdam area would be a good case study since there are a lot of different operations, and it is likely to be a site which sees extensive future development as well. Cal Cooper (Conoco Phillips) mentioned that it may be worthwhile looking at the wider chemical industry and not focussing solely on post-combustion, and Mike explained that the financial constraints of the project limited the extent to which this could be included, but that this could form the starting point for further studies which could then look at the wider chemical industry. Kelly Thambimuthu confirmed that the study was agreed by members. CO2 Capture from a CTL Plant Document GHG/08/13 refers. Stanley Santos described the proposed study. Kelly Thambimuthu started the discussion by summarising the benefits and disadvantages of looking at the direct and indirect routes for CTL. Stanley confirmed that the study scope would be limited as the topic area is broad, and the costs involved with looking at a multitude of options would render the project financially unviable. Stanley Santos agreed with Kelly Thambimuthu’s opinion that there could be benefit in looking at variables affecting syngas and hydrogen concentrations in the scope of the project. Johannes Heithoff (RWE) expressed concern that with the financial scope of the project only considered as average, it could result in a poorer grade of results, and that a higher initial outlay would reap increased benefits in terms of the finished project being of a better quality. Stanley explained that the project would look to gain from any work underway or already completed to gain as much benefit as possible with a minimal cost to the programme, thereby maximising the benefit for the associated cost. A strong note of caution was sounded by Jon Davis (Australia) as he was aware of similar projects in the USA taking 12 months to obtain results at a cost of $1million. The difficulties in acquiring proprietary information could be prohibitive and at the costs involved in our studies, a worthwhile job would be difficult to achieve. The members for OPEC also expressed concern over the fact that the study was primarily looking at China, as China is now a net importer of coal and prices are going to rise, and there will be a significant knock on effect of these price rises. China is already reviewing plans and it is possible that proposed projects within China may not come on stream. There is also a big impact on the type of coal in terms of its rank, and moisture content. At this point John Topper explained that the IEA CCC were conducting some similar work on CTL technologies, and that in order to allay some of the concerns over the ease of access to data and the

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economic feasibility of the project, it may be better for the Programme Team to liaise with the IEA CCC staff to minimise the costs involved and attempt to constrain the scope of the study and re-present it at the next meeting. Kelly Thambimuthu summarised the study should not be approved at this point, but the Programme Team should reassess the project and if appropriate bring it back for reconsideration at the next ExCo meeting.

Action 13: General Manager What Have We Learnt To Date? Document GHG/08/15 refers. Brendan Beck described the proposed study. This proposal was very popular amongst the members, and Jay Braitsch (USA) started by saying that it was a very high value piece of work, and that IEA GHG were ideally placed to carry it out. The proposal is below average on financial terms as the programme team are proposing to carry out the work in house, without involving external contractors. The programme is placed very well for such a task as the continuity gained from past and present work will form a good basis for a thorough assessment. Arthur Lee (Chevron) confirmed that the programme team are ideally placed for such a review, and asked what format the outputs would take. The members discussed this at length, and it was thought that some type of written report coupled with a series of updates to our databases would be most favourable. There was also a suggestion to stage the work, looking at the entirety of reports available from the work carried out by IEA GHG, and compile an associated knowledge map, and then to commence the second stage which would involve going out to other companies and filling in from their data and reports. Erik Lysen (The Netherlands) advised that the emphasis should cover future planned projects as well as those underway already, and also projects that have been cancelled; taking note of the reasons behind the cancellations. John Gale pointed out that although this would be beneficial, the information from cancelled projects may not be readily available. Nick Otter (Alstom) supported the comments made and suggested that the work would be useful to those involved in the CSLF arena looking at the technology road map. He asked what time frame the programme team were looking at to complete the work and John Gale confirmed that we would begin straight away, and we could have an early piece of work with less information quite quickly, but Nick Otter suggested a 6 month timescale would allow more detail and still be a timely piece of work. It was mentioned that this kind of work would need continual updating to remain a relevant report, and it was suggested that it may serve a better purpose as a web based database, and that way it would remain a simple task to update it at regular intervals. Rachel Crisp (UK) cautioned against the inclusion of all proposed projects as there is a lot of noise in the industry about projects that are unlikely to ever be realised, and that the study would have to address a firm definition of capture ready to determine project suitability. The second note of caution was sounded by Jay Braitsch (USA) and he said that the discussion covered a lot of staffing time, with maybe as many as 200 technical papers to read and analyse. John Gale said the work would look to link in with the US Regional Partnerships, and also the work underway with CO2REMOVE which has a budget for such activity. Kelly Thambimuthu concluded that the study had been unanimously agreed to by the members. Corrosion and Selection of Materials for CCS Document GHG/08/16 refers, Mike Haines described the proposed study. Lars Stromberg (Vattenfall) questioned whether the study aimed to cover all materials covered by the entire process of CCS as this would entail a huge quantity of work. Vattenfall are carrying out pilot and demonstration projects to try and learn more about the issues involved which could be useful, but

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it may be best to constrain the project to the materials used in the compression and transport elements of the chain. Mike Haines confirmed that the study would constrain itself to the elements of the process which are subjected to changes due to the capture process. Tim Hill (E.ON UK) suggested that the report could look at defining a set of knowledge gaps which would be extremely useful, and E.ON may be in a position to assist with this aspect of the work. Arthur Lee (Chevron) felt that the study is not necessary at the present as industry is already doing the relevant work to perfect their processes and activities. He went on to say that the real benefit would be in communicating the results to the public rather than to recommend materials criteria or try to develop standards. This was contradicted by Markus Wolf (Alstom) as he felt the limitations need clarifying. Luc de Marliave and Cal Cooper (TOTAL SA and Conoco Phillips) felt that oil/gas industry engineers and scientists are breaking the new ground on this topic, and Mike Haines agreed that a key part of the study would be to gather knowledge from those working in the areas, and compile a report with this basis. Kelly Thambimuthu suggested that the study be agreed by the members, and the study proceeds as outlined at the meeting and taking into consideration the comments made by the members. Analogues for CO2 Storage Document GHG/08/17 refers. John Gale described this study proposal. Kelly Thambimuthu observed that it would be both necessary and important to include NGO’s in the review process described in the study, which was agreed by John Gale. Luc de Marliave (TOTAL) thought that this is a very important piece of work, and that tools for communication are vital in providing information to the public, especially to explain that CCS is not dissimilar to natural gas storage. Members expressed the opinion that the work must be seen as unbiased to hold value, and a neutral tone must be adopted to avoid the situation where it appears the report is defending a position in the field rather that providing information on the subject. John Gale confirmed that the tone and focus would be adjusted to address rather than build public confidence on the subject. Rachel Crisp (UK) suggested the study looks at areas where safe containment has been proved, not just examples of analogues that leak as this will be used by policymakers to determine the safety of CCS as well as providing a source of information to the general public. Michael Madsen (Denmark) suggested that the study also explains the properties of CO2 to a non-technical audience and it was agreed that the study would look into including this aspect. Other Suggested Studies A query arose from Rachel Crisp (UK) about one of the studies that did not have enough votes to be presented at the meeting, proposal 33-13: The Effects of CCS on the CDM Market, and asked whether there was a possibility of looking at this study again as the study is subject to certain time critical elements and thus it would be extremely beneficial. John Gale said that although a detailed presentation had not been prepared, Tim Dixon had some comments on this topic in a later paper that could be discussed, and as we have dropped one proposed study, we have the capacity to bring this study forward. The Effects of CCS on the CDM Market Document GHG/08/23 refers. Tim Dixon presented the report, and described the elements of the study now being evaluated by members. Kelly Thambimuthu asked what completion date we would be aiming at if the members approved proceeding with the study, and Tim Dixon suggested that we would aim for a deadline of December for the COP/MOP 4 meeting. Kelly Thambimuthu summarised members opinions of this study by confirming it was agreed pending a proposal was drawn up by the programme team and circulated to the members within 3 weeks of the meeting for comment.

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Action 14: General Manager. 11. MEMBERS IDEAS FOR FUTURE STUDIES John Gale will invite members after the meeting by e-mail to submit their ideas on future studies

Action 15: General Manager. 12. RESEARCH NETWORKS Future development of the Oxy-Combustion network Document GHG/08/18 refers, and Stanley Santos presented this update on the activities of the network. The network had become extremely popular, the most recent meeting was fully subscribed within a week of opening registration The popularity of the network, meant it was necessary to hold parallel sessions to meet the needs of all interested parties but we were still turning people away. For the next meeting he highlighted the need to expand the network into a mini-conference series. Concerns were raised by Dick Rhuddy (EPRI) over the enhanced management needs of such a change, but many of the members who actively take part in the networks assured those with concerns that the networks effectively manage themselves, with a steering committee made up of network members and costs are also covered by registration fees and sponsorship. Lars Stromberg (Vattenfall) congratulated the programme and specifically Stanley Santos on the success of the network, and this was mirrored by many members. Vattenfall will consider hosting the first mini conference next year, which should coincide with 1 year of operation of their pilot plant. Kelly Thambimuthu summarised that members agreed that the network would convert into a mini-conference series.


13. PRACTICAL INITATIVES In the interests of time this item was dropped from the Agenda. John indicated that there were presentations available in the member’s folder and if members had any questions the programme team would be happy to answer them 14. EU CCS DIRECTIVE AND EU ETS Document GHG/08/22 and 23 refer. Tim Dixon gave an overview of the EU CCS Directive and ETS. Members expressed their thanks for a comprehensive overview of the directive, as it gives a valuable insight into the future of CCS within Europe. John Wilkinson (Exxon Mobil) asked whether the programme had any active links with the CO2REMOVE project, and John Gale confirmed that we were involved in Task 2 which addresses regulatory guidance. Richard Rhudy (EPRI) requested a draft of the directive be made available to members, and Tim Dixon confirmed that the directive is available on the EC website and that members would be provided with the link to the web site.

Action 17: General Manager The COORETEC project was also mentioned which is now available in an English language version which will also be circulated to the ExCo members at the forum to be held after the ExCo meeting.

Action 18: General Manager Document GHG/08/24 refers. Tim Dixon gave an overview of the recent CSLF meeting held in South Africa with input from Rachel Crisp (UK). The new arrangement with IEA GHG is welcomed. The main CSLF outcomes were that Dynamis is recognised as a CSLF project, the next CSLF meeting will be Ministerial, the CSLF will send a letter to UNFCCC in support of CCS in the CDM, a new Task

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Force will be created on Communications, new databases will be created on market incentives and demonstration projects, and endorsement of the IEA/CSLF Calgary recommendations to G8. Bill Reynen mentioned that the CSLF is now 5 years old, and as such is half way through their 10 year mandate. At this juncture, they are looking to review the progress made, review the strategy for the following 5 years and to look at any changes necessary. 15. IEA MATTERS OF INTEREST AND G8 RECCOMENDATIONS No representative of the IEA was present, and no paper was tabled by the IEA secretariat. On the recommendations to the G8, Bill Reynen commented that 3 workshops had been held by IEA/CSLF to develop recommendations on CCS to take forward to the G8 meeting to be held in Japan this year. The recommendations based on a consensus from 60 organisations that had attended the series of Near Term Opportunities workshops were then to be developed by the IEA into briefing document to be presented to the next G8 meeting. The status of the recommendations document from the IEA was uncertain. In the absence of the IEA recommendations, the CSLF policy group had decided to forward the recommendations from the Near Term Opportunity workshops directly to the G8. Kelly Thambimuthu suggested that the members contact their IEA CERT representatives as a means of providing feed back to the document being developed by the IEA for presentation to the G8 leaders at the summit to be held in Japan. 16. FINANCIAL OVERVIEW Documents GHG/08/25-27 refers. John Gale presented the financial reports for the preceding year, and summarised by saying that finances were looking healthy, and the programme should not require any draw down of funds this year. Despite increased staffing costs and a trend in increases in study costs, savings made elsewhere negate the effects of these rises, and the cost increases have been included in the budgetary planning for the following year. Robert Whitney (New Zealand) queried whether print and postage costs could be reduced by emailing PDF’s of reports to member countries for local printing and distribution. John Gale agreed that the point was worth investigating.

Action 19: General Manager Members approved the budget for 2008. It was agreed at the 32nd ExCo meeting in Korea that future operating phases of the programme be realigned with that established by the IEA for this implementing agreement. John Gale proposed that phase 5 which is due to end in November 2009 be extended by two years to end in November 2011, in line with the IEA Implementing Agreement Phases. Any members who have difficulties with the two year extension in terms of their own internal approvals and processes should discuss this with John Gale.

Action 20: Members/General Manager 17. DATES OF NEXT MEETINGs Document GHG/08/28 refers. The 34th ExCo will be held in Washington D.C. prior to the GHGT 9 conference on the 14th and 15th of November 2008. It will be held at the Omni Shoreham Hotel in Washington, which is the same venue for GHGT 9. The 35th meeting is confirmed as occurring in the week commencing the 20th of April 2009, and will be held in Brisbane, Australia and hosted by the Australian Consortium to the IEA Greenhouse Program. The 36th meeting will be hosted by Switzerland/Alstom in Zurich or Berne in the autumn 2009. Subsequent to the meeting, Spain confirmed its interest in hosting the 37th meeting in spring 2010.

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The Netherlands will confirm their interest in hosting the 38th meeting in Amsterdam adjacent to the GHGT-10 conference in the autumn of 2010. The 39th meeting is provisionally held for Norway to host in Bergen in spring 2011. 15. ANY OTHER BUSINESS Jon Davis (Australia) reported on the launch of the Otway project in Australia. It took place recently during a category 3 cyclone with winds of up to 130kph, and injection has commenced. Bill Reynen (Canada) reported that a video of the project was presented at the CSLF meeting and was very well received; it is available on the CSLF website. Kelly Thambimuthu thanked Germany for hosting the meeting, which he commended as being organised with great style, was very successful and was also the largest ExCo held to date. He then declared the meeting closed.

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i

Appendix 1

Letter from CEPAC/BRAZIL

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15 April 2008

Dr. John Gale IEA Greenhouse Gas R&D Programme The Orchard Business Centre Stoke Orchard - Cheltenham Gloucestershire, UK -GL52 7RZ Dear Dr. Gale, This letter is to officially demonstrate our interest to join the IEA Greenhouse Gas R&D Programme as a contracting party representing Brazil. The CEPAC (Carbon Storage Research Center) is a center based on the Pontifical Catholic University of Rio Grande do Sul, one of the largest universities in Brazil. CEPAC is an interdisciplinary center for research, development, innovation, demonstration and deployment of technologies on carbon capture and storage for climate change mitigation and energy production. CEPAC activities are focused on characterization of reservoirs aimed for CO2 storage, numerical and experimental work on the reservoir and seal integrity, mineral and industrial waste carbonation, unconventional forms of energy productions related to CO2 storage, such as ECBM, EOR and UCG with CCS, in addition to analysis of potentiality, risk, capacity, durability and profitability of CO2 geological storage activities, associated or not to energy production (oil, gas and hydrogen). Among the objectives of CEPAC are:

1. Implementation of R&D CCS projects in Brazil; 2. Implementation of pilot and demonstration projects for CO2 storage and energy production in

Brazil; 3. Preparation and training of human resources to supply national demands on R&D. 4. Supply specific demands for the increase in oil recovery, as well as other fuels (gas and

hydrogen); 5. Contribute in the life quality improvement by means of sustainable fossil fuel exploitation.

The current structure spans 1100 m2, holding several research laboratories (Supercritical Carbonation Laboratory; Geochemistry and Petrology Laboratory; Numerical Modeling Laboratory; Coal Analysis Laboratory; Wellbore Integrity Laboratory), with ca. 55 professionals from diverse areas, mainly geologists, geographers, chemists and engineers, and undergraduate and graduate students. Research funds for CEPAC activities are fundamentally supported by PETROBRAS, so IEA GHG membership will depend on external funds. We are expecting to raise funds to cover IEA GHG membership in a short period of time. We look forward to contribute to IEA GHG Programme as an active contracting party representing Brazil. Sincerely yours, Marcelo Ketzer Head coordinator CEPAC, Carbon Storage Research Center PUCRS – Av. Ipiranga 6681, Predio 96J TecnoPuc 90619-900 Porto Alegre, Brazil

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CORRECTIONS TO MINUTES

No corrections were received from members on the minutes. The IEA Notified IEA GHG that SANERI as a Government research body could not become a sponsor under IEA Implementing Agreement rules. This was duly noted SANERI were informed and membership formalities proceeded with SANERI acting as the nominated party for South African membership as a contracting party Members are asked to formally approve the minutes.

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LIST OF ACTIONS AND STATUS

Introduction The status of actions from the last meeting is presented below. In order to save time at the meeting, this information will not be presented but members are welcome to ask questions about any item. Action

No. On Action Status

1 General Manager

Update the IEA legal office on change of Japanese member

Done

2 General Manager

Expedite procedures for SANERIs membership on behalf of South Africa

Done

3 General Manager

Expedite procedures for Brazil’s membership as a contracting party

Done

4 General Manager

Continue discussions with CIAB re membership and report back to the ExCo

GHG/08/30

5 General Manager

Keep members posted on new member interests GHG/08/30

6 Members Notify General Manager of any changes to Annual report

Done

7 General Manager

Assess seating process at ExCo Done

8 General Manager

Retain a professional designer to undertake the re-branding exercise

In-hand

9 General Manager

Draft new mission statement and programme goals

Done

10 General Manager

20th Anniversary celebration In-hand

11 General Manager

Consider Bio fuels study by IEA GHG Not actioned

12 General Manager

Co-operate with USDOE on scope of LCA study In-hand

13 General Manager

Reassess CTL study and bring back to meeting if appropriate

Done

14 General Manager

Circulate overview on CCS/CDM study to members

Done

15 General Manager

Invite members to submit study ideas Done

16 General Manager

Convert oxy fuel network meetings into a mini conference series

Done

17 General Manager

Provide link to web site on draft EC Directive Done

18 General Manager

Circulate COORETEC details in English after ExCo

Done

19 General Manager

Consider printing in member countries to reduce costs

Done

20 Members Contact GM if any issues with 2 year extension to Phase 5

Done

25


OPERATING AGENTS REPORT

The Operating Agent, IEA Environmental Projects Ltd will provide a verbal report at the meeting on staffing matters and issues related to membership subscriptions. Points and actions arising will be recorded in the minutes of the meeting.

NOTES

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34th EXECUTIVE COMMITTEE MEETING

PROGRESS REPORT Introduction Activity in the CCS area continues to grow with the Programme team facing regular requests to participate in meetings and seminars. The active role of the new team members recruited prior to the last ExCo meeting (33rd Berlin, Germany) and the growing expertise of our younger team members means that the Programme Team is now much better placed to accommodate these extra demands than previously. However, we still have to be selective in choosing which meetings to attend so that we do not distract ourselves too much from our core work activities. Also, we are still one staff member down with Andrea Lacey on maternity leave and we will not return to full complement until early next year. Participation in the Programme There continues to be an interest in membership of the Programme and opportunities are taken at every chance to promote the Programme to interested parties. At the last ExCo meeting (33rd Berlin, Germany) members agreed to invite South Africa and Brazil to join as Contracting Parties. As far as South Africa is concerned, the formalities of membership are well advanced and it is hoped that these will be complete by the time of the ExCo meeting. Brazilian membership is still in process. Also, it was reported to members that the CIAB (Coal Industry Advisory Board) had expressed their interest in joining the Programme as sponsors. CIAB membership had been approved by the IEA. Since the last meeting, those members that were either jointly represented in both groups or who had CIAB members in their consortia were canvassed to ensure that CIAB membership would not lead to the loss of any existing members of the Programme. None of those asked expressed any problems and endorsed CIAB membership. The General Manager has been invited to attend the CIAB Plenary meeting in Paris on 6th/7th November just prior to the ExCo where CIAB members will vote on CIAB membership. ACTION: Members are asked to unanimously approve the CIAB’s participation as a Sponsor in the IEA Implementing Agreement. Members are also requested to authorise the General Manager to expedite the formal procedures for membership and complete negotiations on the terms and conditions. Developments since the last ExCo meeting. Outline terms and conditions for membership have also been sent to one potential contracting party (Greece) and four potential sponsors; Petrobras, JGC (Japanese Gas Corporation), Mitsubishi Corporation and ENEL (Italy) following expressions of interest from these organisations in becoming members of the Programme. Dr. N. Koukouzas from the Centre for Research & Technology Hellas (CERTH) in Greece has been invited to attend this ExCo as an observer. The General Manager will now attended two meetings in Athens, Greece with the Public Power Corporation to help build capacity on CCS and in the second meeting the Ministry of Mines and Energy. The latter meeting will have taken p-ace after this progress report was drafted and the outcome will be reported at the ExCo meeting. Petrobras – The Programme was invited to participate in the second Petrobras International symposium on CCS. At the symposium Petrobras expressed their interest in joining the

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Programme. Petrobras have extensive research activities in CCS in Brazil; a copy of a presentation on Petrobras CCS activities will be circulated to members before the meeting. ACTION: Members are asked to unanimously approve the Petrobras’s participation as a Sponsor in the IEA Implementing Agreement. Members are also requested to authorise the General Manager to expedite the formal procedures for membership and complete negotiations on the terms and conditions. ENEL have accepted an invitation to attend the ExCo as an observer and expressed their interest in joining the Programme. ACTION: Members are asked to unanimously approve the ENEL’s participation as a Sponsor in the IEA Implementing Agreement. Members are also requested to authorise the General Manager to expedite the formal procedures for membership and complete negotiations on the terms and conditions. JGC have also accepted an invitation to attend the ExCo as an observer and expressed their interest in joining the Programme. JGC’s participation is supported by Japan. ACTION: Members are asked to unanimously approve the ENEL’s participation as a Sponsor in the IEA Implementing Agreement. Members are also requested to authorise the General Manager to expedite the formal procedures for membership and complete negotiations on the terms and conditions. At the time of writing this report Mitsubishi Corporation were awaiting Corporate approval to follow up their interest participation in the Programme. Other Interested parties China continues to show some interest in Membership of the Programme. Dr Lu Xuedu from MOST will again be invited to attend the meeting as an observer. Low level discussions on membership have also been held with Ireland. Air Products have indicated they do not want to become sponsors as have Saudi Aramco. Discussions with all the interested parties will continue and members will be updated on progress as appropriate. Administrational/Operational Issues Since the last ExCo meeting we have continued to rationalise our operations to improve office efficiency and reduce wherever we can operational costs. Regarding office efficiency, we have revised and updated procedures for the management of contracts and aligned the technical requirements with our financial reporting needs to our accountants to allow better reporting of contract activity in the management accounts and better forecasting of our future cash flow requirements now. This also means we can more actually predict our financial transfer arrangements from our operating and treasury accounts. We have had a series of meetings with the accountants to help us improve our reporting procedures to allow more accurate posting of the financial data by the accountants and undertaken a rationalisation of their cost codes to better reflect the needs of the Programme. These activities will lead in due course to the programme receiving a set of management accounts each month that better reflect our financial activities. In the coming months procedures for the management of the summer school and research network activities to ensure tighter financial controls are in place will also be established.

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With regard to suppliers one area that has been problematical has been our postal services. After a 3 month trial period we have now switched our postal services to a mailing house who we feel offer a more reliable service at a significantly reduced cost. We will continue to monitor this area over the coming months. Technical Studies Technical studies form the heart of the programmes activities. Progress on technical studies will be discussed under item 10, paper GHG/08/45 in combination with member’s selection of new studies to support. In the period since the last ExCo meeting, we expect the overviews of up to 6 studies to have been sent to members and at least three studies issued as reports. In addition, two technical reviews will have been produced and circulated to members. This is a significant increase over the previous six months. This reflects the fact that our net staff resources have increased and that priority has been given to getting studies underway closed out and reported. One issue to raise with members is the apparent lack of response to the overviews we are sending out. The last two overviews sent out had no member comments returned, we hope members are reading them because this is a necessary control loop to ensure we do not give out policy prescriptive messages in our study reports. We are continuing to monitor the issue of contractor availability. We have not yet encountered a situation where we do not feel that we have received a suitable tender. We are also continuing to monitor the increase in cost of studies tendered. The Programme continues to receive a large number of requests for copies of its study reports, mainly from companies, students and institutions. For example, 221 requests for reports were received in 2007 so far this year we have received 332 report requests. International Research Networks Three network meetings have been held since the last ExCo meeting. These are: • • The 11th CO2 Capture network meeting was held in Vienna, Austria on 20th -21st May,

hosted by EVN - an Austrian power utility. • A joint meeting of the three storage networks (monitoring, risk assessment and well bore

integrity) was held in New York, USA between the 9th and 11th June 2008. The meeting will be hosted by USEPA and supported by EPRI. The aim of the workshop was to encourage cooperation and knowledge transfer between the three networks and help focus their activities for the forthcoming years. The results of this workshop will be reported in paper GHG/08/55

In addition to these network meetings a workshop on environmental impacts of CO2 leakage was held in Nottingham, UK on the 15th and 16th September 2008. The outcomes of the meeting will also be summarised in paper GHG/08/55 The presentations given at these workshops and the reports are available to members on the website: http://www.co2captureandstorage.info/networks. Members requiring log in codes should contact Sian Twinning, e-mail - [email protected] The network meetings planned to date for the coming year include: Network Date Venue Hosts Modeling workshop 10th-12th Feb 2009 Orleans, France BRGM/Schlumberger

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Risk Assessment 16th-17th April 2009 Melbourne, Australia CO2CRC Well Bore integrity 13th-14th May 2009 Calgary, Canada Alberta Research Centre Monitoring 2nd – 4th June 2009

(TBC) Tokyo, Japan AIST/University of

Kyoto Oxyfuel conference 8th-11th September

2009 Cottbus, Germany Vattenfall – main sponsor

Members interested in attending any of these meetings should contact Sian Twinning, e-mail - [email protected] to be placed on the mailing list. Practical R&D Activities IEA GHG is currently participating in four EC supported practical R&D projects which are: Dynamis, MOVECBM, CO2ReMoVE and CO2SINK. In Dynamis, IEA GHG had a significant technical input to the work programme, this work has now come to an end and the results of this work were reported to members at the last meeting. For MOVECBM IEA GHGs activities are mostly involved with dissemination of the final results, a workshop will be organised to present the results is planned at GHGT-9. MOVECBM will have finished by the time of the ExCo in Washington, Toby Aiken will be attending the General Assembly meeting at the end of September and a report will follow but but is unlikely to be able before the ExCo meetings. The results from the MOVECBM project will be presented at the 35th ExCo meeting (Brisbane, Australia). Brendan Beck is co-coordinating IEA GHGs involvement in the European CO2ReMoVe project. IEA GHG is principally involved in work page 4 (SP4) of the multi partner project. The main objective of SP4 was to develop set permitting guidelines for a CCS project. This subgroup was fast tracked in order to contribute to the Draft EU CCS Directive. The group did complete a set of draft guidelines which were submitted into the consultation process. . Since completing the major initial objective, SP4 is not looking at how the EU CCS Directive could be applied by member states. One specific task included in this is the identification of key learning areas from demonstration projects which will be done in conjunction with the IEA GHG activity on “what have we learnt”. SP4 are charged with leading the information gathering for the European and North African CCS Demonstration projects which will be feed into the IEA GHG study. At the time of the last ExCo meeting in April the CO2SINK project was making final preparations for the start of CO2 injection. In late June all checks on the equipment were complete and the injection well was prepared to receive the first CO2. An official opening ceremony was organised for 30th June and this was well attended by senior persons from the German Government as well as the press. Injection proceeded well albeit at somewhat lower rates than initially planned. CO2 was detected at the first observation well in mid July. Injection was been suspended in July in order to conduct cross-well seismic and electric resistance tomography using the vertical electrode arrays which are installed in the wells. Analysis of this data is proceeding and the researchers are experimenting with interpretation methods for this interesting set of information. Further campaigns of down hole seismic and tomography are planned. The membrane gas sensors in the observation wells are working well and the krypton tracer in the CO2 has also been detected. Also the down-hole fibre optic continuous temperature sensors have yielded more interesting data on the flows which are occurring at the well bore. Injection is continuing and the consortium is currently assessing whether to take up an offer from Vattenfall to supply technical grade CO2 from the Schwarze Pumpe oxy-combustion plant for a period of about 6 months.

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The project is expecting to get an extension of 1 year from the EU Commission bringing the project end date to 31st March 2010. At that time it is proposed to abandon the three wells and the consortium is trying to get funding for a scientific abandonment project which will be known as CORA. This will include a final 3D seismic acquisition and a range of experiments associated with well abandonment. Communications Activities A summary of communication activities since the last ExCo meeting is provided below: Web sites The Programme continues to support and maintain two web sites: www.ieagreen and www.co2captureandstorage.info. Since the last meeting we have also established a Wikipedia web site which can be found at: http://en.wikipedia.org/wiki/IEA_Greenhouse_Gas_R&D_Programme. The hits on the two main web sites in the last six months were: www.co2captureandstorage.info - 1,191,692 hits 71.2% viewing more than 1 page (cf 974,931 in the last quarter) and www.ieagreen.org.uk - 804,364 hits 73.7% viewing more than 1 page (cf 769,483 in previous six months) The number of hits received continues to grow. Greenhouse Issues Two issues of the newsletter have been published since the last ExCo meeting. The circulation list has now slightly decreased to 7360, with 6870 for printed copies. Some 490 people are now on e-mail circulation. Feedback received indicates that the newsletter is well received and most readers prefer hard copy. The decrease in printed copy is principally down to the fact that we have initiated a major clean up of the database in the last six months to get rid of old/duplicate entries and remove a large number of returns that have recently been received and placement of all new registrants on e-mail alerts. We have seen an increase in the size of the newsletter over the year as the number of articles we receive has increased reflecting the increased activity in this research field. Also the number of cuttings has grown considerably reflecting the large number of CCS related announcements that are coming out. The increase in size has largely offset cost savings made to date. However, IEA GHG has switched mailing houses in an effort to reduce postage costs whilst maintaining the efficiency of mailing. IJGCC The journal is increasingly popular as a source of published papers for conferences, projects and individuals. In 2009 the numbers of annual volumes will increase from 4 to 6 to meet increased demand. After 2 years of operation we hope to gain an Impact Factor at the end of this year. The first meeting of the Editorial Board for the journal will be held at the GHGT-9 conference. A fourth Associate Editor (Jim Dooley from PNNL, USA) will be added for 2009 to assist with paper handling and reduce the General Managers paper handling role. GHGT Conferences The GHGT-9 conference will take place directly after this ExCo meeting. Based on the the number of abstracts received we expect that the conference will exceed the attendance record previous event GHGT-8 held in Trondheim, Norway which attracted some 960 delegates. (Note: at the time of writing this paper in October 2008, over 960 delegates had registered, a final flurry of registrations in the month before the conference is common) The organisers received some 900 abstract submissions for GHGT-9, which was the largest number ever submitted. The quality of abstracts received was higher than for previous

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conferences and overall we only rejected some 50 abstracts outright. This left some 850 papers to be found a home in the programme. To accommodate the increased number: of abstracts we have, increased the number of parallel sessions for the middle two days from 5 to 6 and expanded the poster session to have two separate sets of poster viewings will also be up for the first three days of the conference Some 276 papers will be presented orally. This will again be the highest number of oral presentations that have been given at a GHGT conference. In addition, 570 papers were invited to be presented as posters. At the time of writing this paper 463 authors have confirmed they will present their poster papers. We will not distinguish between oral and poster presentations in the proceedings. Each paper irrespective of how it was presented will be given eight pages in the proceedings. The papers will also be presented in technical themes and not segregated as papers and posters. A CD of the proceedings will be produced for delegates. Elsevier will also publish the proceedings electronically on ScienceDirect on their new Energy Proceedia web site. The Technical programme for the oral presentations GHGT-9 has now been finalised and can be found on the GHGT-9 web site at www.mit.edu/GHGT9. In addition during the technical sessions we will have 5 discussion panel sessions on key topics for CCS implementation to promote debate and attendee participation. This is the first time we have done this during the conference itself but we feel the need to panders to attendee feedback from previous conferences to have more debating/discussion time. The programme for the week looks like:

• Registration will open on Sunday 16th November. On that evening there will be an opening reception held at the Omni Shoreham Hotel.

• On Monday we will open the conference and then have a short plenary session with two key speakers to give an overview of the status of CO2 capture and Storage (CCS) and the impacts of climate change. After the plenary session we then split into have three parallel sessions. These sessions on capture, geological storage and policy each containing three invited papers will aim to set the tone of the conference but setting out the challenges and issues we need to address for global implementation of CCS to be realised. After dinner we will split into the first of our parallel technical sessions. This session will be followed by the poster session.

• The following two days (Tuesday and Wednesday) will comprise a series of technical

sessions in six parallel sessions. In addition during the technical sessions we will have 5 discussion panel sessions on key topics relating to CCS implementation to promote debate and attendee participation. The inclusion of these sessions during the technical programme panders to attendee feedback from previous conferences to have more debating/discussion time.

• The conference dinner will be held on Wednesday evening. The dinner will be held at the Smithsonian National Air & Space Museum.

• On the final day we will return to 5 parallel technical sessions in the morning. After

lunch we then begin to wrap up the conference. The first afternoon session will involve a panel discussion followed by an open debate on what have we learnt from the conference and what are the challenges ahead. This will effectively set the scene for GHGT-10 to be held in 2010. After that we will have the traditional hand over to the next conference organisers for them to tell you all about their plans for GHGT-10.

We now have some 22 sponsors and supporters many of which are sponsors of the Programme. We thank all the sponsors but especially our members for supporting the conference. These sponsors are in addition to the main sponsor which is USDOE.

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Following on from the conference a Special Issue of IJGGC will be produced focusing on selected papers from GHGT-9. Also IEA GHG will publish a summary document on key learnings from the conference for general circulation. GHGT-10. The MoU between IEA GHG and the organisers of the GHGT-10 conference (Ecofys and University of Utrecht) which will be held in Amsterdam in 2010 has now been signed. An organising committee has been formed. The conference will be held at the Amsterdam RAI in September 2010. Detailed planning for this conference is now underway. Capacity Building Activities The main capacity building activity in the last six months has been the second annual international summer school on CCS held at the Tigh-Na-Mara resort hotel on Vancouver Island, British Columbia, Canada in August 2008. A report of this meeting will be provided at the meeting see paper GHG/08/52. Further schools are being planned in Australia in 2009 and Norway in 2010. Brazil has expressed an interest in hosting the 2011 summer school. An international steering committee has been established, which is chaired by Jürgen Freidrich Hake from FjZ (Tim Dixon from IEA GHG is the co-chair) to help steer the future direction of the summer school activities. Stanley Santos was invited to attend and present by IIE of Mexico at a CSLF capacity Building workshop held in July 2008. IEA GHG and CSLF are organising a capacity building activity at GHGT-9. At the time of writing this report full details were not available but these will be presented at the meeting. IEAGHG held a coordination meeting with the CSLF organisers during the Petrobras conference on 10 September. The capacity building programme will include an introductory session on the Sunday evening, a suggested ‘technical’ and a ‘policy’ track through the GHGT9 programme, availability of mentors, a wrap-up session on the Thursday evening, and a dinner on the Tuesday evening. Brendan Beck attended the USDOE funded RECS summer school in Albuquerque, New Mexico in August this year. The school was attended by 25 students and young professionals primarily from the US and Canada. Similarly to the IEA GHG summer school, the aim of the RECS school was to introduce the attendees to all aspects of CCS and to allow them to network with peers from the CCS industry. Brendan gave two presentation at the summer school, one on the international legal and regulatory status of CCS and one on the IEA GHG programme. Collaboration with other Groups A summary of activities where IEA GHG has collaborated with other groups or plans to in the period after the ExCo is summarised below: Finance Meeting. A second workshop looking at the financing of CCS projects post demonstration was held in June 2008 in New York, USA. The workshop was organised in is collaboration between IEA Clean Coal Centre the World Coal Institute. Chevron sponsored the workshop. A report of the workshop is provided in Paper GHG/08/50. CSLF Technical Group/PIRT. IEA GHG continues to co-operate with CSLF/PIRT but the next meeting of the Technical group will be held after the ExCo meeting on the 17th November. Blue Wave/IEA WPFF. Blue Wave Resources on behalf of the IEA WPFF are organising a second publication of a glossy report entitled “CO2 Capture and Storage Geologic Storage of CO2 –Meeting the Challenge of Climate Change”. The report focuses on the readiness of CCS and helps to counter the Greenpeace comment that the technology is not yet ready for

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deployment. IEA GHG has also agreed to assist Blue Wave Resources/IEA WPFF with the preparation and publication of this report as it did for the previous report. USEPA. The US EPA developed a Vulnerability Evaluation Framework (VEF) to systematically identify those conditions that could increase the potential for adverse impacts to human health and the environment that could result from geological storage of CO2. The VEF supports the CO2 injection and storage Rule proposed by the EPA Office of Water; assists permitting authorities in identifying data needs, monitoring, mitigation and verification requirements, and ultimately assist in determining site suitability. The IEAGHG organised the technical peer-review for the draft VEF, drawing upon members of the IEAGHG’s Risk Assessment Network. This peer-review was completed in May, the results were used by EPA for the final VEF which was issued with the proposed Rule in July 08. EU ZEP. IEA GHG is participating in the EU Zero Emission Platform’s (ZEP) Policy and Regulation Task Force. Much of the current focus of this Task Force is on the EU’s proposed CCS Directive and ETS Directive. IEAGHG attended a Task Force meeting on 3 July and is providing supporting evidence for ZEP discussions, including on CO2 stream purity issues. The annual ZEP General Assembly will be on the 10 Nov in Brussels. IEA Network of CCS Regulators The launch meeting for this network was held in Paris on the 13-14 May 2008. IEA GHG has liaised with IEA to ensure that the network complements without duplicating IEA GHG activities in this area. A report on the outcomes of this network will be given in paper GHG/08/53. EPRI IEA GHG is collaborating with EPRI to develop updated technical and economic assessment criteria and to expand them to cover a range of countries worldwide. This work is part of IEA GHG’s on-going activity to assess the relative merits of GHG abatement options. EPRI has been undertaking related work for the Australian government and EPRI is seeking formal agreement to enable it to include some of the output from that work in its report for IEA GHG. A draft final report from EPRI is expected to be received shortly. CO2GeoNet. IEA GHG and CO2GeoNet have agreed to co-operate on areas of common interest under a memorandum of understanding, a draft of which is attached for member’s reference in Appendix 1. As part of this agreement, CO2GeoNet will support the summer school activity through the supply of technical experts and IEA GHG will help disseminate information from them using its existing communication vehicles. DG Tren. The European Commission DG TREN has issued a call for tenders to establish and operate a network for the CCS demonstration projects in Europe. A key element of this proposed network is to share the learning from the projects, both within Europe and to other regions. As such, it could provide a significant future element of the ongoing IEA GHG activity “What have we learnt to date (from large scale CCS projects)” (GHG/08/15). Therefore it is considered beneficial to coordinate between the IEA GHG’s international learning activities and this EU network. IEA GHG were approached by three consortia preparing bids to EC DG TREN seeking our involvement, recognising IEA GHG’s interests and qualifications in this area. Because we see the benefits working both ways, we have offered non-binding ‘Collaboration Agreements’ to all three consortia for our involvement without taking payment or being contractually obliged. Papers/Presentations The table overleaf provides a list of papers presented and presentations made at external conferences and workshops since the last meeting. If members wish, copies of these presentations can be placed on the member’s pages on the Programme web site for future reference.

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Date Venue Title Programme Team

Member May 5th to 8th 2008 7th Annual Carbon Capture and

Sequestration Conference Pittsburgh, USA

European Large Scale Demonstration Projects General Manager

7th May 2008 Work shop on Oxy fuel combustion, Institute of Physics, Leeds UK

Oxy fuel R&D Topics – issues to be addressed Stanley Santos

13-14 May 2008 IEA CCS Regulators Network, IEA Paris

International legal and regulatory developments, and principles for established for CCS.

Tim Dixon

14th May 2008 CIAB Associates Meeting, Beijing China

Overview of IEA GHG Programme (Given over telephone) General Manager

12th June 2008 29th AIChE Colloquim, Advancing Kyoto, The Hague, the Netherlands

Current Status and developments in CO2 capture Technology Stanley Santos

18th to 20th June 2008 WPFF, Seoul, Korea Update of activities of IEA GHG Programme Tim Dixon 24th to 25th June 2008 PPC Seminar of Status of CCS, Athens,

Greece 1. The role of CCS as a climate change mitigation option,

Energy technology perspectives 2. The International Energy Agency &

The IEA Greenhouse Gas R&D ProgrammeAn Overview

3. Barriers To The Implementation of CCS 4. International Policy and Regulatory Developments on CCS

Building the Legal Framework 5. International Activities on CCS

General Manager

29th June to 3rd July 2008

19th World Petroleum Congress, Madrid, Spain

Oil and Gas Fields: an Opportunity for CO2 Storage or not? Neil Wildgust

30th June to 1st July 2008

Conference on CCS in a low carbon energy future, The Hague, The Netherlands

The IEA Greenhouse Gas R&D ProgrammeFacilitating CCS research, development, demonstration and dissemination

Mike Haines

9th to 11th July 2008 CSLF Capacity Building Workshop, Mexico City, Mexico

An Overview of CO2 Capture Technology – the Challenges Ahead

Stanley Santos

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9th to 12th September 2008

2nd Petrobras International Seminar of CCS, Salvador, Brazil

1. IEA GHG International Research Networks on Geological Storage

2. Capture Ready – from concept to Implementation 3. Coal for Power World Wide

and the work of IEA CCC (Given on behalf of John Topper)

General Manager

1. International Legal & Regulatory Developments for CCS 2. Transportation of CO2 – Legal Safety and Economic

Considerations

Tim Dixon

Status and Costs for CO2 Capture in Power Generation Kelly Thambimuthu/John Davison

30th September 2008 EAGE, Budapest, Hungary Results from the IEA GHG International Research Network on Wellbore integrity

Neil Wildgust

30th September -1st October 2008

IEA NEET workshop, Moscow, Russia An overview of the IEA Greenhouse Gas R&D Programme John Topper

1st to 2nd October 2008 ScanREF Conference, Oslo, Norway International Developments in CCS General Manager 15th October 2008 CERTH/ISFTA Workshop on CCS on

15th October 2008, Athens, GreeceInternational Status of CCS General Manager

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APPENDIX 1

MEMORANDUM OF UNDERSTANDING ON

Co-operation with CO2GeoNet Association This Memorandum of Understanding (MoU) is signed between: IEA Greenhouse Gas R&D Programme (IEA GHG), Stoke Orchard, Cheltenham, Glos. GL52 7RZ, UK and CO2GeoNet – The European Network of Excellence on Geological Storage of CO2, 3 avenue Claude Guillemin, B.P. 36009, 45060 Orleans Cedex 2, France Herein after referred to as the Parties. Background The IEA Greenhouse Gas R&D Programme (IEA GHG) is a major international collaborative programme undertaking research on greenhouse gas mitigation. IEA GHG members include 10 countries, the European Commission, OPEC and 18 multinational sponsors. IEA GHG is an impartial source of information on technologies capable of achieving deep reductions in greenhouse gas emissions. IEA GHG activities include: • The production of technology and market information on GHG mitigation. • Confidence building by promotion of technology development. • Information dissemination, to Governmental and other policy makers, Industry

Leaders and technology developers, and public audiences such as environmental NGO’s.

• Training of students and young professionals on CCS. CO2GeoNet - the European Network of Excellence on the geological storage of CO2 is a scientific Association launched in 2008 under French law, acting as the legal entity on behalf of the founding members of the EC-funded research network (6th Framework Programme). The Association aims to provide a European scientific body on CO2 geological storage, engaged in enabling the safe and efficient deployment of the CO2 capture and storage technology (CCS) for mitigating climate change and ocean acidification. CO2GeoNet activities encompass joint research, training, scientific advice, information and communication on CO2 geological storage. Purpose The purpose of this Memorandum of Understanding is to outline co-operation arrangements between the Parties. The parties agree to collaborate in the following areas: 1 The parties will, through their regular meetings, exchange information on

developments in CCS and provide each other’s members regular updates on their respective activities.

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2 IEA GHG will promote the CO2GeoNet Association’s activities through its quarterly Greenhouse Issues newsletter, through its web site and at international conferences that it organises. CO2GeoNet will promote IEA GHGs conferences and workshops in a similar manner.

3 IEA GHG will solicit the technical expertise of the CO2GeoNet Association when

undertaking peer reviews of international CCS projects and programmes as and when requested by its members.

4 The CO2GeoNet Association and IEA GHG will co-operate on training activities. In

particular, the Association can support IEA GHG’s international CCS summer school activities through the provision of technical experts, as appropriate.

5 IEA GHG will look to utilise the technical expertise in the CO2GeoNet Association in

the organisation and development of its international research networks on geological storage of CO2.

CO2GeoNet – IEA Greenhouse Gas R&D The European Network of Excellence Programme Nick Riley John Gale President General Manager Date:

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MEMBERS’ ACCOUNTS (FINANCIAL YEAR 2007/8)

A draft set of IEA GHG Members’ Accounts prepared by the accountants, Vantis Plc were tabled at an IEA EPL Board Meeting to be held in June 2008. At that Board Meeting the IEA EPL Statutory Accounts were also tabled for approval. However, at that time the accounts were not approved and have subsequently been reworked by Vantis to take into account the comments received. The IEA EPL Board accounts have now been agreed and the audited IEA GHG members accounts Members’ Accounts are attached for member’s approval. Action Members are invited to approve the member’s accounts for 2007/8

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IEA Greenhouse Gas R&D Programme Directors’ report and accounts

31 March 2008

IEA Greenhouse Gas R&D Programme

Members’ Accounts

31 March 2008

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IEA Greenhouse Gas R&D Programme Directors’ report and accounts

31 March 2008 Accounts Contents Operating Agent’s report 1 Statement of responsibilities of the board of IEA Environmental Projects Limited 2 Independent auditors’ report to the members of IEA Greenhouse Gas R&D Programme 3 Income and expenditure account 4 Balance sheet 5 Notes 6

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Operating Agent’s report IEA Environmental Projects Limited on behalf of the Operating Agents submits the annual report and the accounts for the IEA Greenhouse Gas R&D Programme for the period ended 31 March 2008. Principal activity The IEA Greenhouse Gas R&D Programme, supported by seventeen nations, the European Commission and fifteen industrial sponsors, assesses options for reducing greenhouse gas emissions from the burning of fossil fuels. Programme performance The surplus for the period ended 31 March 2008 amounted to £423,323 (year ended 31 March 2007 surplus of £193,862). IEA Environmental Projects Limited Board members The members of the Board of IEA Environmental Projects Limited as at 31 March 2008 were as follows: Mr J B Lott Dr J M Topper Dr E J Dorward King Auditors The Programme accounts are audited by HLB Vantis Audit Plc on an annual basis to ensure they have been prepared in accordance with Article 6 of the Implementing Agreement together with any specific instructions of the Executive Committee. By order of the Operating Agent Dr J M Topper Managing Director IEA Environmental Projects Limited

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Statement of responsibilities of the board of IEA Environmental Projects Limited The Implementing Agreement for the Programme requires the Operating Agent to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Programme and of any excess or deficit of income over expenditure for that period. In preparing those accounts, the Operating Agent has: • selected suitable accounting policies and then applied them consistently; • made judgements and estimates that are reasonable and prudent; • stated whether applicable accounting standards have been followed, subject to any material

departures disclosed and explained in the accounts; • prepared accounts on the going concern basis unless it is inappropriate to presume that the

project will continue in business. The Operating Agent is responsible under the Rules of the Programme for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Programme and to enable them to ensure that the accounts comply with the Rules of the Programme. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Programme and to prevent and detect fraud and other irregularities.

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Report of the independent auditors to the members of the IEA Greenhouse Gas R&D Programme The financial statements of the IEA Greenhouse Gas R&D Programme for the year ended 31

March 2008 on pages 5 to 7 have been extracted from the financial statements of IEA Environmental Projects Limited. We set out below our report as Independent Auditor to IEA Environmental Projects Limited contained in those financial statements.

“We have audited the financial statements of IEA Environmental Projects Limited for the year ended 31 March 2008 set out on pages 5 to 14. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the directors and auditors The directors' responsibilities for preparing the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors' Responsibilities. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the directors' report is consistent with the financial statements. In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed. We read the directors' report and consider the implications for our report if we become aware of any apparent misstatements within it.

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Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion: • the financial statements give a true and fair view, in accordance with United

Kingdom Generally Accepted Accounting Practice, of the state of the company's affairs as at 31 March 2008 and of its profit for the year then ended;

• the financial statements have been properly prepared in accordance with the Companies Act 1985; and

• the information given in the directors' report is consistent with the financial statements.”

Opinion In our opinion the financial statements of the IEA Greenhouse Gas R&D Programme have been properly extracted and as such reflect the income and expenditure for the year ended 31 March 2008 and the position of the Programme at 31 March 2008. HLB Vantis Audit Plc Chartered Accountants & Registered Auditors The White Cottage 19 West Street EPSOM Surrey KT18 7BS

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Income and expenditure account for the year ended 31 March 2008 Year to

31 March 2008 Year to

31 March 2007 £ £ £ £ Income Funding from partners 1,282,099 1,154,406Interest on bank account 107,024 68,454Other 204,371 30,890 _______ _______ 1,593,494 1,253,750 Expenditure Salaries and staff costs 428,428 330,553 Travel and subsistence 99,325 111,748 Technical studies 301,644 332,841 Communications (including publications)

139,382 85,687

Supplies and services 188,812 147,548 Foreign exchange losses and currency charges

(1,852) 29,625

Bad debts - 12,050 ________ ________ ________ ________ 1,155,739 1,050,052 ________ ________ Excess of income over expenditure for the year

437,755 203,698

Tax provision (14,432) (9,836) ________ ________ Surplus (deficit) for the year 423,323 193,862 ======= ======= Statement of movement on reserves £ £ Opening balance 736,782 542,920Surplus/(deficit) for the year 423,323 193,862Transferred (to)/from commitment provided for programme winding up at 30 November

- -

________ ________ Member contributions not yet committed

1,160,104 736,782

======= =======

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There were no recognised gains or losses in either the current or preceding years other than those disclosed in the income and expenditure account.

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Balance sheet as at 31 March 2008 Notes As at 31 March

2008 As at 31 March

2007 £ £ Current assets Debtors 2 444,711 802,644 Cash at bank and in hand 2,690,124 2,013,670 _________ _________ 3,134,835 2,816,314 Creditors: amounts falling due within one year

3 (1,687,108) (1,796,162)

_________ _________ 1,447,727 1,022,278 Provision for liabilities and charges

4 (287,622) (287,622)

_________ _________ 1,160,105 736,782 ======== ======== Reserves General reserve 1,160,105 736,782 ======= =======

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Notes (forming part of the accounts) 1 Accounting policies Basis of preparation These accounts are prepared in accordance with Article 6 of the Implementing Agreement together with any specific instructions as approved by the Executive Committee. Capital expenditure Capital expenditure incurred in respect of accommodation and equipment is expensed in the year of purchase. Programme completion An extension of the Programme to Phase 5 was agreed by the Members and commenced in November 2004. The estimated costs of completion and winding down of the Programme have been determined and approved by the IEA Environmental Projects Limited Board. 2 Debtors 2008 2007 £ £ Trade debtors 394,547 795,965 Other debtors 24,686 6,679 Prepayments and accrued income 25,478 ________ ________ 444,711 802,644 ======= ======= 3 Creditors: amounts falling due within one year 2008 2007 £ £ Amount due to related parties 194,030 136,235 Other creditors 1,266,303 1,344,361 Corporation tax 18,618 19,011 Accruals and deferred income 208,157 296,555 _______ _______ 1,687,108 1,796,162 ======= ======= 4 Provision for liabilities and charges The provision relates to the IEA Environmental Projects Limited Board’s estimate of the costs required to wind down the Programme if it came to a halt at 31 March 2008. The provision will

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be reviewed annually to ensure it is sufficient. Nevertheless the accounts have been prepared on a going concern basis.

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BUDGET AND CONTRIBUTIONS FOR 2008

Introduction The budget for 2008 as approved at the 33rd ExCo meeting is shown in the left-hand column below. It was prepared on the basis that year-on-year income and expenditure should be essentially in balance. The figures in the right-hand column are the projected budget outcomes for end 2008 derived from the monthly management accounts. The figures in parentheses are percentage completions. At the time of writing this paper 6 months of management accounts were available (from Dec 2007-June 2008). The projected budget out turn is based on expected expenditure to the end of Nov.08

INCOME

2008 Budget (£)

Projected budget outturn (£)

Member subscriptions 1 330 300 1 330 030 (100%) Publications 2 000 0 Interest 107 000

(69,000) 179 260 (167%) Other – sponsorship etc., 121 000 180 830 (149%) Total 1 522 300 1 696 120 (111%) EXPENDITURE Staff and administration costs 514 500 527 890 (103%)

Travel (including facilities for ExCo meetings, conferences, etc.)

150 000 156 650 (104%)

Technical studies and other external contracts

593 500 Conservative: 507 130 (84%) Optimistic: 620,000 (104%)

Research Networks 34 000 68 550 (220%)

Communications (including publications)

95 000 80 120 (85%)

Supplies and services 69 200 70 700 (102%)

Office: rent, rates, service charge, and 1-off move

38 500 37 300 (97%)

Total 1 494 700 C: 1 448 340 (97%) O: 1 573 340 (105%)

DIFFERENCE 27 600 C: 127 920

O: 2,400 Notes: C = conservative scenario O = optimistic scenario

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Comments on Budget Forecast Income Member subscriptions are expected to meet budget targets. By end of June only one member had not paid their annual subscriptions but we are assured that payment is in process. A nominal sum of £2,000 was budgeted for receipts from sales of reports and GHGT conference proceedings. A small number of reports/proceedings have been sold but the income appears under a general heading of recovered expenses in the management accounts. The sum concerned is small and decreasing and in future it is not worth retaining this as a separate line item not maintaining a separate cost centre. Interest is earned on monies on deposit in bank accounts. An incorrect provision was made in the budget presented to members at the 33rd ExCo meeting. The figure for interest earned in the previous year was £10k not £69k as reported. An increase in interest gained is forecast for this year. This has resulted from several changes made to our banking procedures and movement of more monies to interest earning deposits on a monthly basis and more use of longer term deposit accounts. Bank interest rates for short term deposits currently stand at 4.6% whilst longer term deposits (3-6 months) have been available at 5.4% The ‘Other’ income includes recovery of expenses from EC contracts and sponsorship for meetings. It is projected that we will exceed the budgeted amount; this is mainly due to sponsorship money from WCI that came via IEA CCC for the financing meeting which was not originally budgeted for and other smaller increases in sponsorship received. Expenditure Staff costs are slight above budget mainly due to increased use of Debo Adams from IEA CCC for editing the newsletter whilst Andrea Lacey is on maternity leave. The travel budget is generally in line with the budget provision. This line item was increased this year to recognise: the growing size of the Programme, 2 additional members of staff, and inflationary cost increases. Technical studies are our main year-on-year expenditure. The numbers tabled are the amount we have actually paid. I have provided two projections a conservative one and an optimistic scenario. We have a number of studies underway that have experienced delays in delivery for various reasons which we are making best efforts to finish off. In the conservative scenario we will under spend on the budget line item this year, if all these contracts remain delayed. If however we are able to bring all the studies underway and those that are delayed to closure and pay the invoices as well by the year end we will be largely on target. In reality if we had an audited accounts at the end of the operating year as per the tax year then we would accrue the delayed contracts and they would be accounted for in the end of year budget anyway. We are projected to overspend on the Research Networks line item. This is due to two issues, first that we undertook two more meetings than were originally budgeted for, the costs for the meeting on finance flowed through IEA GHG’s books and we incurred higher costs on the summer school than we had projected. The higher expenditure than projected on the summer school has been reviewed and we will change our modus operandi for future these meetings to reduce costs. Our budgetary control procedures for all meetings have been changed to increase accountability. The accountants cost centres have been changed to allow individual accounting for meeting costs as separate cost centres. For future budgets this line item will include all meetings, ExCo etc., as well as the research networks for ease of presentation.

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The Communications line item in the budget allowed for printing and distribution of 3 editions of the newsletter “Greenhouse Issues”, 11 electronic reports of technical studies, 2-3 public summary (glossy) reports, 10 information papers, the year 2007 annual report, plus other material. This line item is projected to decrease this year due largely to changes made to procedures to reduce posting requirements and postage weights and the introduction of competitive tendering for printing and mailing services. Supplies and services budget covers office supplies and equipment such as: software and supporting services, insurance, accounting services, and the annual audits of accounts. Computer renewal on a 4 year cycle averaging 3 computers/year is assumed. The costs are projected to be in line with the budget. The costs for office rent etc, are also projected to be in line with the proposed budget. Summary Overall, it appears that the budget will be essentially in balance at the end of the subscription year.

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FINANCIAL/BUDGETARY ISSUES

Financial issues. IEA GHGs practise to date has been to hold all its financial deposits in one bank. With the current economic crisis it is regard that it would be sensible to diversify our assets. To this end IEA GHG have now moved £500k that was on deposit with the Royal Bank of Scotland (RBS) to HSBC bank in the UK. We will continue to monitor the banking situation and make further changes as necessary. Budgetary Issues The operating year for IEA GHG runs from 31st November to 1st December each year. IEA GHG presents members each year with a budget for this period. However the standard accounting year is based around the UK financial/tax year which run from 31st March to 1st April. IEA EPL therefore has a statutory obligation to produce audited accounts for members for this period (see paper GHG/08/36). We therefore duplicate effort by producing two sets of accounts per year, whereas it would be much simpler and less of an administrative effort if we just produced one budget and one set of accounts in line with the UK tax year. This is consistent with way the IEA CCC operates. This simplification was suggested at the IEA EPL board meeting and again by the Accountants at the annual audit. We therefore propose that in future IEA GHG develop for member’s approval only one budget that corresponds with the UK tax year. This budget and the budget outcome would be presented at the spring ExCo meeting each year. If members wish budget progress can be reported at the Autumn ExCo meeting. Action

Members are invited to agree to this change in procedure for reporting annual operating budgets

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WHAT HAVE WE LEARNT TO DATE?

Following the strong support for this study at the 33rd ExCo in Berlin earlier this year the IEA GHG have created a methodology and commenced work on the study. The ExCo wished that the study not only look at the learning from large-scale projects, which is the primary focus of this work, but also the learning from the range of IEA GHG studies. Therefore this work is in two parts, Projects and Studies. Projects. To focus the scope of the study the IEA GHG have chosen to focus the project portion of this study on the learning from operational large-scale pilot, demonstration and commercial CCS projects around the world. This excludes the number of smaller scale pilot projects and lab scale work. The IEA GHG acknowledge that a lot of relevant learning has been gained from these smaller projects and research but the principle was agreed to focus only on these larger projects because they provide unique learning opportunities most relevant to full commercial-scale operation, and such projects are expected to grow in number as the CCS demonstrations projects are developed. To begin with indicative criteria had to be established for what constituted an operational large scale project. The criteria chosen are as follows:

• Will be, or has been operational by the end of 2008, and either:-

• Captures over 10,000 tCO2 per year from a flue gas • Injects over 10,000 tCO2 per year with the purpose of geological storage with monitoring

• Captures over 100,000 tCO2 per year from any source

• Coal-bed storage of over 10,000 tCO2 per year

Note: Commercial C02-EOR is excluded unless there is a monitoring programme to provide learning. Following the definition of the criteria the IEA GHG then performed a full analysis of the IEA GHG Practical R&D Database (see www.co2captureandstorage.info) to compile a list of projects that meet the criteria. Whilst performing this analysis of the database the IEA GHG also looked to update the status of each project and identify which projects overviews require updating. Thus the database was and continues to be updated for these projects. The IEA GHG also analyzed other existing project databases to ensure there were no additional projects that needed adding. Databases reviewed include the CO2CRC project database, the Scottish Centre for Carbon Storage database and the Regional Carbon Sequestration Partnerships. Following this process we have initially identified twenty-six projects in the Practical R&D Database which meet the criteria.

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Bellingham Cogeneration Facility Rangely CO2 Project CASTOR Project Schwarze Pumpe Great Plains Synful Plant SECARB - Tuscaloosa IMC Global Soda Plant Shady Point Power Plant In Salah Sleipner K12-B Snohvit LNG Project Ketzin Project SRCSP - Aneth EOR-Paradox Basin MRCSP - Michigan Basin SRCSP - San Juan Basin Nagaoka Sumitomo Chemicals Plant Otway Basin Project Teapot Dome Test Centre Pembina Cardium Project Warrior Run Power Plant Petronas Fertilizer Plant Weyburn EOR Project Prosint Methanol Plant Zama EOR Project

The next stage was preparation of a questionnaire to be circulated to gather the key information required about each project. The questionnaire was in five Parts. Parts 1-4 seek are the basic information on the project, with Part 5 focusing on the learning aspects from the project. The questionnaire is seen as an initial information gathering process which will be followed up by further more detailed investigation. The questionnaire however will provide the IEA GHG with the core information about the project and should begin to demonstrate the key learning from projects and gaps that exist in the current project portfolio. We also identified key contact people for each project. The questionnaires have been sent to the key contacts in each project with responses due by the 24th of October. Once responses have been received the information will be internally reviewed by IEA GHG to extract an overview of the learning being gained, and this will be written up as a synthesis report on the results, including highlighting gaps. Following this, the option exists to look in more detail at specific areas. The IEA GHG see the updating of this information as an ongoing activity every 2-4 years, and with other activities, leading to a global network of learning from large scale CCS projects. Studies A review was undertaken in-house of recent IEA GHG studies relating to geological storage. This has been drafted into a report which summarises key learning points from ten IEA GHG studies on CO2 storage, completed between February 2005 and September 2008. It was found that IEA GHG study reports represent a considerable body of knowledge on CCS, and recent (post 2004) study reports have contributed significantly to knowledge of various aspects of storage activities. Recent studies have provided reports that serve as reference documents for key aspects of CO2 storage science including saline aquifer storage, regional storage capacity in North America, Europe and India, storage economics, environmental impact and risk assessment, and remediation options for seepage. IEA GHG studies have identified significant knowledge gaps and priority areas of future R&D for CO2 storage projects, these are considered to include:

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• Consistent global approach to methodology for capacity estimation and storage coefficients; • Improved regional estimates for Africa, Latin America and Asia (excluding China and Japan); • Addition of representative range of case studies to aquifer storage best practice manuals; • Combining best practice and site characterisation manuals; • Creation of best practice manuals for other storage scenarios – depleted gas fields, CO2-EOR and

ECBM. • Improvement of cost-effective monitoring strategies, including new techniques; • Additional monitoring and verification data from injection projects. • Improve long term modelling of geological storage, with improved understanding of geochemical

processes; • Quantification of potential leakage rates for storage sites; • Probabilistic quantification of impacts; • Balancing climate change mitigation against negative local impacts; • Health impacts of CO2 release with/without impurities – especially long term effects and

thresholds; • Management of liability; • Acceptable CO2 levels for various ecosystems.

Current and future IEA GHG studies will continue to seek to address these areas, in conjunction with the work of the international research networks. However, as noted in the recent study report on aquifer storage, geological storage of CO2 can be successfully and safely applied today, as shown in various pilot and commercial demonstration projects around the world. Moreover, progress on areas of priority R&D requires, to a large extent, data from an increased number of large scale storage operations. A review will commence in-house of recent IEA GHG studies relating to capture and transport next. The two reviews will then be compiled into a single report for members to review. European CCS Demonstration Network The European Commission DG TREN have issued a call for tenders to establish and operate a network for the CCS demonstration projects in Europe. A key element of this proposed network is to share the learning from the projects, both within Europe and to other regions. As such, it could provide a significant future element of this IEA GHG activity “What have we learnt to date”. Therefore it is considered that it would be beneficial to coordinate between the IEA GHG’s international learning activities and this EU network. IEA GHG were approached by three consortia preparing bids to EC DG TREN seeking our involvement, recognising IEA GHG’s interests and qualifications in this area. Because we see the benefits working both ways, we have offered non-binding ‘Collaboration Agreements’ to all three consortia for our involvement without taking payment or being contractually involved or obliged.

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ANALOGUES FOR CCS

It was agreed at the last ExCo (33rd, Berlin, Germany) to proceed with the production of a report to collate the information from various sources on natural accumulations of CO2. Various reports and published literature are available from groups working on this topic in the USA, Europe and Australia. However, no group has yet attempted to bring this information together and tease out the key messages that can be conveyed. The study will produce a concise report on the state of knowledge on natural CO2 accumulations and compare this to engineered CO2 storage sites. A glossy report for general dissemination would be produced from the study. The contract was awarded to Monitor Scientific, USA to prepare and write this report. A draft version was circulated to peer reviewers and comments received. It is planned to finalise and publish in time for use at GHGT9, and copies will be made available in time for the 34th ExCo. The study found that evidence in the form of natural and industrial analogues can be used to show that geological storage of CO2 can be carried out effectively and safely. Thus, over the past decade, several studies have been carried out involving natural and industrial analogues and what aspects can provide useful information for geological CO2 storage. Based on these studies, a number of conclusions can be made concerning CO2 storage. The glossy report presents these as key messages, as follows: • CAN CO2 BE STORED SUCCESSFULLY IN THE DEEP SUBSURFACE?

YES. Natural accumulations of CO2 exist throughout the world, some without any evidence of leakage, indicating that containment is both possible and commonplace.

• WHERE CAN CO2 BE STORED (GEOLOGICALLY)? The most suitable target formations for geological CO2 storage are depleted oil or gas fields, deep saline aquifers (potentially greatest volume of CO2 stored), and unminable coal seams. Based on the evidence in terms of the widespread distribution of natural CO2-rich fields in sedimentary basins, large sedimentary basins in geologically stable regions of the world are the most suitable places for storage sites. The locations of the numerous hydrocarbon fields throughout the world also testify to this. In addition, natural CO2 accumulations can be found in regions that exhibit some geological instability, provided the geological setting is conducive to containment. By contrast, the presence of natural accumulations of CO2 in which leakage has occurred has demonstrated certain geological features that should be avoided.

• CAN THE INJECTED CO2 REMAIN UNDERGROUND? YES. A number of mechanisms can act, independently or in sequence, to keep CO2 underground. The primary trapping mechanisms that act initially (after CO2 injection) are the same as those associated with hydrocarbon deposits, in particular physical (structural and stratigraphic) and hydrodynamic trapping. By analogy to hydrocarbon accumulations, CO2 can remain underground for many thousands of years.

• CAN CO2 IN SUBSURFACE STORAGE SITES LEAK TO THE SURFACE? Studies of natural CO2 accumulations indicate that many sites provide effective containment, while others do exhibit leakage. However, comparison of the geological features of both types of

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accumulations helps to identify those features that are likely to lead to leakage and, therefore, to be avoided.

• CAN CO2 REACT WITH THE ROCKS/MINERALS IT IS IN CONTACT WITH? YES. When CO2 dissolves in formation waters, the resulting weakly-acidic solution can react with other water constituents as well as minerals in contact with the freshly-altered water. Depending on the reactions that subsequently take place between the water and the mineral constituents of the storage reservoir and/or cap rock, dissolution or precipitation of minerals can occur, with possible changes to the pore volume. This can be beneficial or harmful. However, our geochemical knowledge supported by field experience associated with natural accumulations has increased our understanding of what reactions can occur, and, therefore, what minerals are favourable and which are unsuitable. Geochemical characterisation of a site can provide the necessary information on mineral assemblages.

• IS GEOLOGICAL CO2 STORAGE SAFE? YES. Natural CO2 accumulations throughout the world testify to the ability of specific geological settings to provide effective containment for CO2. Provided sites are adequately characterized, the key geological features for effective and safe storage can be identified: geologically stable setting, porous reservoir, adequate seal in terms of a thick cap rock extending over the entire reservoir and beyond, ideally with one or more secondary seals above the primary seal, lack of faults and fracture zones in the vicinity, rock minerals that are non-reactive or lead to mineral trapping.

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MARKET EFFECTS OF CCS IN CDM

Introduction It was agreed at the last ExCo (33rd Berlin, Germany) to proceed with this study into the effects of CCS being included in the CDM, after circulating the proposal to ExCo members for comments. This was done, and the study was initiated so as to be in time for the UNFCCC meeting in Poznan in December 2008. Study scope The study started from the results and assumptions of the IEA and ECN reports on CDM and performed a bottom-up assessment of the actual near-term potential uptake of CCS in the CDM, including CCS associated with sources of CO2 omitted from previous studies such as natural gas processing, refineries, ammonia production, LNG production, hydrogen and ethanol production, as well as from coal power plants, cement production and alternative fossil fuel power stations. The study focused on the first and second Kyoto periods, i.e. from 2008 until 2020. A set of practical scenarios based on real CCS development predictions were then established, with low, medium, and high uptake scenarios created. The study addressed:

• How many projects are likely to be developed before 2020? • What type of project they will be? • How big the projects will be in terms of CO2 avoided? • When the projects are likely to come online, and how long they will operate for? • What cost/price the CO2 credits generated from the projects are likely to be? These results must

then be compared to the predicted growth of the CDM market and price of CDM credits to assess what impact CCS will have on CO2 credit supply and ultimately credit price. Data should also be provided on the total CO2 emissions reductions resulting from CCS under the CDM.

Following a competitive tender, in which two proposal were received, the contract for this study was awarded to ERM. At the time of preparing this ExCo paper, a draft report has been received, and will be sent out for peer review. Because the report has not yet been peer reviewed, only a brief summary of results is provided here, and the quantitative values have been omitted until peer review of costing assumptions etc, is complete The work and draft report have provided the technical potential and a more realistic potential for CCS in the CDM, under each of the scenarios, and determined its effect on the CDM market. The conclusions are that CCS can be competitive with other CDM technologies in a few niche applications, in particular in natural gas processing activities, in the near and medium term. There is little evidence in this research to suggest CCS will flood the CDM market in either the near or medium term, or serve to crowd out other technologies. Rather, it will compete with the full range of cost effective mitigation technologies, and also serve to mitigate emissions that presently are emitted to the atmosphere without any real alternative to their cessation i.e. natural gas processing emissions. However, there is scope to proceed with caution if fears over market impact continue. This can potentially be achieved by adopting the option for a CCS CDM pilot phase, as proposed by the EU, most probably through the capping of a maximum tonnage of CO2. The key final results, including quantitative values, will be presented at the ExCo.

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FUEL CELLS FOR COMBINED HEAT AND POWER

This study has now been completed, it was undertaken for by Systems Analysis and Technology Evaluation (STE) Department of the Institute of Energy Research (IEF) at the ForschungZentrumJulich, Germany. The overview was sent out to members for comment in August 2008. No comments were received and the report will be published shortly. For members reference the overview is attached.

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REDUCTION OF GREENHOUSE GAS EMISSIONS THROUGH USE OF FUEL CELLS PRODUCING COMBINED HEAT AND POWER

Background

Combined heat and power systems (CHP) enable users to operate with increased overall efficiency thus reducing consumption of fossil fuels and green house gas emissions. This study investigates the potential of fuel cell based CHP systems in domestic and small commercial applications to reduce green house gas emissions. Fuel cells in this application have advantages of very low emissions and potentially higher power to heat ratios than other CHP systems.

Study approach

The study was undertaken by the Systems Analysis and Technology Evaluation (STE) Department of the Institute of Energy Research (IEF) at the ForschungZentrum Julich, Germany. The recent trends in energy consumption and CO2 emissions for the EU 251 in the industry, residential and commercial sectors were first analysed to get a good understanding of the baseline situation and the typical energy consumption trends in developed countries. The main part of the study consisted of four steps. Firstly, the characteristics of all types of CHP systems on or moving to the worldwide market including those based on fuel cell technology were researched and documented. In the second part the characteristics of heat and power consumption in houses were analysed for three climatic zones; cold, temperature and warm. This analysis was based on both a top down and bottom up approach. In the latter, estimates of heat consumption were made based on the size and insulation standards of typical housing units and then compared with the overall consumption of energy for heating in the sector as a validity check. The third step was to analyse the moment to moment consumption patterns of heat and electricity in order to estimate how fuel cell and other CHP systems would perform in practice. This information was then used to calculate the emission savings which could be made when fuel cell and other CHP systems were applied in place of the conventional system of supplying centrally generated electric power for the electrical loads and gas for heating and hot water. In the fourth and final step assessments were made of how great the uptake of fuel cell CHP systems to 2050 would be and hence what overall contribution they could make to greenhouse gas emission reduction. The potential of the fuel cell systems was then compared with other CHP alternatives. The work was largely based on European energy and building statistics but is considered generally applicable to OECD countries. The full analysis was not extended to the commercial/industrial sector due to lack of readily available information on the diverse applications in this sector.

Results and Discussion Trends in energy consumption and emissions Figures for energy consumption in the EU 25 as published by EUROSTAT 20072 were reviewed in order to understand the basic trends in the industrial, residential and commercial sectors. In the period 1990 -2004 overall energy consumption in the 25 countries which now make up the EU rose by 7.6% but the residential sector climbed by 15% and the commercial sector by 29%. There was also a considerable switch to gas in the residential sector and significant increases in electricity consumption which was up by 31%. Likewise, the commercial sector in the EU shows 1 EU 25 are the 15 original countries in the European Union plus the 10 countries who recently accessed. 2 EUROSTAT is the Organisation which produces and publishes official statistics for the European Union

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a similar pattern of significant increase with the clean fuels electricity and gas gaining significant market share. The ratio between electricity and power consumption is a key parameter when considering the potential of CHP systems in the EU. Also of importance in assessing the contribution to emission reductions is the baseline emission characteristics with which the technology will compete. For the EU25 statistics the average figures for electricity and thermal energy production are calculated using emission factors for the average EU fuel and energy mixes in 2004 and were electrical 0.35kgCO2/kWhel and thermal 0.37 kgCO2/kWhth Charts showing all of the trends are to be found in the main report. The advantages of CHP Combined heat and power (CHP) means the simultaneous generation of thermal and electrical power in one system. In comparison to separate generation of heat in a domestic heating system and drawing of electricity from the public electricity grid, CHP-systems have the potential to save primary energy. The main reason for this energy saving potential is the use of the waste heat which is normally rejected by thermal energy conversion systems. For small decentralized CHP-systems (often termed micro-CHP), avoiding network losses is an additional positive aspect. Figure 1 below illustrates the potential savings in primary energy when the requirements are 1 unit of electrical power to 2 of thermal energy. The conventional system in this case uses 53% more primary energy based on typical central power generation and transmission with 35% efficiency. Even if the electricity system efficiency is pushed up to 50% the conventional system would use 27% more primary energy.

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Survey of available micro CHP technologies Micro CHP systems have been developed based on electricity generation using at least 5 methods listed below. Examples of the characteristics of systems based on all of these apart from the organic Rankine cycle were obtained and selected data from the range of available systems was subsequently used in the estimation of abatement potential. The number of specific designs for which data was collected is shown in brackets.

• Fuel cells (20) o Alkaline (1) o Proton exchange membrane (PEM) (7) o Solid oxide (SOFC) (5)

Figure 1 Comparison of Conventional and CHP system energy balance

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o Molten carbonate (4) o Phosphoric acid (3)

• Internal combustion engines (3) • Stirling engines (4) • Micro gas turbines (5) • Organic Rankine Cycle (No commercial examples found)

The models investigated were as follows: (Note: more extensive details of their characteristics and performance and pictures of the units are to be found in the main report) Intensys produce the PULSAR-6 alkaline fuel cell with an electrical capacity of 6Kwe The 7 PEM fuel cells reviewed range in capacity from 1 to 5Kwe and are made by the following manufacturers:- Vaillant-PlugPower 5Kwe Inhouse 4000 4Kwe Viessmann - HEVA II 2Kwe Baxi Innotech -Beta 1.5 1Kwe Matsushita Electric Industrial 1Kwe Toyota-Aisin 1Kwe The 5 SOFC systems reviewed are all small capacity:- Ceramic Fuel Cell Ltd NetGenPlus 1Kwe Hexis -Galileo 1000N 1Kwe Acumetrics-AHEAD 1Kwe MTS/Elco/Acumetrics 1Kwe Kyocera/Osaka Gas 0.7Kwe These PEM and SOFC fuel cell based systems listed above are the main contenders for the domestic CHP market. The main competitor at this power output level is the Sterling engine based CHP system of which 3 examples investigated. Whispergen Mk5 1Kwe Gas fired Solo Stirling 161 2 – 9.5Kwe Gas fired Sunmachine 1.3-3Kwe Wood pellets Reciprocating internal combustion engine systems are also available with outputs suitable for the domestic market:- Senertec (Baxi) –DachsSEplus 5 - 5.5 Kwe PowerPlus Technologies (Vaillant) Ecopower 1.3 - 4.7 Kwe Honda -GE160V 1 Kwe Molten carbonate (MCFC) and phosphoric acid fuel cells (PAFC) are also available but the commercially available units are larger in size and are more suited to the small commercial CHP market. Finally a number of systems based on micro gas turbines are available in the larger capacity ranges. These were not used in the detailed analysis of abatement potential and their characteristics are listed in the main report. Heat and power demand in the domestic sector Heat demand

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The heat and power demand was analysed for two types of dwelling, single family houses and multi family housing units in which a heating system is shared, for example in a block of flats or a terrace of houses. Using a “bottom up” approach the heat requirements over the year were estimated for a “standard” single family house using data on the areas of walls roof and windows and insulation coefficients taken from the applicable standards. These calculations were made for three different climatic zones based on the “heating degree days” profiles for three representative countries namely Finland (cold), Germany (moderate) and Greece (warm). This resulted in typical heating load curves as shown in Figure 2.

The validity of this approach was checked by doing a “top down” calculation which uses total thermal energy demand for the countries concerned combined with information on the number of houses and the split between single and multifamily. Comparison of the results from this approach showed agreement to within roughly 13-16%, the bottom up estimates being consistently higher. Over time the heat demand in houses is expected to change. A major effect will be the rapidly improving standards of insulation in new houses. Figure 3 illustrates the changes which have occurred historically and the very low heat losses per unit area of a house which are expected to be reachable in the future. There is a balancing trend however towards having an increasingly large amount of the living space per house heated. There is evidence that floor areas of newer houses are slowly declining but the effect of increased area heated applies to the whole of the housing stock. The net result is a slight increase of expected heat demand per house over time.

Figure 2. Heat demand single family house from bottom up analysis for 3 climatic regions

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Electrical demand The overall performance of a CHP system is very dependent on the balance between the electrical and thermal power demands. For domestic housing the electrical load varies considerably as shown in the example in Figure 4 below which is based on measurements every 15 minutes. Notice that for the aggregate of 83 units in a multi-family house the load is more evenly spread. Because electricity is difficult and expensive to store any calculations on CHP in the domestic application should ideally be based on much more frequent data on the electrical consumption. The researchers found a severe lack of such short time scale data. An example for one single family house in which power was measured every 10 seconds was found and data from this source was used to simulate electrical consumption using a random simulation model. Such data would be important for a power led CHP system. However for the calculations of CO2 abatement potential a heat lead system is adopted and a small hot water storage is included which has the effect of smoothing out the heat production from the CHP system. Surplus electricity is exported to the grid. Based on typical heat and electrical load profiles the operating hours of the chosen systems were calculated

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Figure 3 Trends in insulation standards

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including details of the requirements to stop and start and to use a peak burner for any shortfall in thermal output. Emission reductions and costs per unit General parameters Based on the heat demand for typical single and multi-house units the annual emission reduction and emission reduction costs for these units are calculated. The results of these calculations are dependent on a number of parameters which are expected to change over time. For example the emissions of CO2 for grid produced electricity, the cost of its production, the cost of micro CHP systems are all expected to change in the period up to 2050. Figure 5 which is based on data from the IEA for the OECD region shows the changes expected in these parameters compared to a base year 2010. The parameters are incorporated into the overall model to calculate emission reductions and costs. Fuel cell performance The average performance of SOFC and PEM fuel cells currently available is shown in the left hand side of the table below. It is expected that these values will be significantly improved by the time the devices enter the mass market and in the columns on the right show the values assumed for the calculation future emission abatement potential. Note in particular the significantly higher electrical efficiency of the SOFC and somewhat improved overall efficiency of the PEM fuel cells.

Current average efficiency [%] Efficiency for calculations

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PEMFC 29.7 44.1 73.9 30 50 80 The calculation of relative performance per unit for different types of fuel cell CHP as compared

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Figure 5 How key parameters are expected to vary with time

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to competing systems is shown in the following charts (Figures 6 & 7). The results are shown for periods 10 years apart from 2010 to 2050. For the multi family house the comparison is made between a CHP based on an internal combustion engine and a low temperature PEM. For the single family house the comparison is between a Sterling engine type CHP a SOFC and a PEFC. In all cases but one there is a slight increase with time as a result of the scenario assumptions. In the case of the PEFC in a single family house there is a slight decrease in savings in later decades because improvements in the reference grid electricity emission factor start to outweigh the benefits from the relatively small amount of CHP electricity which this type of unit produces.

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The corresponding chart (Figure 6) for the avoidance costs shows that economies of scale play a significant role so that the abatement costs for multi-family houses are much lower or negative than for single family houses. Also the relatively high cost of very small fuel cell systems makes for rather high avoidance costs. All of the above figures are based on the assumption that starting and stopping the units does not affect their assumed overall efficiency. Because of the high operating temperature some restrictions were brought in for the SOFC system so that in the simulation the unit could not be restarted for some hours after a shutdown. It is evident that unless there can be major cost breakthroughs the fuel cell systems are at a serious cost disadvantage compared to competing CHP systems based on Sterling engines.

Figure 6 Abatement potential of various CHP systems per housing unit

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Market penetration In order to build up full scenarios for which abatement costs and amounts can be calculated it is necessary to make estimates of the number and capacity of fuel cell CHP systems which will be sold into the market. The study uses results for a market survey of heating appliances for the world market made by Bosch Thermotechnik GmbH in 2006.3 This makes projections as to the total market and also the make up of that market. After examining information from manufacturers on progress with the development of fuel cell micro CHP systems it was considered reasonable to expect significant market entry in the OECD by about 2014. Considering the breakdown of the market and the competitiveness of other systems two cases for market penetration were selected, a low case of just 5% and a high case of 20%. A standard logistic function was used to assess the trajectory of the penetration. This was calibrated so that full market share was reached by 2030 being achieved by an initial exponential rise followed by a levelling off which is typical of such markets. Post 2030 the technology was assumed to maintain a constant share of the total market which continues to grow steadily through to 2050. The trajectories are illustrated in Figure 8.

3 BBT (2006) Marktreport 2006 - Energie effizienter nutzen. BBT Thermotechnik GmbH, Bosch Gruppe. www.bosch-thermotechnik.de/sixcms/detail.php?id=2326456, 2006

Figure 7 Cost per ton of CO2 abatement using various CHP systems

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Overall abatement potential Having established all these conditions the total potential for the OECD market was estimated. This is considered to be the realistic extent of the market with capability to adequately support deployment of this technology for domestic consumers. Under these assumptions the CO2 reduction from the deployment of Fuel Cell Heating Appliances in the residential sector can reach between 14 to over 50 million tonnes of CO2 per year by 2050. The trend in this potential is illustrated in Figure 9. To put this amount in perspective it should be noted that this corresponds to a reduction of emissions of between 1% and 4 % of the emissions in the residential sector of the OECD. Whilst significant this is a relatively modest contribution and is rather sensitive to the key parameters on which the scenario calculations are based. For consideration of different climatic zones in the OECD an arithmetic average system for the warm, moderate and cold zone was used. The CO2 avoidance of the systems to the reference is calculated for the OECD mix of power plants with average emissions for grid electricity derived from IEA data4.

Expert Reviewers Comments The expert reviewers found the report to be detailed and thorough. Some were concerned about the rather small potential emission reductions which were calculated and felt that the assumption of a purely heat lead system was too restrictive and that better results might result if better use was made of the electrical capacity. On the other hand another reviewer commented that the reduction figures for Sterling engine CHP found from practical tests were much lower than the predictions in this report. The reason was considered to be that the overall efficiency of such micro CHP systems is considerably reduced in practice by frequent stops and starts. Thus results based on performance information for steady state operation could be seriously misleading. The same reviewer also commented that the need to have a hot water storage tank to smooth out the thermal heat production was a serious disadvantage in the domestic market place where space in domestic properties is at a great premium. This could render the assumptions for future market penetration rather optimistic.

4 IEA Energy Technology perspectives 2006, Scenarios & Strategies to 2050. OECD. www.iea.org. IEA World Energy Outlook 2006. OECD/IEA.

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It was commented that the insulation standards chosen for analysis of heating requirements in the moderate and cold regions were rather stringent compared to what might be typical in the OECD. Also, that the heat insulation calculations had not taken account of heat losses due to ventilation which can be significant. A more sophisticated calculation of heat loads for typical housing units would be possible but ultimately when totalised this has to agree with measured total actual residential consumption figures. It is on these latter figures on which the projected savings are based. Reviewers also cautioned that consumer behaviour might work to reduce the calculated emission cuts since the availability of cheaper heat after a CHP system was installed would encourage its more profligate use. There was general disappointment that fuel cell CHP systems seemed to offer so little potential for reduction of emissions but also acceptance that there were good reasons for this conclusion. It was also noted that the natural gas system might need to be significantly extended to supply the energy needed for distributed generation of electricity and given the limited emission reduction potential a better option would be to go for central decarbonisation with distribution of either hydrogen or more electricity. It was commented that fuel cells might come into their own if there was a hydrogen distribution system. However consideration of such a change in infrastructure was beyond the scope of this report. Reviewers also commented that the report had not been able to make predictions for the reduction potential in the commercial facility market. This shortcoming is recognised but the sector is considered to be much more diverse that a convincing estimate of potential emission reductions would require a much more extensive survey of the opportunities, which could not be undertaken with the resources available for this study.

Conclusions The main conclusion is that fuel cell CHP systems can only be expected to make a small contribution to emissions reductions in the domestic housing energy market in the future. Their potential contribution is very sensitive to the carbon intensity of the electrical power supply and if this decarbonises substantially would eliminate any of the advantages for domestic CHP systems consuming natural gas.. Fuel cell CHP systems still suffer from high projected costs compared to competing CHP systems and unless this disadvantage can be effectively addressed they will struggle in the cost sensitive domestic market place. The report has not looked at the potential for fuel cell CHP were centrally produced hydrogen to become widely available. This would tend to improve their performance relative to competing systems. However analysis of this type of system would require development of rather speculative scenarios involving a shift to a hydrogen economy. There would be potential competition from a clean electricity based economy perhaps involving more extensive use of heat pumps which again would be a rather speculative scenario on which to base calculations.

Recommendations It is recommended that no further work is done on analysis of the potential of fuel cell systems to reduce emissions for the time being.

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UPGRADED CALCULATOR FOR CO2 PIPELINE SYSTEMS

The upgrading of the CO2 pipeline calculator has been completed by Gastec UK/AMEC. The upgraded calculator will be delivered to members for use before the ExCo meeting. The overview is attached for members reference. Since this is an upgrade of an existing study the overview will not be distributed to members for comment, but the report will be dispatched in due course for members to use.

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UPGRADED CALCULATOR FOR CO2 PIPELINE SYSTEMS

Background

IEAGHG had a cost calculation computer program for CCS systems developed by Woodhill Engineering1 some years ago. This enabled high level cost estimates to be made of CO2 capture and storage systems and was based on Excel. Within this spreadsheet was a routine for calculating the cost of CO2 trunk lines which was found to have a sizing routine based on oversimplified pressure drop equations and averaged physical properties of CO2. In 2006 a new model, based on another spreadsheet, was developed for sizing and costing distributed CO2 collection networks. This was done as part of the two studies which were undertaken on distributed CO2 capture and collection. It was felt that the CO2 trunk line sizing routine should be improved and that at the same time the pipe network design program should be made available as part of the calculation suite.

Study approach

A contract to develop and upgrade the original Woodhill program and the network program was awarded to Gastec UK/AMEC who had already produced the new network design program. After obtaining the original code from Woodhill Frontier options were examined and it was felt that as both programs were Excel based it would be simplest to amalgamate them into one program using the original Woodhill interface where possible. The possibility of adding a graphical map based interface for the distributed collection network was investigated as an additional option but although possible the necessary license for commercial use was found to be too costly. It was on this basis that Gastec UK/AMEC proceeded with the development of the upgraded calculator.

Results and Discussion

The contractor developed a new pressure drop calculation procedure for CO2 trunk lines segmenting the lines into 40 elements of equal length to account accurately for compressible flow. Calculations are based on turbulent flow with the internal pipe roughness of typical carbon steel line pipe. Tables of the physical properties of pure CO2 (Density and viscosity) are used as the basis for the calculations. The range of valid temperatures and pressures covers from -50 to +75 °C and from 1 bara to maximum 1000bara pressure2. Intermediate values in the tables were obtained by interpolation. Consideration was given to allowing different CO2 purities but this was found to seriously complicate the calculation as a full multi-component physical property routine would have to be acquired and built in. Calculations are based on isothermal conditions with no change in height. Other additional features over the original calculator are a greater choice of terrain types and the ability to set percentages of each type of terrain. It is also possible now to specify 1 Now Woodhill Frontier following a take over 2 Below 0°C max pressure 700bara and below -25°C max pressure 300bar

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the count of road/rail/river crossings which are then taken into account in the cost estimate. The contractor also introduced routines to allow costs to be escalated using any of the four main published industrial construction cost indices, the possibility to calculate costs in different currencies. The ability to adjust costs for different world regions using regional cost factors was retained and extended to the other parts of the model. Because of the intricacy of the original trunk line sizing routines which included sizing/ costing of gas and hydrogen lines the improved sizing/cost routine was added as an option leaving choice of the old less accurate routine intact so that users could still make comparisons with earlier estimates. The user can still use the system to cost complete CCS systems but with the new CO2 pipeline costing routine. Alternatively users can select an option to size and cost CO2 trunk lines individually using a separate input sheet. When used in this mode graphical representations of conditions along the pipeline are displayed. The routine calculates the requirements and costs for booster compression or pumping as did the original model but also now includes metering and block valve costs as well. The last option now available is to design, size and cost low pressure distributed CO2 collection networks. This is a stand alone part of the suite which uses the network design model developed by AMEC/Gastec-UK. Its main application is for the design of systems to gather CO2 from clusters of smaller industrial sources of CO2 Documentation for the calculator is in the form of the original built in help file plus a new guidance document explaining the changes made and how the user can use the additional features.

Expert Reviewer’s Comments . The calculator was checked internally and not subject to formal external review. It is recognised from the internal reviews that the calculator needs to be used by experienced engineers and an AMEC project team has already used the new elements successfully for a major CO2 collection infrastructure project as a test case

Conclusions The revised cost and sizing calculator now allows more accurate high level sizing and costing of CO2 pipelines and collection systems. It is not intended as a final pipeline design tool for which specialist pipeline sizing routines must be used able to cater for terrain height changes and the physical properties of the actual CO2 gas compositions. The tool is now available for use IEA GHG will maintain a log of comments and suggestions from any users so that any errors found can be corrected and useful improvements added if the amount of use and extent of suggestions warrants.

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NOVEL APPROACHES TO IMPROVE THE PERFORMANCE OF CO2 CAPTURE

This study has now been completed, it was undertaken by Innovaro of the UK. The overview has been sent out to members for comment. Any comments were received and those generated during discussion at the ExCo itself will be taken into account before the final report is published. The draft overview of the study is provided for member’s reference.

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NOVEL APPROACHES TO IMPROVING THE PERFORMANCE OF CARBON DIOXIDE CAPTURE

Background

Carbon dioxide capture processes have been studied extensively and a large body of literature is available on this subject. Despite all the research and development work which has been done to date, the costs of CO2 capture remain high and the efficiency of the processes to which it is applied, particularly power generation, are reduced by 6-12 percentage points. The high capital cost of CO2 capture remains a barrier to wide scale implementation of CO2 capture and storage (CCS) but is perhaps less important than the extra costs of operation given the very long lifetimes of major capital facilities such as power plants. Extra operational costs are in part accounted for by extra fuel costs because of efficiency reductions and this particular extra cost is of concern not only because fuel costs might escalate in the long term but also because reliance on fossil fuels is increased at a time when directionally it would be preferable for reliance on fossil fuels to decrease. The IEA Greenhouse Gas R&D Programme (IEA GHG) thus elected to undertake a study search for innovative new avenues for CO2 capture which might lead to significant improvements in the cost of capture technology and reductions in the energy penalty. The brief was to search outside traditional fields of enquiry and break away from a classical Chemical Engineering process based approach.

Study approach

The approach adopted for this study was to identify some leading specialists in innovation and as a first step invite them to set up an innovation process. Key aims were: to develop contacts in other fields of research and development, and to identify some potentially interesting avenues for further investigation. A second step, beyond the scope of this study, would be to follow up on any really promising avenues which might be uncovered. Three companies with experience in innovation were identified and were invited to tender on the basis of a very broad functional scope. A contract was awarded to a relatively small company, Innovaro, whose tender was cost competitive, and had good references from major industrial groups who use their services regularly. The process started with a small workshop between 3 Innovaro staff and 3 IEA GHG staff. This was used to identify a number of themes or “vectors” around which a 24 hour innovation event would be built. To this event a selection of external specialists drawn from diverse backgrounds would be invited along with Innovaro and IEA GHG staff. In addition, the outline of an invitation aimed at encouraging participants interest was drawn up. Also a list of potential participants extracted from Innovaro’s list of contacts was prepared. Prior to the Innovation event a further meeting was held to run through the programme for the event and a thought provoking introduction which would be presented to stimulate and direct the innovation process. The event was held at The Belfry near Birmingham, UK with 12 external participants starting with presentations on the first evening, followed by intensive structured sessions the next day. The ideas and insights emerging from the sessions were captured in part one of the report. This material was reviewed by the three IEA GHG staff who attended the session and was used to draw up a set of insights into areas for further exploration. In total 8 such areas were identified and for each Innovaro suggested that outlines were documented as to:

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• What technologies are involved with examples? • With whom could IEA GHG collaborate to develop the area? • With whom could IEA GHG consult to obtain more understanding of the area? • Who could IEA GHG influence to promote development work to occur on the

technologies involved? The key output of this work is the details of these insights which are discussed below.

Results and Discussion

Participants and their backgrounds The following people attended the workshop at The Belfry. All expressed great interest in the subject area and confirmed that they would welcome further contacts.

Name and company Position/interests Andy Winship – BOC/Linde UK hydrogen solutions business activities. Dave Wardle – Oxford Catalysts Business Development Director Semali Perera – Bath University Senior Lecturer Department of Chemical

Engineering. Research interests include nano- and novel materials

John Hancox – Rolls-Royce Environmental Specialist – Company Strategic response to climate change

Jamie Turner – Lotus Engineering Chief Engineer of Powertrain Research Graham Hillier – CPI New Energy Director - Centre for Process

Innovation. Andy Treen – QinetiQ Business Group Manager - Materials Group Mercedes Maroto Valer – CICCS Professor in Energy Technologies Director

Centre for Innovation in Carbon Capture and Storage (CICCS), Deputy Head of School of Chemical and Environmental Engineering.

George Morris – QinetiQ Technical Director - Energy and Environment Tony Booer – Schlumberger Carbon Services Business Development Manager, Northern

Europe Karl Bindemann – Arup Associate Director - Major Power Projects William Megill – Bath University Lecturer in Biomimetics - Mechanical

Engineering department

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Areas for further exploration The following 8 areas were identified as of interest for further exploration in attempts to improve the overall value of carbon dioxide capture technology. 1. Bundling of CCS as part of a low carbon energy offer to end users The challenge is to see CCS not as a way of delivering low carbon electricity to be bought in preference to conventional power from other sources but as part of an overall low carbon energy offering. The market is seen as divided into domestic, commercial and industrial sectors with quite different options. For domestic consumers the offering might feature delivery of CCS electricity coupled with obligations to install high energy efficiency devices, intelligent remote load control and advantageous buy back price for electricity from domestic CHP or renewable power installations. For commercial customers the offering could be similar with for example automated remote device control for certain fraction of the connected load, assistance with installation of high efficiency appliances and assistance with the installation of local area CHP and power export facilities. For industrial consumers tailored “responsible CCS” which could include obligations to use CHP, possibly running on hydrogen supplied along with the carbon free electricity supply and some on-site CCS for some applications using high temperature absorbent regeneration specifically in situations where a lot of heat is generated or consumed during processing.

2. Better use of oxygen and nitrogen in oxy-combustion processes Current designs for coal fired oxy-combustion capture plant typically require up to 20% excess oxygen to ensure full coal burn out. If operation could be close to stoichiometric there would be significant reductions in the size of the air separation unit (ASU) and the parasitic power required to run it. Two leading options are to recover oxygen from the CO2 clean up vent stream and to burn out residual oxygen with natural gas or hydrogen after the coal burn out zone. This is a near term idea which has already been fed to the oxy-combustion network. Uses for the large amount of very dry nitrogen co-produced by the ASU could also improve the economics of capture. A diligent search for new applications for this nitrogen stream is proposed.

3. Siteing of CCS capture plant Power plants have been sited in the past based on considerations of access to fuel and electricity markets. It became apparent in the workshop that many more factors could be important in choosing a site for a CCS plant because of the need to consider access to CO2 storage as well as opportunities for greater integration of such plants with next generation industrial, commercial and domestic consumers. Matters which might be considered were: What else will be built as well as CCS plants? For example, new processes, new industrial sites and new towns and how this might influence site selection. How the industrial scene will change in typical countries where CCS might be implemented leading to production of an integrated road map from which opportunities for improved CCS plant siteing might be identified? What new technologies that are likely to appear on the scene, such as more nuclear, more desalination, more waste processing and how these might integrate with CCS plants and affect their siteing? 4. Partial mineralisation to lock-up some of the captured CO2

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Once CO2 is readily available from the capture plant it will be relatively easy to react some of it with wastes or other materials to make new products or simply to lock up some CO2. Total mineralization was considered to be unrealistic but there could well be niche applications for example alkaline wastes which could be carbonated thus fixing a small percentage of captured CO2 and possibly forming a more valuable by product or at least reducing waste disposal costs. 5. Bio-systems to create solid carbonates This was essentially a “blue sky” idea based on the observation that there are natural organisms able to convert a supply of CO2 and Calcium ions into solid calcium carbonate structures. It is also related to the previous area. Unlike photosynthetic routes to fixing CO2, the reaction is exothermic and hence represents an energy source amenable to exploitation by natural processes. Seawater itself does not contain significant amounts of calcium ions which would have to come from a geological source which may prove to be a practical limitation. The best examples of the process are formation of corals and the shells of shellfish. The biochemical pathways responsible are as yet not that well characterized and understood. A significant amount of work has been done on chemical routes but so far all tend to have very high energy demands and/or very low reaction rates as well as considerable logistical problems. 6. Better use of bio-mass and other waste co-fired in CCS plant It is increasingly common for fossil fuelled power plants to co-fire biomass and other wastes and this practice is likely to be considered also for fossil fuelled power plants fitted with CCS. It may be possible to produce higher value products from such waste and biomass and co-fire only the residue from the intermediate process. There is an issue with regard to how to monetize the negative emissions of CO2 when biomass is used as a fuel in fossil fuel fired power plants with CCS. Possible technologies to integrate with CCS plants are pyrolysis of biomass to produce hydrocarbon fuels followed by co-firing of the pyrolysis residues and fermentation of biomass to produce bio-gas followed by co-firing of residues. 7. Pre-combustion capture catalyst improvement Catalysts are essential in the pre-combustion capture process for the shift reactions and also for some of the natural gas gasification processes such as steam reforming and catalytic partial oxidation. Better lifetimes and cheaper catalysts would help overall economic performance. In particular, sour shift catalysts which have only recently been developed may benefit from further improvements. Useful aims could be to develop cheaper, longer lifetime shift catalysts able to operate with smaller steam to carbon ratios and improvements in Catalytic Partial Oxidation systems for application to natural gas. 8. Greater use of information flows to improve CO2 capture processes This insight arises from the observation that biological systems appear to achieve very high efficiencies through greater structural complexity which is under pinned by a considerable internal use of information feeding from one element to another. A profitable line of thinking could thus be to examine how information in the broadest sense could be harnessed to improve the performance of capture processes. The car industry is a prime and successful example of this; in particular the advanced engine management systems which have been developed are known to have greatly improved overall efficiency and performance.

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As mentioned for each of these development areas an analysis of which organizations to collaborate with, consult and influence was drawn up. The table below gives an overview of these but more detailed suggestions are included in the main report. Insight Technologies Collaboration Consultation Influence

1. CCS Bundling Remote distant control, Grid export CHP

UC+IND, UC+CHP, UC+CT or ADV

CT or ADV, CHP

UC

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N2 use, drying and EOR; O2 separation; gas over-firing

IGC+UNI, OILCO+OXY-PC

INFRA, IGC, UNI, OILCO

OXY-NET, IGC

3. Siting of capture plants Industry trends CPP+IND IEA, EU, US DOE, BERR

CPP

4. Partial mineralisation Waste survey, CO2 products

RI+IND UNI, ALCAN, ECN

Researchers

5. Bio-systems to create carbonates

Enzymic systems UNI Biotech Depts.

UNI UNI Biotech Depts.

6. Better use of bio-mass in co-firing

Pyrolysis, Fermentation

UC+BCE CPP, IEA, BCE BCE

7. Pre-combustion catalysts improvement

Shift catalysts, CPO catalysts

UC+CAT SGO, CAT CAT

8. Greater use of information flows mimicking bio systems

Sensors and Controls

UC+ACS UC ACS, UC

ECN = Energy Centre Netherlands BERR = UK department of Business Efficiency and Regulatory Reform

CAT = Catalyst Company UNI = University .

Expert reviewer comments The output from the workshop was reviewed by the participants who considered the summary to be a fair and accurate record of the event. It was not deemed appropriate to extend the review beyond those who had taken part.

UC = Utility company (Planning CCS) CT or ADV = Carbon trust or similar advisors CHP = CHP purveyors

IGC= Industrial gas company OILCO = Oil company

OXYNET = Members of oxy-combustion OXY-PC = oxy fuel power company CPP = Central policy & planning

IND = Wider Industry

BCE = Biomass conversion experts SGO = Operators Syngas plants with shift ACS = Advanced control specialists

RI = Research Institute

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Conclusions The wider community proved to have great interest in the topic of CO2 capture but for those not directly involved it was clear that some of the implications of the technology are not fully appreciated. There was a recurring strong interest in photosynthetic processes to capture CO2 which may be because this has been the most widely known example or because it is sensed as being sustainable and green. In furthering developments with the wider scientific and industrial community it will be important to keep focus on “Industrial CO2 capture” and avoid straying into this field. Particularly in any interactions with the bioscience community for example in the field of bio mineralization it will be important to maintain focus away from photo-synthetic processes. An overarching insight when considering the 8 areas which emerged from this work is that systems integration in its widest sense seems to offer the greatest potential for improving the CCS offering. In fact apart from area 7 all others involve an increase in the complexity of the CCS system. Integration is a difficult field in which to work and there is likely to be resistance to the complications which this inevitably brings since these often run counter to the conventional wisdom that simplicity is best. However the management of modern car engines illustrates the advantages which can accrue. These are dramatically more sophisticated than the original single carburettor and fixed ignition timing system and are adding even more ”intelligence” as they start to include multi fuel capability. The gains in efficiency are impressive. Area 8 provides the insight that these gains are perhaps obtained not through complexity but rather through intelligence and use of information. The report includes detailed recommendations as to which organisations to interact with in order to promote further development of the ideas. It is proposed that initially between one and three of the areas are selected for further work and that initial consultations are progressed in order to establish:

• How much merit the area has for further development • How strong the interest of specialists and supporters is • What the next steps to progress in the area should be

It is suggested that a short term, midterm and long term area are selected and that some form of structured selection process is adopted. The easiest area on which to start is area 2, that for reducing the consumption of oxygen in oxy-combustion and finding new uses for the co-produced dry nitrogen. This could bring early success. A second area on which consultation could start is area 6, better use of biomass in fossil fired power plants with CO2 capture plant. This would be very helpful in forging synergies between CCS and renewables. This is likely to lead to tangible results in the midterm. The third area where it might be worthwhile making a start is on biological methods for CO2 mineralisation. Results would be very long term and the main task would be to bring influence to bear to direct some fundamental research in this direction.

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Recommendations

Based on the results of this study IEA GHG should consider further actions initially in the form of groundwork which would lead to further studies in some of the following areas. These have been listed in order of priority.

Eventual study topic Proposed pre-study groundwork Reduction of surplus oxygen requirements for oxy-combustion Capture processes

Consultations with key experts from industrial gas and power companies, one to one and in small one day workshop. Introduction and debate on topic at next oxy-combustion network meeting.

Processes for optimal co-use of biomass in fossil fuel power plants with CCS.

Consultations with biomass process designers/operators to understand key features of processes which produce higher value products so that only part of the biomass is burnt directly.

Options for partial consumption of captured CO2 into useful products

Consultations with universities and research institutes engaged in CO2 reaction chemistry.

System integration and siting considerations in design of power plant CCS projects

Award and substantial completion of the approved studies on integration of post combustion capture processes and development of CO2 transport infrastructure. These will enable better definition of needs and possibilities. Consultations with those planning major CCS plants on siting issues. Consultations with major energy intensive existing and emerging industries and urban planners on general topic of CCS integration opportunities.

Integrated product options for fossil fuel CCS plants

Consultations with power industry to identify and understand additional product aspects such as remote load shedding management, inclusion of consumer device related obligations. Internal “order of magnitude” assessment of potential advantages prior to scoping of study

Use of information systems to improve value of CCS

Initial workshop activity with mostly IEAGHG staff to formulate what this could mean in the CCS context. Consultations with specialists in other industries with a track record in this area to identify information technologies which are being successfully applied.

Uses for nitrogen from oxy-combustion co-produced processes

Consultation, possibly via a questionnaire to a selection of industries, in order to assess level of interest. Engagement of a market research consultant to follow up if sufficient potential is identified.

Performance and development of shift catalysts for use in CCS processes.

Consultations to assess performance of existing catalysts and scope for improvement.

Biologically enhanced routes to mineral carbonation

Such a study could only be undertaken some way in the future on the basis of significant findings from research. Activity at present is to engage in discussion with the appropriate part of the research community to encourage fundamental research in this area. Possibly could be added as a sub topic to the Bio-fixation network but would probably need to engage different members.

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Technical Considerations on the Impact of the CO2 Quality

in the Design and Operation of an Oxy-Fuel Combustion Power Plant with CO2 capture

Introduction There has been an on-going discussion at the Oxy-fuel combustion network meeting regarding the potential impact of CO2 purity. To help take this discussion forward it was considered that there was merit in undertaking a review of the currently available literature on CO2 purity issues to allow for more focused discussion at the next oxy-fuel combustion network meeting. Stanley Santos has therefore undertaken this review on CO2 purity issues which will be presented to members at the 34th ExCo meeting. A draft report on this activity will be distributed to members. Comments received on the draft and those received from the ExCo meeting itself, will be incorporated and the report circulated after the ExCo as a technical review. The report will also be presented at the next oxy-fuel combustion network meeting. Background The specified purity of the captured CO2 is an important design parameter for any oxy-fuel combustion application for power generation with CO2 capture. This requirement could affect the design and engineering of the oxy-fuel process more significantly than the two other leading CO2 capture options for the power generation industry (i.e. post- or pre-combustion capture). The discussion of the requirements with regard to the purity of the CO2 for transport and storage is still an on-going issue. The London Protocol and OSPAR Conventions have adopted the definition of “overwhelmingly CO2”for purity of the CO2 for storage under the seabed. To try and better define the CO2 purity requirements a review of the literature on this topic has been undertaken. However, the review has not provided clear guidelines on the CO2 purity issue. The results of the review are summarized in Table 1. Most of the data available are used in determining the quality of the CO2 for Enhanced Oil Recovery and some bear no clear explanation on how they are derived.

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The composition of the captured CO2 rich flue gas produced from an oxy-fuel fired boiler could vary considerably depending on various factors. These include: (a.) fuel properties and its combustion behaviour; (b.) quality and amount of the flue gas recycled to the boiler - including the location

where it is extracted and how it is recycled back to the boiler; (c.) purity of the oxygen supplied and how the oxygen is distributed within the burner

throat; (d.) level of air ingress; (e.) existence (or non-existence) of any flue gas clean up units. Such variations could significantly impact on the investment and operating cost of the power plant. Considering the design criteria for the flue gas clean up and its subsequent processing with relevance to how the final CO2 quality could be achieved will be based on various aspects:

• Type of demand for the CO2 rich flue gas. (i.e. storage options, requirements for the recycled flue gas),

• Choice of transport options, • Regulatory requirements that define how the captured CO2 would be classified, • Amount of the impurities that would be permitted (driven by regulatory or

operation requirements) • Health and safety considerations, and • Economics

Considering the importance of the CO2 purity issue to the design and operation of the oxy-fuel fired power plant with CO2 capture, the review’s primary purpose was:

Table 1: Tolerance for various impurities of CO2 [Alstom 2007]

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(a.) To provide a systematic assessment of the fate of impurities from the oxy-coal

combustion power plant up to its downstream processes. With the inherent aims of:

• Presenting a general review on the sensitivity of the design and operation of the oxy-coal fired power plant and its effect to the quality of the CO2 rich flue gas prior to its delivery to the CO2 processing and compression train.

• Providing an illustration, via theoretical case studies, of the type and amount of impurities that could be expected from the oxy-coal fired power plant.

• Describe what technology options could be implemented in the CO2 processing

and compression unit and to what level of purity these options could be achieved.

• To discuss the issues identified for specific impurities and how this should impact the oxy-coal combustion power plant and downstream processes and operation.

(b.) To identify areas wherein gaps in knowledge in the understanding of the handling

of the impurities in the captured CO2 from an oxy-fuel fired power plant.

(c.) To examine the status quo and the current understanding on the different impurities and its impact to transport and storage options. Basically, this is a preliminary attempt in identifying the rationale behind the wide ranging numbers reported in the literature as a probable guideline to the CO2 purity.

The review then went on to:

• Provide descriptions of oxy-coal combustion power plant and possible configurations that could impact the quality of the flue gas to be delivered to the CO2 processing unit. Specifically,:

o A presentation of simple case studies presenting the mass balance around

the power island illustrating the impact of air ingress and O2 purity to the composition of the flue gas from the boiler.

o A review on the SOx and NOx emissions from an oxy-coal combustion power plant and the primary removal options (i.e. removal prior to its introduction to the CO2 processing unit).

• Discuss on the fate of SOx and NOx during compression. This is primarily

related to the debate surrounding the secondary removal options for SOx and NOx.

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• Describe the process options available for the CO2 processing unit. This is related to the discussion on the factors that could impact the purification and liquefaction of the CO2 rich product.

• Provide a summary of the Taber’s report discussing the experience related to the

fate of small concentration of O2, SOx and NOx when injected into oil reservoir.

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CO2 CAPTURE IN THE CEMENT INDUSTRY

This study has now been completed and the final report circulated to members. The draft overview of the study is provided for member’s reference.

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IEA GHG OVERVIEW

Background The cement industry is one of the world’s largest industrial sources of CO2 emissions, accounting for 1.8 Gt/y in 2005, i.e. more than 6% of global emissions from the use of fossil fuels. Over the years the cement industry has substantially reduced emissions of CO2 per tonne of cement by improved energy efficiency, replacing fossil fuels with wastes which can sometimes be regarded as ‘carbon neutral’ and by increasing the use of additives in the cement product. The scope for further reductions by these means is becoming limited but there is an increasing need to reduce CO2 emissions to avoid climate change. CO2 capture and storage (CCS) presents one of the few opportunities to make further major reductions in emissions and the industry is currently considering the feasibility of applying this technique in order to plan for the future. In many ways the cement industry represents a good opportunity for CCS, because cement plants are relatively large point sources of CO2, the CO2 concentration in cement plant flue gas is relatively high (about 25mol%, dry basis) and over 60% of total CO2 emissions from a modern cement plant are from mineral decomposition and this CO2 cannot be avoided by use of alternative energy sources. IEA GHG has undertaken a study to assess the technologies that could be used to capture CO2 in cement plants and their performances and costs. The study was undertaken for IEA GHG by Mott MacDonald. The British Cement Association collaborated and helped to obtain input from the cement manufacture and plant supply industries.

Study Description Scope of the study The scope of the study was to:

• Provide descriptions of cement plants and the global cement industry • Review CO2 capture processes that would be suitable for cement plants • Evaluate the performance and economics of cement plants with and without CO2

capture • Discuss retrofitting CO2 capture and CO2 capture ready plants • Identify information gaps and R&D needs

Study basis The technical and economic assessments were based on a new cement plant in the UK producing 1 million tonnes/year of cement (910,000 t/y of clinker), using typical current technology: a dry feed plant with 5 stages of pre-heating. A 3 million t/y plant in Asia using the same technology was assessed as a sensitivity case. The study was based on existing CO2 capture technologies, or technologies that could be developed for use in cement plants in the near future with moderate risk. It should be recognised that further development of technologies may significantly reduce the cost per tonne of CO2 and increase the fraction of CO2 that can be captured. The costs of cement production and CO2 capture were calculated assuming a 10% annual discount rate in constant money values, a 25 year plant life, 90% load factor, a coal price of

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€2.51/GJ (LHV basis) and a petroleum coke price of €2.34/GJ (3.76 and 3.51 US$/GJ respectively1). A full list of the economic criteria used in the study is given in the main report.

1 Based on an exchange rate of 1.5 $/€

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Results and Discussion Cement production Cement is composed of calcium silicates, calcium aluminates and calcium aluminoferrite. It is produced from a mixture of raw materials, principally calcium carbonate. The raw materials are ground and delivered to a kiln where they react at high temperature to form an intermediate ‘clinker’ which is ground together with some gypsum to form cement, the finished product. The various clinker production technologies are described in the main report. Historically clinker production has evolved from wet processes in which raw materials are ground in water, through semi-wet and semi-dry processes to dry processes, in which the raw materials are dried and ground before feeding to preheaters and a kiln. The dry process required less energy than the wet process and thus is generally favoured where its application is feasible. In industrialised countries rotary kilns, which can have capacities of 10,000t/d, are used. Vertical shaft kilns are also used in plants of less than 300t/d, now mainly in India and China, but their use is being phased out because they produce lower quality cement. Global production of cement has grown steadily over many years, reaching about 2,500 million tonnes in 2006. The average growth rate was 5.5% per year during the period 1990 to 2006 and the average rate accelerated to 8.7% per year since 2002. The main growth has been in Asia, and China in particular. China now accounts for almost half of all global cement production. CO2 capture technologies The three main CO2 capture technologies are:

• Post combustion capture, in which CO2 is separated from flue gas. • Pre-combustion capture, in which fuel is reacted with oxygen and steam to

produce a mixture of CO2 and H2, the CO2 is separated and the H2 is used as fuel. • Oxy-combustion, in which fuel is burnt in oxygen instead of air, to produce a flue

gas consisting mainly of CO2. Pre-combustion capture was not evaluated in detail in this study, mainly because it would only be able to capture the fuel-derived CO2, not the larger quantity of CO2 from decomposition of carbonate minerals. Post combustion capture Post combustion capture is a downstream process which would not affect the core of the cement production process. The main additions to the plant would be:

• A CO2 capture plant which includes a solvent scrubber and regenerator • A compressor to increase the pressure of the CO2 product for transport by

pipeline • High efficiency FGD and De-NOx to satisfy the flue gas purity requirements of

the CO2 capture process • A plant to provide the steam required for regeneration of the CO2 capture solvent.

Cement plant flue gas has a relatively high CO2 concentration; typically about 25 mol% compared to about 14% for a coal fired power plant. The post combustion solvent scrubbing processes that are being developed for CO2 capture in coal fired power plants would in principle be suitable for use in cement plants. This study is based on the use of monoethanolamine (MEA) solvent scrubbing, which is a conservative choice. Alternative proprietary solvents with lower steam consumptions are being developed and used, so the sensitivity of costs to a lower energy consumption solvent was assessed. Post-combustion amine scrubbing is widely used in small plants producing up to 400t/d of CO2 for the food, drinks and chemicals industries but scale up to around 3,000t/d would be needed for a 1 Mt/y

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cement plant which included capture of the CO2 produced from an on-site steam generation plant. Post combustion capture produces a high purity CO2 stream, typically 99.9% dry basis. In this study the CO2 is compressed on-site to 11 MPa to enable it to be transported by pipeline to an underground storage site. It was assumed that 85% of the CO2 would be captured, for consistency with IEA GHG’s other studies but information obtained during IEA GHG’s study on post combustion capture at power plants and other published work indicates that 95% capture should be feasible without significantly affecting the cost per tonne of CO2 captured. The CO2 concentration in cement plant flue gas is higher than in power plant flue gas, so similar or greater percentage CO2 capture is expected to be feasible. A major issue for post combustion capture is the supply of low pressure steam for CO2 capture solvent regeneration. In this study the steam is provided by a coal-fired combined heat and power (CHP) plant, which includes high pressure steam generation and a back-pressure steam turbine. The electricity produced by the CHP plant can satisfy all of the electricity demand of the cement and CO2 capture plants and there is a small surplus which is exported. Coal was selected as the CHP plant fuel because most, although not all, cement plants already use coal. The flue gases from the CHP and cement plants are combined and fed to the CO2 capture plant. Oxy-combustion In an oxy-combustion plant fuel is combusted in oxygen, produced in a cryogenic air separation unit, and some CO2-rich flue gas is recycled to control the flame temperature. The flue gas with a CO2 concentration of about 80 mol% (dry basis) is purified to 95% CO2 in a relatively simple cryogenic separation unit during compression. Higher purities can be achieved if necessary by employing cryogenic distillation. Fuel is fed to two places in a modern cement plant: the precalciner, which helps to preheat the feedstock and calcine the raw material, and the high temperature kiln where cement clinker is produced. Most of the CO2 is normally released from the limestone raw material in the preheaters and precalciner. Four oxy-combustion flow schemes were considered in the first phase of this study. The scheme that was selected for more detailed study involves oxy-combustion of the precalciner but air combustion of the kiln. This scheme minimises the possible impact of a high-CO2 atmosphere on the clinker production processes which occur in the kiln and minimises the impact of air in-leakage, which is substantial in some parts of a cement plant and which would have a large impact on the CO2 concentration and the losses of CO2 during purification. Further R&D may show that cement kilns could be successfully operated with a high CO2 atmosphere and in-leakage could be greatly reduced. If so, oxy-combustion of the kiln as well as the precalciner could be feasible. There is some experience of oxygen enrichment in cement plants to improve plant throughput but not for CO2 abatement and not at high levels of enrichment. Oxy-combustion power generation pilot plants are being built but oxy-combustion is at an earlier stage of development than post combustion capture. Performance and costs of cement plants with CO2 capture The estimated performances and costs of cement plants with and without CO2 capture are summarised in Tables 1 and 2.

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Table 1 Plant performance Unit Base case

(no capture) Post

combustion capture

Oxy-combustion

Fuel and power Coal feed kt/y 63.3 291.6 72.1 Petroleum coke feed kt/y 32.9 32.9 27.1 Total fuel consumption (LHV basis) MW 96.8 304.0 97.8 Average power consumption MW 10.2 42.1 22.7 Average on-site power generation MW - 45.0 0.7 Average net power consumption MW 10.2 -2.9 22.0 CO2 emitted and captured CO2 captured kt/y - 1067.7 465.0 CO2 emitted on-site kt/y 728.4 188.4 282.9 CO2 emissions avoided at the cement plant2

kt/y - 540.0 445.6 % - 74 61

CO2 associated with power import/export kt/y 42.0 -11.8 90.8 Overall net CO2 emissions kt/y 770.4 176.6 373.7 CO2 emissions avoided, including power import and export

kt/y - 593.8 396.8 % - 77 52

Table 2 Costs Unit Base case

(no capture) Post

combustion capture

Oxy-combustion

Capital cost3 €M 263 558 327 Operating costs Fuel €M/y 6.7 21.5 6.9 Power €M/y 4.0 -1.1 8.7 Other variable operating costs €M/y 6.1 10.6 6.4 Fixed operating costs €M/y 19.1 35.3 22.8 Capital charges €M/y 29.7 63.1 36.9 Total costs €M/y 65.6 129.4 81.6 Cement production cost €/t 65.6 129.4 81.6 CO2 abatement costs Cost per tonne of cement product €/t - 63.8 16.0 Cost per tonne of CO2 captured €/t - 59.6 34.3 Cost per tonne of CO2 emissions avoided4 €/t - 107.4 40.2

2 The CO2 emissions avoided are the emissions of the base case plant without capture minus the emissions of the plant with CO2 capture. 3 The capital costs include miscellaneous owners’ costs but exclude interest during construction, although this is taken into account in the calculation of overall production costs. 4 The costs per tonne of CO2 emissions avoided take into account the emissions associated with imported and exported power.

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Post combustion capture The CO2 emissions avoidance at the cement plant site is 74% but taking into account CO2 avoided because of electricity exports the emissions avoidance increases to 77%. This could be increased to 93% if the percentage capture was increased to 95%. The cost of CO2 emissions avoidance is high at €107/t (US$161/t)1. The high concentration of CO2 in the flue gas of a cement plant compared to that of a coal or gas fired power plant reduces the size of the absorber tower and associated ducts, fans etc. However this is more than offset by lower economies of scale, the need to include FGD, which is normally already included in most power plants without CO2 capture but not in most cement plants, and the relatively high costs of providing steam for solvent regeneration from a modest-sized CHP plant. Oxy-combustion Oxy-combustion in just the precalciner avoids 61% of the CO2 produced at the cement plant. If required, this could be increased to 66% relatively easily by re-capturing the CO2 which is emitted in a vent stream from CO2 purification, using membranes or a small scrubber. Oxy-combustion involves a significant increase in the on-site power consumption, mainly for oxygen production and CO2 compression and purification. Taking into account CO2 emitted during generation of this power, the overall reduction in CO2 emissions is 52%. If the imported power was generated in power plants with low CO2 emissions, such as plants with CCS, the overall avoidance of CO2 emissions would be close to the on-site emissions avoidance. Oxy-combustion of the kiln as well as the precalciner, combined with processing of the vent stream, could increase the on-site CO2 avoidance to close to 100% but this would involve greater technical uncertainties, as described earlier. The cost of CO2 emissions avoidance is €40/t (US$60/t)1, substantially lower than the cost of post combustion capture. Oxy-combustion is particularly suitable for cement plants because oxygen only needs to be provided for the CO2 that originates from fuel combustion. No oxygen needs to be provided for the CO2 from mineral decomposition, which accounts for about two thirds of the on-site emissions of CO2 from a modern cement plant. Comparison with CO2 capture in power generation The costs of CO2 capture in cement plants need to be viewed in the context of the costs of CO2 abatement in other energy sectors. IEA GHG published studies on post-combustion and oxy-combustion capture of CO2 in power generation in 2004-20055. The costs of CO2 avoidance were €30/t CO2 for post combustion capture and €37/t CO2 for oxy-combustion. The differences are within the limits of accuracy of the assessments. These costs are within the range of costs quoted in the IPCC Special Report on CCS, published in 20056, bearing in mind that the €/$ exchange rate was about 1:1 at the time when the source data for the IPCC report were produced. Since then the costs of all types of power and process plants have increased substantially due to higher raw materials prices, tight labour supply and market conditions in the equipment supply industries. Fuel costs have also increased substantially and the value of the US$ has declined against the Euro. After adjusting for inflation7 the cost of post combustion capture in a coal fired power plant is estimated by IEA GHG to be €39/t (US$58/t)1 of CO2 avoided, which is similar to the cost of oxy-combustion at a European cement plant but less than the cost of post combustion capture. 5 Improvement in power generation with post combustion capture of carbon dioxide, IEA GHG report PH4/33, Nov. 2004. Oxy Combustion processes for CO2 capture from power plants, IEA GHG report 2005/9, July 2005 6 Intergovernmental Panel on Climate Change, Special Report on Carbon dioxide Capture and Storage, 2005, available at www.ipcc.ch 7 Capital costs of power plants in Euros are assumed to have increased by 25% between the beginning of 2004 and the end of 2007 and the price of coal is assumed to be €2.51/GJ, in line with this study.

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Sensitivities Sensitivities to technical and economic parameters are shown in Figures 1 and 2.

Figure 1 Post Combustion Capture Cost Sensitivities

50 70 90 110 130

3Mt/y Asian plant

Alternative solvent

Co-location

Power emissions factor

Discount rate, 8-12%

Plant life, 40 years

Total op. cost, -/+25%

Power cost, +/-25%

Fuel cost, -/+ 50%

Operating cost, -/+25%

Capital cost, -/+ 25%

Base case

Cost of CO 2 avoidance, €/t

Figure 2 O xy-Combustion Capture Cost Sensitivities

20 30 40 50

3Mt/y Asian plant

Co-location

Power emissions factor

Discount rate, 8-12%

Plant life, 40 years

Total op. cost, -/+25%

Power cost, -/+25%

Fuel cost, -/+ 50%

Operating cost, -/+25%

Capital cost, -/+ 25%

Base case

Cost of CO 2 avoidance, €/t

Power emissions factor The emissions associated with the power import/export affect the quantity of net CO2 emissions avoided. For the base case it was assumed that the emissions were the average of electricity generated in the UK (0.52 kg CO2/kWh). The sensitivity cases are based on

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emissions from a new coal fired power plant without CO2 capture (0.745 kg CO2/kWh) and a coal fired plant with 85% CO2 capture (0.14 kg CO2/kWh). Alternative post combustion capture solvent Some alternative proprietary amine solvents, for example MHI’s KS-1 solvent, have lower energy consumptions than the MEA solvent used as the basis for this study. The sensitivity to a 25% reduction in steam consumption is shown in Figure 1. Some developers are targeting even lower steam consumptions. Post-combustion capture processes which are not based on amines, for example aqueous ammonia scrubbing, also have the potential to significantly reduce the cost of capture in cement plants but insufficient data are currently available from process developers to enable costs to be estimated. Co-location with a power plant and use of low sulphur raw meal Another way of reducing the net cost of steam for post-combustion capture would be to obtain it from an adjacent power plant or another type of large industrial plant, thereby avoiding the need for an on-site CHP plant and its associated FGD. If in addition a raw meal (i.e. raw material) with a low sulphur content was used in the cement plant it may be possible to avoid the need for an FGD plant entirely. The sulphur compounds in cement plant flue gas originate mainly from decomposition of minerals during drying and preheating as most of the fuel-derived sulphur is retained in the cement product. A sensitivity case involving supply of steam from an adjacent large power plant at a cost of €10/t (US$15/t)1 and use of a low sulphur raw meal was assessed. The cost of CO2 avoidance is reduced by almost half to €55/t (US$83/t)1. Oxy-combustion cement plants could benefit from co-location with an oxy-combustion or IGCC power plant, because there would be economies of scale in larger oxygen and CO2 compression and purification plants. The reduction in the cost of CO2 avoidance is estimated to be approximately €6/t (US$9/t) at an assumed oxygen cost of €30/t (US$45/t). Co-location would also help to reduce the cost of transporting the CO2 to an underground store, because pipelines have large economies of scale. The European cement plants in this study capture 0.5-1.1 Mt/y of CO2 and the bigger Asian plants capture 1.4-3.3 Mt/y of CO2. For comparison a modern 1000 MWe coal fired power plant operating at base load with 85% CO2 capture would capture about 6 Mt/y of CO2. Large Asian plants Substantially larger cement plants are being built and operated in some developing countries, particularly in Asia. The cost of CO2 capture at a 3Mt/y cement plant in Asia was estimated to be significantly lower because of economies of scale and the lower costs of plant construction and operation in developing countries. The estimated cost of CO2 avoidance by oxy-combustion is €23/t (US$34/t)1 and the cost of post combustion capture is €59/t (US$88/t)1. Retrofit of CO2 capture Retrofit of post combustion capture to a cement plant would be relatively straight forward, provided sufficient space is available, as it would be a downstream addition to the plant. Oxy-combustion would require most of the core units in the cement plant to be rebuilt, although some of the ancillary solids handling equipment which accounts for a major proportion of the plant cost could be retained. Because oxy-combustion is expected to have significantly lower costs of CO2 avoidance, it may be worthwhile retrofitting oxy-combustion at the time of a major plant re-build but this was not assessed in this study. Capture ready plants A CO2 capture ready plant is a plant which can include CO2 capture when the necessary economic and regulatory drivers are in place. Cement plants can be made capture ready by

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undertaking a design study on capture retrofit, including sufficient space and access for the capture equipment and by identifying reasonable routes to CO2 storage. Some additional investment could be made to make retrofit easier and cheaper but such investment would need to take into account the effects of the time lag between investment and financial return and the uncertainties regarding future developments in capture technologies and whether or when capture would be retrofitted.

Expert Reviewers’ Comments The draft study report was reviewed by various external experts, including representatives from a cement manufacturer, a cement plant supplier, a cement industry research institute and experts on CO2 capture. The report was generally well received by the reviewers and a substantial number of helpful comments were received. IEA GHG is very grateful to those who contributed to the review. The issues raised by the reviewers were discussed with the study contractor and representatives of the British Cement Association and modifications were made to the report to address most of the reviewers’ comments.

Major Conclusions The cement industry has made considerable strides in reducing CO2 emissions but to make further major emission reductions CO2 capture is required. The addition of CO2 capture to new build cement plants to significantly reduce CO2 emissions is technically feasible. Both post combustion and oxy-combustion options can be considered although the oxy-combustion option is not technically mature enough for deployment yet. Pre-combustion capture would be less suitable for cement plants because it would not capture the CO2 from carbonate mineral decomposition, which account for about two thirds of the CO2 from a modern cement plant. The estimated costs of post combustion capture at new build cements plants are €107/tonne of CO2 emissions avoided (US$161/t) for a 1 Mt/y European cement plant and €59/t (US$88/t) for a 3 Mt/y Asian plant. Use of alternative solvents and integration with an adjacent power plant could more than halve the costs. Oxy-combustion offers the lowest cost solution for CO2 capture at new-build cement plants but further research and development is needed to address a number of technical issues to enable this technique to be deployed. Costs are estimated to be €40/tonne (US$60/t) of CO2 avoided for a 1 Mt/y European cement plant and €23/t (US$34/t) for a 3 Mt/y plant in Asia. The cost of CO2 capture at a cement plant using oxy-combustion is expected to be similar to the cost of capture at a typical coal-fired power plant. The quantity of oxygen required per tonne of CO2 captured is about three times lower at a cement plant but the economies of scale are less favourable. The cost of post combustion capture at a cement plant is expected to be substantially higher than at a power plant, mainly because of lower economies of scale and the need to install FGD, DeNOx and a boiler to provide steam for the regeneration of CO2 capture solvent. Post combustion capture could be readily retrofitted to existing cement plants provided sufficient space is available. Substantial rebuilding would be necessary to accommodate an oxy-combustion retrofit but this may nevertheless be the least cost option.

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Recommendations The following studies by IEA GHG should be considered for CO2 capture at cement plants:

1 A study on assessing the capture readiness of cements plants. 2 An assessment of cement plants with novel post-combustion CO2 capture processes

including ammonia scrubbing should be undertaken when process performance and economic data become available from licensors.

Practical R&D on oxy-combustion at cement plants is outside the scope of IEA GHG but members should consider such work to address uncertainties identified in this study. This study focussed on oxy-combustion in only the pre-calciner. Oxy-combustion for the whole plant including the kiln involves more technical uncertainties but it could be pursued as a study in the future, particularly if higher percentage capture of CO2 is required. Further work should be undertaken to assess the benefits of integration between cement plants with CO2 capture and other large industrial plants, especially power plants. Potential barriers to co-location should also be assessed. Some of this work could be included in the proposed study on capture readiness.

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OPERATING FLEXIBILITY OF POWER PLANTS WITH CCS

Introduction IEA GHG has undertaken several studies on power plants with CCS which include assessment of operation at steady state full load. An important aspect which has not been considered in detail is operability, which includes the ability to change the power output in response to changes in power demand, to be able to accommodate changes in ambient conditions, fuel compositions etc., to be easily started-up and shut-down and to be able to accommodate equipment failures in a safe manner. Operability of fossil fuel power plants is likely to become more important in future as more renewable power systems with variable outputs and more nuclear plants, which are relatively inflexible, are built to reduce CO2 emissions. The operability of power plants with CCS could have a major impact on the extent to which CCS will be used in future and it could also be a significant factor in the choice of the optimum CO2 capture technology. Little information is currently available regarding the operability of power plants with CCS. IEA GHG considers that further work on this subject is a priority but recognises that such work may require a large amount of effort. IEA GHG has employed the University of Waterloo, Canada to undertake an initial scoping study, which has been published as a Technical Review, 2008/TR1. The review has been circulated to members prior to the ExCo meeting. The report provides the following:

- A review of operability drivers and issues within electricity systems - A review of literature on operability of power plants with CCS - Discussion of techniques for the detailed assessment of the operability of power

plants with CCS - Discussion of the trade-off between operability and cost - A proposed scope of a detailed study, including an estimate of the amount of effort

required IEA GHG has also discussed study options with a contractor with expertise in electricity system modelling. IEA GHG’s technical review concentrated on power plants with CO2 capture but CO2 transport and storage would also have to be considered in any analysis of operability. Conclusions and recommendations The overview of the Technical Review is attached. The main conclusions are:

• Operability is an important consideration for power plants operators and it is likely to become even more so in future.

• There is currently little published work on operability of power plants with CCS.

• The amount of effort required for detailed analysis of the operability of power plants

with CCS would be substantially greater than that of IEA GHG’s other technical studies. For such a study to go ahead addition funding would be needed, for example from any IEA GHG Members and Sponsors that are especially interested in this subject.

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• The operability requirements of CCS power plants will depend on the extent to which

other low-CO2 generating technologies are used. A preliminary study could be undertaken to assess the impacts of greater use of renewable electricity generation on the operability requirements of fossil fuel plants with CCS and to provide a qualitative review of the possibilities of meeting these requirements. Such a study could be within the funding limits of an average IEA GHG study.

• IEA GHG could set up a new research network to discuss CCS plant operability. This

could be a traditional IEA GHG network involving annual or bi-annual meetings or IEA GHG could explore the possibility of organising virtual meetings to minimise the time commitment and carbon footprint of participants world-wide.

Links with other proposed studies One of IEA GHG’s on-going technical study remits is to compare the relative merits of techniques for abating greenhouse gas emissions from power generation. Most existing assessments have focussed on comparing performance and costs of technologies in isolation, e.g. costs of abatement for power plants operating at base load. This is valid for technologies with similar operating characteristics but becomes much less valid when the operating characteristics are different, as is the case for example with variable renewable energy sources. In such cases a simple ‘system cost’ has often been included for such energy sources but this is not a satisfactory method of analysis, because the system cost depends strongly on the nature and extent of the other technologies in the electricity system and it can be argued that all generation technologies have system costs or benefits which depend on their interactions with the other technologies in the system. A study of CCS plant operability is considered to be an essential part of a comparison of CCS and alternative low-CO2 power generation technologies. Action IEA GHG’s Executive Committee is asked to consider:

1. Whether IEA GHG should undertake detailed work to assess CCS plant operability and if so, how the necessary funding for this work should be obtained.

2. Whether IEA GHG should undertake a smaller study on modelling of future

electricity systems to define the requirements for and the potential economic benefits of CCS plant operability, together with a qualitative review of CCS operability. If Members consider this work to be a priority they could consider giving the go ahead at the meeting, otherwise it would be included in the next round of voting.

3. Whether a new research network should be set up to consider CCS plant operability

and if so, how the network should be organised.

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ASSESSMENT OF SUBSEA ECOSYSTEM IMPACTS

This study has now been completed; it was undertaken by the Crichton Carbon Centre of the UK. The overview will be sent out to members for comment prior to the ExCo meeting. Any comments were received and those generated during discussion at the ExCo itself will be taken into account before the final report is published. The draft overview of the study is provided for member’s reference.

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ASSESSMENT OF SUBSEA ECOSYSTEM IMPACTS

Background to the Study

One of the key elements required before receiving permission to commence underground storage of CO2, will be the ability of the operator to predict the behaviour of the injected CO2 and demonstrate a thorough understanding of the risks of leakage, and the associated impacts of these leaks. Also, CO2 Capture and storage (CCS) operators must be able to demonstrate that CO2 can be injected into suitable storage reservoirs both safely and with minimal or no environmental impact. The safety aspect predominantly relates to good design and operational practices and strict adherence to accepted health and safety procedures. In July 2007, IEA Greenhouse Gas R&D Programme (IEA GHG) published a report compiled by the British Geological Society (BGS) assessing the impacts of leaks from on-shore geological storage sites on terrestrial ecosystems1. This report showed that any environmental impacts that may arise will occur as a result of CO2 migration from a geological storage reservoir followed by subsequent seepage to the surface. Seepage is likely to occur at low levels over long time periods (possibly 100’s to 1,000’s of years) and will result in localised environmental impacts as witnessed from those natural accumulations of CO2 that have been observed to have migration and seepage occurring. It is expected that migration and seepage on-shore can be minimised or prevented through a combination of effective site selection and design, risk assessment and monitoring. Whilst it is expected that there will be similarities regarding seepage geological storage reservoirs there is still a need to attempt to quantify the migration/seepage conditions that might lead to environmental impacts on the seafloor from sub-seafloor geological storage projects. For CCS technologies to be acceptable to the general public, environmental bodies, commercial operators and regulatory bodies alike, operators must be able to demonstrate a deep and thorough understanding of the possible long and short term effects of CO2 seepage on ecosystems, both at the surface and subsurface level. This study aims to assess the extent of information currently available on the effects of CO2 seepage on subsea ecosystems, and assess what gaps in knowledge exist, along with providing recommendations for further research to address these gaps. The study was undertaken by Dr Rachel Dunk, The Crichton Carbon Centre, UK.

Results and Discussion The study covers 6 areas, and they are briefly outlined in this overview. Full details are presented in the main report. The subjects are as follows:

• Near Future Sub-Seafloor CO2 Storage Sites, • Fluxes of CO2 to the Global Ocean, • Analogues for Leakage or Seepage of CO2 from Sub-Seafloor Storage Sites, • Primary Leakage or Seepage of CO2 from Sub-Seafloor Geological Storage Reservoirs, • The Release of Leaked CO2 to the Ocean, • Vulnerable Objects and High Risk Scenarios.

1 IEA Greenhouse Gas R&D Programme (IEA GHG), “Study of Potential Impacts from Onshore CO2 Storage Projects on Terrestrial Ecosystems, 2007/3, July 2007”.

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Near Future Sub-Seafloor CO2 Storage Sites Offshore storage of CO2 depends on many physical factors and conditions, and the map shown in Figure 1 illustrates the most prospective basins for offshore storage of CO2. Figure 1: Prospective Offshore Basins for Storage of CO2 (Bradshaw & Dance, 2005).

Storage can be undertaken in both offshore oil and gas fields and deep saline aquifers. The regional distribution of potential storage capacity offshore is illustrated in Figure 2. Figure 2: The percentage of regional storage capacity in oil and gas reservoirs that occurs offshore versus the percentage of regional storage capacity in saline aquifer that occurs offshore (based on data from Hendriks et al., 2004 & Dooley et al., 2005). Shaded areas define the 50% and 66.6% boundaries.

From this plot, it can be expected that Africa (specifically West Africa), South East Asia, Western Europe and Oceania are will have significant offshore storage potential, in each case offshore storage represents over 50% of their respective total regional storage capacities. Fluxes of CO2 to the Global Ocean Fluxes to the oceans are either atmospheric or subterranean in origin. Atmospheric fluxes occur in the form of non-purposeful sequestration direct from the air to the ocean surface. The role of the world’s oceans in sequestering atmospheric CO2 has long been accepted, and numerous

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efforts have been made to limit this uptake 2 . Estimates and data sets taken from these experiments were combined by Sabine et al. (2004) to suggest a total uptake between the years of 1800 and 1994 of 433±70 GtCO2, which equates to approximately 50% of the CO2 produced by fossil fuel combustion in the same period. The IPCC Fourth Assessment Report estimates fluxes of 6.6±2.9 GtCO2/yr, 8.1±1.5 GtCO2/yr and 8.1±1.8 GtCO2/yr for the 1980’s, 1990’s and the period 2000-2005 respectively. Natural fluxes of CO2 to the ocean bottom waters are derived through hydrothermal circulation3, and this can occur in four different ways; submarine volcanism (volcanic arcs), Mid Ocean Ridges (MOR’s), subduction zones (back arc basins) and hotspots. The methodologies to determine the extent of these fluxes is a complex procedure and is explained in detail in the main report. Estimating global fluxes of volcanic CO2 requires an understanding of the CO2/3He ratio of volcanic emissions at the different types of hydrothermal vent sites, and there have been numerous studies carried out (see main report for more information), but using average values from the published data, the calculations for volcanic CO2 fluxes to the ocean can be determined as shown below in Table 1 which transposes these ratios into CO2 fluxes in terms of Mt/yr.

Table 1: The Flux of Volcanic CO2 to the Ocean

(%)

MORs 489 ± 217 2.1 ± 0.9 1.0 ± 0.6 45 ± 28 (27.8)

Back-Arc Basins 109 ± 48 12.8 ± 10.7 1.4 ± 1.3 61 ± 58 (37.8)

Volcanic Arcs 53 ± 28 23.5 ± 10.0 1.3 ± 0.8 55 ± 37 (34.1)

Hotspots 2 ± 1 4.5 ± 2.6 0.01 ± 0.01 0.5 ± 0.4 (0.3)

TOTAL 3.7 ± 1.7 162 ± 74

F(3He) CO2/3He F(CO2)

1012 mol/yr Mt CO2/yrmol/yr 109 mol/mol

Comparison of these two sources of CO2 flux to the ocean indicates that the main flux is atmospheric in origin, with an estimated 8.1±1.8 GtCO2/yr for the present day, compared with 162±74 MtCO2/yr for volcanic fluxes. This equates to an atmospheric flux of 50 times that of sub-seafloor sourced fluxes. However it is noted that: these fluxes and in fact approximately 600-1000 times the amount of CO2 injected into sub-seafloor reservoirs to date and are significantly higher than expected seepage rates from geological storage reservoirs4. Also most of these volcanic fluxes occur in the Australasian and South East Asian regions which are prospective areas for offshore storage. In these regions therefore there will be existing natural emissions of CO2 that will likely mask the impacts of leaks from geological storage systems, and leakage would not cause discernable disturbance or impact on local ecosystems.

2 World Ocean Climate Experiment (WOCE), and the Joint Global Ocean Flux Survey (JGOFS). 3 The heat driven transport of water through the earths crust. 4 Assuming widespread deployment of CCS by 2100, then the total mass of stored CO2 could reach 250-500 GtCO2, and assuming that all storage reservoirs meet performance requirements of >99% of CO2 retained for 1000 years, then maximum leakage flux should total 2.5-5 MtCO2/yr which is around 20-100 times lower than the natural volcanic flux to the ocean.

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Analogues for Leakage or Seepage of CO2 from Sub-Seafloor Storage Sites There are two possible analogues for leakage from s sub-seafloor storage site; release from natural CO2 vents, and purposeful release experiments. In order to determine the validity of these as analogues, the physical and chemical characteristics must be compared and examined for similarities and differences. Natural vents are usually found along faults in regions of high tectonic activity, and are understood to occur at shallow, intermediate and deep zones. The zones can be recognised by the following:

• Shallow zones are typically less than 200m deep, and can also be recognised by the absence of vent obligate taxa, which are organisms usually present around hydrothermal vents, and the CO2 will be in the gas phase,

• Intermediate zones are between 200 and 600m deep, and at these vents it is likely that some vent obligate taxa will be present and the phase state of the CO2 is determined by the local temperature,

• Deep zones are characterised as being deeper than 600m, the majority of biota present will be vent obligate taxa, and the CO2 will be in the liquid phase.

To compare a vent to a leakage from a storage reservoir, three aspects must be considered; does the environment reflect that likely to be found at a leakage site? Does the scale of leakage in terms of area, rate and duration equate to that of an expected leakage event? And thirdly, what extent of variation exists between the vents and the expected leakage site in terms of physical and chemical properties? These three questions must be addressed in order to determine suitability of a vent as a natural analogue for CO2 storage. The report identified West Africa, Western Europe, South East Asia and Oceania as potential regions for near future deployment of sub-seafloor storage, and vents can be readily found in the Mediterranean and Pacific regions due to tectonic activity so there is a potentially good correlation between natural vents and potential CO2 storage sites. Case studies demonstrating this correlation can be found in the main report. There are numerous problems encountered when attempting to carry out purposeful release experiments of an appropriate scale. To imitate seepage through the sediment column would essentially need an engineered leakage, and in addition to the difficulties of setting up such a procedure, adverse public opinion and permitting for the procedure would encounter further issues. These issues are discussed in more detail in the main report. Both types of analogue can be a good source of data, and both should be the subject of further research as they provide a good balance; where vents are weak in some aspects, purposeful release experiments are strong, and vice versa. Primary Leakage or Seepage of CO2 from Sub-Seafloor Geological Storage Reservoirs The potential mechanisms for trapping of CO2 in geological storage reservoirs both on-shore and off-shore are well documented see the IPCC Special Report on CO2 Capture and Storage (IPCC SRCCS). The mechanisms that can facilitate leakage are also well understood, Figure 3 lists the potential scenarios for causing leakage to occur, and gives an analysis of the likelihood, along with the probably frequency of the event.

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Figure 3: Qualitative likelihood of leakage via different mechanisms and probability of a leakage event occurring per item per 1000 years.

However, in the case of subsea geological storage, when migrating CO2 encounters the sediment column, there is a possibility that further trapping mechanisms to come into play which can restrict or prevent the further migration of CO2 into the ocean. Also, different forms of migration pathways can exist that facilitate the movement of CO2 from the storage reservoir into the bottom ocean waters. The buoyancy of the CO2 bares a great impact on the migration rate, and the buoyancy is dependant on the density and viscosity of the CO2, and these in turn are impacted by the temperature and pressure. Different combinations of conditions result in affected buoyancy, and subsequent changes to the migration rate of CO2. These are illustrated by example cases in the main report. A leak of CO2 into a water saturated sediment column will instigate residual trapping5. The capacity of residual trapping is dependant on in-situ conditions, but the main report demonstrates that a 1m2 sediment column at a depth of 1000m will have the capacity to trap 116±23 tCO2. In conditions of slow leakage (i.e. approximately 10tCO2/yr), it would be possible for all the CO2 that leaked over a 10 year leakage event to be effectively trapped in the sediment column. However, as leakage of this rate is unlikely to be detected, it is reasonable to assume that the leakage event would continue for longer than 10 years, and could be in the range of 100-1000 years. In this situation, the amount of CO2 that could be trapped by this method would only equate to between 1-10% of the total leaked volume. This can be illustrated on a graph, and is shown in Figure 4 below.

5 In this context, residual trapping refers to the CO2 that has leaked from the storage reservoir, but remains in the sediment column, and does not reach the ocean waters.

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Figure 4: The efficacy of residual trapping as a function of leakage rate and duration of leakage.

Another secondary trapping mechanism which can account for the eventual fate of CO2, is gas hydrate trapping. CO2 readily forms a gas hydrate, which is a solid phase which forms at low temperature and high pressure, conditions which are often encountered at potential leakage sites in deep waters. This hydrate formation can limit the escape of CO2 to the ocean, and in some cases may prevent it completely. Theoretically, as CO2 migrates upwards through the sediment column into an area where the conditions are suited to hydrate formation, hydrate crystals will begin to form, and they can block the pre space, slowing the potential for further upward CO2 migration; it is possible that these hydrates can form to such an extent that they can form a cap capable of withstanding considerable pressure from below as more CO2 migrates through the sediment column to the base of this hydrate layer. Other mechanisms that can affect the trapping include dissolution and mineral trapping. These are both subject to complex controlling mechanisms, and not all of these are understood to a degree whereby they can be incorporated into models. There is more detail of these methods in the main report. Currently, each of the trapping mechanisms discussed in this section are considered in isolation, due to this lack of understanding. They represent an area for future research to facilitate the incorporation of these mechanisms into a comprehensive dynamic model. The Release of Leaked CO2 to the Ocean If the various trapping mechanisms in both the storage reservoir and sediment column do not prevent the migration of CO2, then the ultimate result will likely be a leak into the ocean waters. Comparisons have been made between this situation and that of purposeful storage in the oceans under similar conditions, however differences between the two situations exist and must be considered:

• Chemistry of the CO2; purposeful ocean storage would include stringent controls on the chemical make-up of the CO2, and although sub-seafloor injection would be subjected

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to similar controls, migration through the overburden and sediment column could alter the CO2 chemistry by mobilising heavy metals and other toxic substances.

• Volume location and depth characteristics; these factors would be dictated by the site selection of ocean storage, whereas leakage could occur in a less predictable location, without external controls.

• Monitoring techniques; a combination of methodologies would be necessary to detect a leak, both sub-surface and water column monitoring, continuous and periodic. Although the total amount of CO2 would be lower that purposeful ocean storage, the risks due to lack of controlling mechanisms would equate to a higher risk factor.

Impacts on organisms and ecosystems are highly complex and can occur at any level from the molecular to the entire community. Effects can also be as severe and easily detectable as organism death, to less discernable effects such as decreased growth or development rates. Tolerance levels are a vital element of determining impacts of CO2 leaks, and Figure 5 illustrates the possible effects on different organisms and ecosystems. Figure 5: Possible hierarchy of functional limits at increasing CO2 levels (after Pörtner et al., 2004). Categorisation of CO2 dependant effects on ocean biota based on the concept of a molecular to systematic hierarchy of tolerance limits. The widest tolerance windows are at the lowest hierarchical or functional levels. As system complexity increases, the combined effect of on numerous different functions leaks to narrow tolerance windows at high hierarchical levels. Thus while individual mortality might only be observed at significantly elevated CO2 levels, changes in community structure and ecological functions may well occur at considerably lower CO2 concentrations. Pejus thresholds (long term tolerance) mark the CO2 concentration where performance limitations are first observed. Critical thresholds (short term tolerance) mark the onset of metabolic depression. Both pejus and critical thresholds are likely to vary between species and phyla.

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Vulnerable Objects & High Risk Scenarios It can be stated that the risks associated with a leakage event can be defined as high when a high possibility of leakage coincides with the presence of one or more vulnerable objects (species) in the leakage path. The key determining factor for a high risk scenario is therefore likely to be the presence of a vulnerable object. An example that illustrates this is the scenario of CO2 migrating out of the storage formation through a leakage pathway such as a fault; the CO2 could be subsequently immobilised by secondary trapping mechanisms in the sediment column, resulting in the leakage event being defined as low risk; but the same leakage without the secondary trapping mechanisms could result in escape to the ocean, whereby the presence of a vulnerable object would determine whether the leakage event was low or high risk. An example of a particularly high risk situation is that of leakage in areas with a proliferation of deep water coral reefs. These coral reefs occur in the vicinity of nearly all areas both currently being used for CCS, and those identified as likely to commence sub-seafloor storage in the near future. These often occur in proximity to hydrocarbon seeps which could also act as possible migration pathways. Leakage of CO2 to a deep water coral reef can cause extensive damage to entire ecosystems. The presence of CO2 in this instance can lower pH which would inhibit calcification (the process by which coral reefs are formed) and even lead to dissolution of the reef. For this reason, the presence of coral reefs equate to a high risk at the level of damage to organisms, but furthermore, the coral reefs play an important role in the greater ecosystem; the reefs sustain an extremely high level of biodiversity, and also act as nurseries for many species of fish, including those of importance to commercial fishing. As a very slow growing species, damage to coral reefs could take as much as 100’s to 1000’s of years to recover, if at all. Key Knowledge Gaps and Future Research Requirements The report has highlighted where the key knowledge gaps exist, and also outlines the issues that need to be considered before commencement of a sub-seafloor storage project. The key conclusions and needs for further research can be summarised as:

• Site specific assessment; due to the potential for wide ranging variations in temperature, pressure, and presence of vulnerable species, site specific assessments are vital before permitting storage operations. Although generic guidelines could potentially provide a high level screening process, the complexity of storage under the sea-floor would require in-depth analysis of the likely conditions experienced, the susceptibility of a reservoir to leak, the possibility of the leak reaching the ocean, and the presence of CO2 tolerant / vulnerable species. Effects of leaked CO2 on the pH would also need significant attention.

• Capacity of the sediment column to provide secondary trapping mechanisms; it is explained in the report how trapping mechanisms in the sediment column can account for secure and permanent immobilisation of CO2 leaking from the storage reservoir, and the potential for this could provide a strong indication of secondary storage security. Whether this would be considered acceptable under a storage permit is not known, but possibly further research could help to develop the knowledge on the potential of this storage mechanism.

• Species identification; as with all CCS activities, the identification of key indicator species to determine the presence and extent of impacts from leaks will greatly assist in determining the potential effects of leakage. Sub-seafloor storage could cover such a wide diversity of environments and ecosystems around the world, that many species may be needed depending on the precise situation encountered. It is recognised that certain coral species are particularly vulnerable to CO2, and even small increases in ocean pH may have lethal effects.

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Expert Review Comments The key findings of the report were presented at a recent workshop organised by IEA GHG and BGS, addressing the impacts of potential leakage on both terrestrial and marine ecosystems. The report was also sent to a panel of exert reviewers, whose comments concluded that the report was a very thorough piece of work, and would be of benefit to the R&D community. Some comments were made regarding the omission of some more recent research, and this is due to the timescale the project has run for. In the interests of publishing the report, this was accepted but no action has been taken. Conclusions The report highlighted the areas that are likely to be subjected to sub-seafloor storage in the near future, and included case studies on many of these. The key areas suited to sub-seafloor storage can be stated as West Africa, Western Europe, South East Asia and Oceania. Beneficially, natural analogues such as volcanic arcs and hydrothermal vents also occur in these waters, and can therefore be used as analogies for storage reservoir leaks. This will allow operators to perform assessments on the likely implications of leakage events before storage commences. It also suggests that any leaks in these areas will have a relatively low significance, as the leaked CO2 will represent a lower percentage change to the seawater chemistry in these areas. Deep water corals also have a correlation to the regions identified as near future opportunities for sub-seafloor storage, and as such intensive monitoring may be necessary in order to facilitate early detection of seepages through the sediment column in these areas as the impact of leakage directly into areas with deep water corals could case significant and long lasting damage to key species in the ecosystem, with far-reaching knock-on effects on commercially important fish species. The report also highlights the comparatively low level of significance leakage may have when compared to flux from submarine volcanism, provided performance criteria are met in accordance with expectations. Recommendations for further work could include regional assessments and identification of specific storage reservoirs and associated capacity estimation. This could form part of the IEA GHG range of studies concerning regional capacity building, or as a stand-alone study. Further research is also needed into the identification of key-indicator species for different regions around the world, tolerance levels of these species, and recovery rates when normal conditions are reinstated. The recent IEA GHG / BGS workshop on environmental impact assessments highlighted areas for future research, and it is expected that further workshops will be held to monitor progress towards these research goals.

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AQUIFER STORAGE POTENTIAL

This study has now been completed; it was undertaken by the CO2CRC, Australia. The overview will be sent out to members for comment before the ExCo meeting. Any comments received and those generated during discussion at the ExCo itself will be taken into account before the final report is published. The draft overview of the study is provided for member’s reference.

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OVERVIEW

Background to the Study

The IEA Greenhouse Gas R&D Programme (IEA GHG) commissioned CO2CRC of Australia to undertake a study of the current status of CO2 storage in deep saline aquifers. Earlier studies by IEA GHG had shown that of the main geological storage reservoirs available globally for CO2 storage, deep saline aquifers have the highest storage potential and substantial cuts in CO2 emissions may therefore require utilisation of deep saline aquifers as storage reservoirs. However, the storage capacity of deep saline aquifers from various estimates show wide bounds: from 1,000 to over 10,000 GtCO2 globally. Many of the deep saline aquifers being considered for storage are ‘virgin’ formations and structures in which little or no geological characterisation has taken place, in contrast to many oil and gas fields. Therefore, considerable exploratory work will be required before such structures can be considered as “fit for purpose” for CO2 storage. Selection of safe and secure geological reservoirs must be accompanied by confidence in the associated CO2 storage capacities. The aim of this study was to bring together and review the research that has been undertaken in Europe, North America, Japan and Australia, to develop an understanding of how knowledge on deep saline aquifers has developed in recent years, in particular since the IPCC Special Report on CO2 Capture and Storage (IPCC SRCCS). Emphasis was placed on the identification of knowledge gaps and priority areas for R&D activities.

Scope of Study The reference point for the study was the conclusions and knowledge gaps outlined and identified in the IPCC SRCCS. The study aimed to review all practical research activities carried out since that publication, and summarise progress made towards addressing those knowledge gaps. Individual tasks were outlined for the study: 1. The starting point of the study was to develop a database of all projects and

research currently underway. This database was compiled in close consultation with the assigned IEA GHG project manager. The database aimed to pull together all new information relating to the knowledge gaps identified in the IPCC SRCCS.

2. Utilising the database, the study determined the current state of knowledge relating to each knowledge gap identified in the IPCC SRCCS, including:

o Definition of the current state of knowledge on global capacity estimates for deep saline aquifers and the methodologies used to determine these, including recent work carried out by CSLF and others.

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o Definition of the current status of regional capacity mapping and estimation of storage potential, with reference to global capacity assessments.

o Definiton of the current status of storage science, in particular trapping mechanisms, and specifically the kinetics of geochemical trapping and the long term impact of CO2 on both the reservoir rocks and fluids.

o Commentary on the current state of knowledge on risk assessment related to deep saline aquifers and any particular issues that could arise as a result of brine displacement. The contractor was able to draw upon the results obtained from the IEA GHG international research network on risk assessment.

o Provide a summary of monitoring activities in deep saline aquifer storage projects, with consideration of whether monitoring needs for deep saline aquifers are different from other storage reservoir types.

o Definition of the current status of model simulations and their contribution to understanding of the transport and fate of injected CO2 in deep saline aquifers; in particular definition of the current development of coupled models and their application.

o Review new cost information available from pilot and demonstration projects for injection into deep saline aquifers, with commentary on implications for future projects.

o Review Best Practise guidelines and related experience1 on deep saline aquifers and comment site characterisation requirements, again with narrative on differences from other storage reservoir types.

3. The study also aimed to create a comprehensive summary of reservoir properties

and injectivity data based on pilot and demonstration activities, both underway and planned. The study aimed to comment on the range of reservoir properties encountered and whether these may be representative of global storage conditions, or if particular reservoirs or regions that should be preferred for future pilot studies or demonstration projects.

4. Finally, the study sought to establish knowledge targets necessary to achieve a

level of confidence needed, to confirm deep saline aquifers as suitable, secure and safe options for CCS activities.

The study involved primarily desk-based activities but industry and regulatory perspective was sought on certain issues.

Results and Discussion The starting point for the study was the knowledge gaps identified by the IPCC SRCCS, which were summarised in the study report as the following ten key points:

1. Current storage capacity is imperfectly known due to inconsistency in assessment methodologies, lack of data and gaps in global, regional and local estimates, particularly data from Africa, South America and large parts of Asia, although there are also many data gaps in OECD countries too.

1 IEA GHG has undertaken a study

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2. Kinetics of trapping mechanisms and their long term impact on reservoir characteristics, particularly geochemical trapping need further investigation.

3. Improved coupled hydrogeological-geochemical-geomechanical numerical models would help to better predict the long-term fate of injected CO2 in the subsurface and quantify potential leakage rates.

4. Risks of CO2 leakage from abandoned wells due to casing and cement degradation and the temporal variability and spatial distribution of leaks should be better assessed.

5. Quantitative methods to assess the risk of CO2 leakage to human health and the environment are needed.

6. Improved monitoring technologies would be useful, such as a) better geophysical techniques for the quantification and resolution of CO2 plumes in the subsurface, b) improved remote sensing and other cost-effective methods for temporally variable leak detection, c) methods for fault and fracture detection and characterisation of their leakage potential, and d) development of suitable long-term monitoring strategies.

7. Options for mitigation and remediation technologies for potentially leaking CO2 need to be developed.

8. There is insufficient information on potential costs of CO2 storage in aquifers, including regulatory compliance costs and monitoring requirements.

9. The regulatory and liability framework for CO2 storage in aquifers is unclear or needs to be established, particularly with respect to decommissioning requirements and long-term liability.

10. Standardised approaches for verification and accounting of CO2 storage are lacking.

The study successfully developed a database of relevant scientific literature for the period 2005 to 2008, which has been provided by the contractor as a separate database and spreadsheet. The review of this information, including that reported from various pilot, demonstration and commercial injection projects, has enabled a comprehensive review of progress made in addressing the key knowledge gaps in the intervening period since the publication of the IPCC SRCCS. Storage Capacity Estimation Detailed work on methods for storage capacity estimation has been undertaken by both the CSLF and US DOE in recent years. Estimates of regional storage capacity should always be supported by clear statements defining the methodologies and nature of assumptions employed. This allows quoted capacities to be placed in the context of techno-economic resource classification schemes – for example, the CSLF ‘pyramid’. Such an approach facilitates comparison of results from different regional studies. Aquifer storage typically accounts for 90% or more of regional or global geological storage capacity according to many studies – so the underlying assumptions used for aquifer calculations have a fundamental effect on estimates of total capacity. Two factors were highlighted which can cause major discrepancy between different approaches:

• Whether to limit capacity estimates in aquifers to structural traps (favoured by CSLF) or consider entire formations (favoured by US DoE), and

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• How capacity is considered in terms of storage as free-phase or dissolved-phase CO2. The CSLF methodology includes calculation of dissolved-phase capacity, whilst the US DoE methodology recognises the long term significance of dissolution but without any method for calculation.

Key remaining knowledge gaps were identified as:

• Consistent global approach to methodology for capacity estimation and storage coefficients

• Improved regional estimates for Africa, Latin America and Asia (excluding China and Japan)

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The report included an updated world map, Figure 1 below, with storage capacities relating to theoretical resources at the base level of the CSLF pyramid:

Figure 1: Map showing projects injecting or having injected CO2 into deep saline aquifers. Also shown are projects in an advanced planning stage (see text for details) as well as the Weyburn and Otway pilot projects. The first-order theoretical storage capacity estimates are based on the map by (Dooley et al., 2006) and updated with values for North America (DOE, 2007a), Japan (Li et al., 2005), Brazil (Ketzer et al., 2007), and China (Li, 2007).

Geochemistry and Trapping The rates at which geochemical trapping mechanisms such as solubility, ionic and mineral trapping occur are dependent on thermodynamics, kinetics and physical properties of the storage formation. Predicting the potential timescales over which these geochemical processes take effect, is crucial to understanding the relative importance of geochemical trapping in relation to the security and viability of any given storage site. Where predictive modelling of storage fails to account for geochemical trapping mechanisms, the effect will be to overestimate the amount of CO2 stored as an immiscible phase and therefore, also overestimate the potential risks associated with leakage. The report describes recent advances in understanding the geochemistry of CO2 storage, which have been achieved through experimental studies at both field and laboratory scales, natural analogue studies and modelling. The ability to simulate CO2 dissolution into formation water has been demonstrated to match experimental data, although the report identifies a need for more data at pressure and temperature conditions analogous to storage scenarios. Similarly, modelling codes have been developed to allow calculation of saturation indices for complex solutions and mineral phases. However, more experimental and field data for both single and multi-mineral phase systems is required to

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verify models are representative of natural systems. Continued modelling of various experimental, field and analogue data allows further progress in incorporating kinetics of reactions into modelling codes. The report also identifies some specific knowledge gaps that still remain:

• Conceptual models of the geochemical system need to be provided in detail. Choices of reactant and product phases are often the product of the numerical model rather than constrained by experimental and observational data.

• More thermodynamic and empirical data especially for Pitzer equation formulation is required for saline solutions.

• Thermodynamic properties of mixed mineral phases (solid solutions) and poorly defined mineral phases like clays are not well constrained.

• Surface processes like adsorption and exchange can act as a significant buffer to pH changes and can be a store of cations that may be involved in mineral trapping. Many modeling codes include the ability to simulate adsorption and ion exchange making sensitivity analysis possible. More experimental data is required.

• Kinetic rate parameters still need to be refined for some mineral phases especially mixed mineral phases and poorly defined mineral phases like clays. Dawsonite precipitation kinetics need to be investigated as this is one of the most common product phases of numerical simulations and yet is not a common phase observed in natural analogues or experiments.

• Reactive surface area – determination, calculation, estimation. The most common difficulty described in the recent literature is the selection of a value for the reactive surface area to include in rate equations.

• Surface reaction mechanisms and how they influence the rates of reaction is poorly understood and difficult to model.

• Precipitation nucleation and degree of supersaturation required for precipitation for many important phases is not well known.

• Upscaling of reaction kinetics from the mineral surface to the continuum scale of reactive transport modeling is poorly constrained.

• Integration of experimental and natural analogue observations with geochemical reaction path and reactive transport modeling is receiving considerable attention and has promising outputs for helping constrain predictive models. More extensive datasets need to be gathered to populate model systems.

• Experiments addressing specific aspects of the mechanisms of geochemical trapping need to be undertaken – dissolution/precipitation kinetics, multiphase systems, mineral surface processes. All require more attention.

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Predictive Modelling Current numerical modelling codes, many being based on standard modelling and simulation tools from the petroleum industry, can incorporate hydrodynamic, geomechanical and geochemical processes. The effects of heterogeneity, relative permeability hysteresis, convective mixing and brine co-injection have all been the subject of recent research. Similarly leakage scenarios have been investigated, including assessment of self-enhancing and self-limiting geochemical and geomechanical processes. The report provides an informative overview of all significant factors affecting the current state of the art in CO2 storage modelling. There has been a marked increase in recent years, both of simulation software and the number of worldwide research groups engaged in the modelling of CO2 storage. The need for cross-checking exercises for code comparison is therefore of considerable importance; the University of Stuttgart is in the process of completing such a study. IEA GHG is planning to hold a workshop on CO2 storage modelling in February 2009 with a view to establishing a research network on the subject, to help facilitate the sharing of knowledge and experience in this rapidly developing area of expertise. Trapping mechanisms for CO2 storage in saline aquifers are now well understood. Injected CO2 can be stored as: a gas phase either beneath a seal or in residual form within the pore space; dissolved in formation water; or precipitated in a mineral phase. The fate of injected CO2 and the relative importance of these trapping mechanisms will have a major bearing on the optimal injection strategies for sites, and modelling processes should be sufficiently robust to inform these strategies. Adequate characterisation of the storage formation is also important. For example, the presence of shale barriers in a storage formation can reduce vertical permeability, thus increasing the tortuosity of migration pathways and enhancing residual and dissolution trapping mechanisms. Leakage scenarios investigated by various authors include migration upwards through high-permeability conduits such as faults, and gradual accumulation in shallow formations prior to leakage to surface via tipping of ‘spill points’. A number of challenges are presented by leakage to shallow depths, particularly in terms of migration through the unsaturated zone to surface water or the atmosphere. Identified knowledge gaps remain, including:

• Code comparisons need to be extended to more detailed examinations of coupled geochemical and geomechanical models.

• Improved flow modeling of CO2 liquid/gas transitions in shallow reservoirs or near-surface leakage, possibly including hydrate formation.

• Better simulations of tracer effects in CO2, especially density effects due to accumulation of relatively insoluble tracers at the front.

• Inclusion of fluid density changes in reactive transport simulations, for coupling to fluid convection.

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• Upscaling of CO2 simulations e.g. upscaling of solubility, residual gas trapping, convective mixing or vertical migration of CO2.

• Improved quantification of potential leakage rates of CO2 and CO2/gas mixtures to the surface, especially through faults and fractures, with coupling to geomechanics.

• Simulation of CO2 leakage rates through wellbore cement, including coupling to CO2-cement reactions, to arrive at a better assessment of the overall risk of well leakage.

• Simulation of surface leakage of CO2, including screening of scenarios for sudden releases, and coupling with the atmosphere (onshore) and the sea (offshore).

• Simulation of coupling CO2 injection to hydrogeology, including assessment of effects on CO2 migration and adjacent aquifer units.

• Data sets to test models for convection of dissolved carbon dioxide and coupled reactions on large time scales (beyond what is possible in demonstration projects, so would need to be from natural systems).

• Data sets to test geomechanical models for fault reactivation (if faults are to be deliberately reactivated to test models this would involve water rather than carbon dioxide).

• Data sets to test leakage models, perhaps using natural systems.

• Data sets to test and calibrate tracer/CO2 behaviour in laboratory and field, including partitioning coefficients between a dense CO2 phase and water.

The knowledge gaps identified above for predictive and geochemical modeling will form part of the basis for discussions at the forthcoming IEA GHG workshop on geological storage of CO2 storage, scheduled for February 2009 in Orleans, France.

Risks associated with Wellbores The study describes leakage through abandoned wells as significant, particularly at onshore locations with high concentrations of wells. Wellbore leakage raises the potential problem of CO2 interactions with standard Portland cement and this topic has been the subject of much research effort, as reported by the IEA GHG international research network on well integrity. Research effort is also being focussed on the coupling of migration through cement and reactions within the matrix. A key factor here is the characterisation (width and permeability) of pre-existing fractures through cement, since diffusive transport of CO2 through cement is considered to be too slow to affect integrity. A further challenge is then for reactive transport modelling simulations to match laboratory experiments and even field data. The lack of field data to characterize leakage pathways through wellbore cement is considered to be a key knowledge gap.

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The work of the IEA GHG Wellbore Integrity Network continues to provide an international forum for experts to discuss these issues. Site Characterisation Site characterisation can be regarded as the collection and analysis of geological information to confidently predict the safe and effective injection of CO2 into an accurately constrained storage capacity. Key relevant documents issued in recent years are the 2007 Best Practice Manual from the SACS/CO2STORE project, and the 2008 CO2CRC report on storage capacity estimation, site selection and characterisation. Site characterisation can be regarded as the most costly and time-consuming part of the site selection process. CO2CRC report that the key steps involved in characterisation are: structural and stratigraphic interpretation based on subsurface data; construction of geological models with realistic representation of heterogeneity; geochemical, geomechanical and hydrogeological modelling; and numerical modelling to predict CO2 plume migration. The report recommends that development of best practice manuals include reference to a broad range of case studies from around the world. IEA GHG is co-funding a study on site characterisation by DNV that aims to develop qualitative ‘best practice’ procedures, whilst a second proposed study will consider quantitative criteria. Risk Assessment Established risk assessment (RA) methodologies for various environmental or industrial scenarios are described as factors of likelihood and consequence, with risks proportional to impact severity and probability. Risks can be assessed using qualitative, deterministic or probabilistic methods. To date, no consistent RA methodology for CCS projects and CO2 storage exists. The IEA GHG risk assessment network has facilitated much debate and sharing of experience on the application of risk assessment techniques to CO2 storage. The third workshop of this network in 2007 concluded that, whilst a fully quantitative RA process for CCS may be desirable, current limitations and uncertainties in CO2 storage modelling and impact assessment restrict meaningful RA techniques to qualitative or semi-quantitative methods. Monitoring Technologies The study reported a summary of monitoring undertaken at injection sites. At Sleipner, 4D seismic has been successfully deployed but this technique is relatively expensive; 4D gravity has also been shown as a useful tool for qualitative assessment. At the Frio and Nagaoka injection sites, 4D vertical seismic profiling and cross-well electromagnetics allowed quantitative tracking of the CO2 plume.

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Monitoring technologies for shallow groundwater, soil and atmosphere have been researched and developed, but still require successful demonstration. Knowledge gaps were identified as:

• Improvement of cost-effective monitoring strategies, including new techniques;

• Additional monitoring and verification data from injection projects. In addition, natural analogues provide important opportunities for ongoing testing of near-surface CO2 leakage. The work of the IEA GHG monitoring network continues to focus on the development of CO2 storage monitoring technologies. Potential Costs of Storage Normalisation of available cost data to create a predictive cost model for aquifer storage is problematic at present due to a number of factors. Available cost data is sparse, quoted in different currencies from different years, and based on widely differing storage scenarios and methods. The current widespread absence of regulatory regimes also means that the requirements for the major cost elements of site characterisation, monitoring, abandonment and remediation are all uncertain. The report’s conclusion on the difficulty of estimating storage project costs reflects the IEA GHG position; a proposed study of CO2 storage costs has been delayed, pending completion of studies on site characterization, injectivity and efficient use of storage capacity, and further development of regulatory regimes. IEA GHG proposes to consider such a study in 2009/10, when other relevant studies listed above can be used to better inform projection of storage costs. Regulatory and Liability Framework Key issues that need to be addressed by various regulatory regimes currently under development are:

• Long term liability and stewardship of storage sites, • Definition of monitoring and verification requirements, • Emission trading scheme implications.

These issues are being addressed rapidly in several regions of the world, and the IEA regulators network is providing an important contribution. Overall Conclusions of the Study Table 2 below provides a summary of overall progress, key issues and knowledge gaps for storage of CO2 in deep saline aquifers. The report also states that the four main research areas can be considered as:

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• Better understanding of long term geochemical processes • Coupled simulation modelling for long term predictions • Quantification of leakage scenarios • Potential wellbore leakage due to cement degradation

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Table 2. Geological storage of CO2 in saline aquifers – issues, progress and remaining knowledge gaps

Issue

2008 Progress

Remaining gaps

Comments Importance for commercial

implementation

Storage Capacity

Uncertainty in capacity estimates

US DOE Atlas Japan

Europe? Australia?

Africa, Asia, Latin America

Europe? Australia?

Inconsistent methodology

US DOE Atlas CSLF Report

CO2CRC Report

Universal document

Should be consistently

applied

Storage Science

Geochemistry

Advances in solution

composition and surface processes

Use of reactive surface area in

models; experiments addressing

specific aspects of geochemical

trapping

Field-relevant experimental

data is needed.

(Coupled) numerical models

Modelling of experimental and natural

analogue data; well leakage

Data for calibration; up-

scaling of processes

Need more demonstration

projects

Storage Engineering

Local-scale capacity Portfolio of

storage environments

Injectivity

Monitoring

Need for testing and improvement of technologies?

Results from Frio & Nagaoka

Long-term monitoring and verification data

Detection of leaks - Cost-effective monitoring techniques

Need more demo projects.

Verification of

storage -

Regulations Lack of proper

regulatory framework

Draft legislations in Australia, US, Europe (WY?)

Final legislation and trading

schemes

Economics Cost for storage projects not well

known

Comparability of different cost

estimates

Economics depend

significantly on location and legislation

Risk/Operation safety

Lack of quantitative

methods

Need for protocols for storage

duration and safety

Best Practice Manual(s)

red = significant road block; orange = substantial research gaps, but not crucial for commercial application; yellow = some research needed, but depends largely on new data from large-scale injection projects for verification; green = sufficient knowledge, might need minor improvements & consistency.

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Expert Review Comments The draft report was sent to a panel of expert reviewers, and the comments received back were extremely complimentary. In particular there was an agreement amongst the reviewers that the report provides a timely, well-written overview of the current status of CO2 storage in saline aquifers. Most of the comments received addressed typographic errors or minor discrepancies in factual information. Some of the more significant comments centred on estimation of storage capacity, in particular the alternative approaches of evaluating entire saline formations or only structural traps. Other comments included:

• Storage formation heterogeneity can improve trapping, but can also have a negative effect by allowing bypass of potential storage zones and slowing of contact with unsaturated formation water,

• Scalability of monitoring technologies needs to be considered, given the difference in size between pilot and commercial projects,

• Selection of monitoring technologies should be partly dependent on site-specific circumstances; and many cost-effective technologies can already be employed for particular scenarios e.g. pressure monitoring. Furthermore, expensive techniques (e.g. 3D seismic) may not always provide useful data and this needs to be borne in mind when regulations are drafted,

• Capillary entry pressure may be an important factor for consideration in terms of caprock integrity,

• Generic indicators of storage site suitability should not be confused with ‘cut off’ criteria; for example, several storage targets in the Williston Basin of the USA are relatively low-permeability formations.

Conclusions

The study has demonstrated that considerable progress has been made in addressing the knowledge gaps pertaining to CO2 storage in saline aquifers, as identified in the 2004 IPCC SRCCS. However, some of these knowledge gaps still require further research.

Nevertheless, the identified knowledge gaps are not considered barriers to injection projects; indeed, more widespread injection projects are required to demonstrate aquifer storage and allow calibration of predictive models. Further development of ‘Best Practice’ manuals for aquifer storage needs to focus on an increasing number of case study injection sites across different geographic regions.

The report concludes that geological storage of CO2 in saline aquifers can be regarded as a proven technology; the most significant barrier to wider commercial uptake of aquifer storage is the continuing absence of regulatory frameworks. However this is a gap that is being addressed in Europe, Canada, USA and Australia.

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Recommendations

Future research into storage of CO2 in saline aquifers, including IEA GHG studies and research network activities, should be guided by the knowledge gaps identified by the study. Current IEA GHG activities are addressing these gaps in a number of areas:

• A study on the use of setting and use of coefficients to refine regional storage capacity estimates has been commenced in September 2008. This study will draw on modelling and field experience from around the world and build on the output and findings of the CO2CRC report,

• Wellbore integrity issues are being addressed through a study being undertaken by TNO on behalf of IEA GHG, in addition to the ongoing work of the research network,

• Leakage scenarios will continued to be considered by the risk assessment network,

• Knowledge gaps in storage science, concerning the need for improved understanding of geochemical processes and application of coupled predictive models, will be key topics for discussion at the forthcoming IEA GHG modelling workshop,

• IEA GHG is co-funding a study on site characterisation by DNV that aims to develop qualitative ‘best practice’ procedures, whilst a second proposed study will consider quantitative criteria,

• The IEA regulators network is providing an important contribution to the rapid development of regulation in various parts of the world.

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1


STUDIES IN PROGRESS AND PRIORITISATION OF NEW STUDIES

Studies in progress Studies that are expected to be published between the 33rd and 34th meetings, studies that will be underway at the time of the 34th meeting and studies that are outstanding are summarised below. An updated summary will be presented at the meeting. Table 1 Studies published since the 33rd ExCo meeting Title Contractor Report

numberPublication

date Regional Assessment of CO2 storage: Indian subcontinent

BGS 2008//2 May 2008

CO2 capture in the cement industry Mott MacDonald

2008/3 August 2008

Production of Hydrogen and electricity with CO2 capture – updated economic analysis

Foster Wheeler

2008/9 August 2008

Table 2: Studies underway Title Contractor Scheduled

publication date Fuel cells for combined heat and power Jülich Research

Institute

October 2008 CO2 pipeline transmission costs AMEC/Gastec October 2008 Operating flexibility of power plants with CCS Univ. of Waterloo October 2008 Removal of impurities from CO2 Advantica November 2008 Assessment of sub-sea ecosystem impacts MBARI November 2008 CCS and CDM ERM November 2008 Assessment criteria – TAG EPRI December 2008 Safety considerations for CCS HSL December 2008 Novel approaches to improving capture Innovaro December 2008 Aquifer storage development issues CO2CRC December 2008 Improved solvent scrubbing processes SINTEF January 2009 Prospects for storage of CO2 in gas fields Poyry

March 2009 Site Characterisation Criteria TBC March 2009 Long term integrity of storage – well abandonment

TNO March 2009

Prospects for storage of CO2 in EOR ARI June 2009 Storage capacity coefficients EERC June 2009 Best practise guidelines on site characterisation DNV JIP July 2009 CCS Life Cycle Analysis – Literature review Jülich Research

Institute August 2009

Use of biomass with CCS – part 1: combustion processes

Foster Wheeler October 2009

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2

Table 3: Studies outstanding awaiting start Title Proposal number Retrofit and repowering with CCS 31-3 Capture of lower fractions of CO2 32-2 Building the pipeline infrastructure 32-5 Integration of post combustion CCS in existing industrial sites 33-5 Corrosion and selection of materials for CCS 33-9 Prioritisation of new studies 11 proposals for new studies were sent to members and sponsors for voting. These consisted of:

• 3 proposals re-submitted from the previous round of voting, with modifications • 8 new proposals produced by the Programme Team

Members were asked to vote for up to five of the proposals and indicate their first choice. Votes were received from 26 of the 39 members and sponsors, representing a 66% return of votes which is consistent with previous voting rounds. The table shows the total number of votes received, the number of ‘first choices’ and a weighted number of votes, in which the first choice vote is assumed to be equivalent to 2 votes. Some members did not indicate a first choice. Proposalnumber

Title Votes First choices

Weighted votes

Proposals selected for presentation 34-6 Quantification techniques for CO2 leakage 25 5 15

34-2 Incorporating future technological improvements in existing CO2 capture plants

22 4 14

34-4 Injection Strategies for CO2 Storage Sites 22 2 18

34-3 Evaluation of the water usage and loss of power plants with CO2 Capture 18 3 12

Other proposals 34-9 Roadmap for commercial implementation 13 1 11

34-10 Financial mechanisms for long term CO2 liability

13 1 11

34-7 Monitoring techniques for other substances mobilised by CO2 storage in geological formations

12 2 8

34-5 World CO2 Storage Atlas 10 1 8 34-8 Capacity constraints for CCS deployment 10 1 8 33-11 CCS and sustainable development 7 0 7 34-1 Capture from LNG production facilities 4 0 4 Four proposals received significantly more votes than others (18 or more weighted votes), Beyond that the voting is closer with two studies receiving 13 weighted points, one with 12 and 2 with 10. Two studies scored low with less than 10 weighted points only. Both these studies were returned for voting from the previous meeting and both scored low at the previous, neither received any members first choices.

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3

After reviewing the outstanding studies awaiting tendering, our current study commitments and considering that we have two series of studies underway (biomass with CCS and methodology development) will be able to take on 4new studies. Outline specifications for the four studies which received the most votes have been prepared for members to consider at the meeting. Following the presentations of the outline study specifications, the Committee will be asked to decide:

i) Should the Programme proceed with these studies? ii) Do the outline specifications of the studies properly describe the work

required? iii) Which of the proposals not selected in this round of voting should be re-

submitted in the next round? Regarding the resubmission of proposals we would propose that the two bottom studies (34-1 and 34-11) do not go back into the voting round for next time. However those studies with 10 to 13 weighted points should go back into the next voting round since there was considerable interest from members in voting for these studies and all received first choice votes.

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INCORPORATING FUTURE TECHNOLOGICAL IMPROVEMENTS

IN EXISTING CO2 CAPTURE PLANTS Introduction CO2 capture processes are expected to improve significantly in future due to ‘learning by doing’ and development of new technologies. Technology improvements will increase the future competitiveness of CCS but the prospect of such improvements may inhibit near term investment in CO2 capture plants because companies will not want to lock-in to technologies which may become obsolete, especially as capture plants could have long lives, e.g. 40 years. This could be a major barrier to deployment of CCS. If it could be demonstrated that significant technological developments, such as new solvents, could in future be retrofitted to early CCS plants, the perceived risks of building early plants would be significantly reduced. This would help to facilitate the construction of the capture demonstration plants and the tranche of second-generation CCS plants which will be necessary to obtain operating experience, to improve confidence in CCS and reduce costs through ‘learning by doing’. It is proposed that IEA GHG should undertake a study to assess the potential for retrofitting possible future technological improvements into early CCS plants. The ability to retrofit future improvements may be improved by making some minor pre-investment. In this respect the proposed study could be considered to be an extension of IEA GHG’s influential study on CO2 Capture Ready Plants (report 2007/4). To limit the cost of the study it is proposed that it should focus only on post combustion capture but it could be extended at a later date to other capture technologies in a subsequent study if this is considered to be worthwhile. Outline description of the study Base case plant definition

• Review the technologies which are likely to be used for post combustion solvent scrubbing plants built in the near future.

• Produce flowsheets, heat and material balances, equipment sizes and costs for a representative first generation commercial-scale amine scrubbing plant in a new supercritical coal fired power plant.

Incremental improvements in amine scrubbing

• Potential improvements in post-combustion capture technology will be identified in consultation with experts. The main improvements are expected to result from use of new solvents, which could result in for example: - Reduced steam requirement for regeneration - Increased solvent loading - Reduced temperature of regeneration - Increased regeneration pressure - Greater ability to tolerate flue gas impurities - Reduced solvent losses - Reduced corrosion Other potential improvements include:

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- Increased equipment sizes - More efficient or lower cost column packings - Improved/lower cost materials of construction - More efficient energy integration - Improved CO2 compressor designs

• The impacts of each of the potential improvements on the performance and costs of

future new CO2 capture plants will be quantified.

• Timescales for future improvements will be estimated.

• The extent to which each of the potential improvements could be retrofitted to first generation capture plants will be quantified and the costs and benefits of retrofit will be estimated.

• Plant design changes or pre-investments which could be made to make it simpler to

retrofit future technological improvements will be identified and quantified.

• Plant lifetime costs of various cases will be assessed, for example: - Current technology plant with no future retrofits. - Plants with retrofits based on various scenarios of future technological

improvements. - Plants with pre-investments to facilitate future retrofits.

Radically different capture technologies

• Some processes that are substantially different to current amine scrubbing may become commercially available in future, for example chilled ammonia scrubbing, membrane processes or processes involving solid sorbents. As far as possible such processes will be identified and the extent to which equipment from an amine scrubbing plant could be re-used will be assessed. This assessment will be less detailed than the assessment of incremental improvements to amine scrubbing because of the greater uncertainties and possible shortage of detailed process data.

In the current uncertain economic climate it is expected to be difficult to obtain accurate cost data but that will not prevent this study from being undertaken. The main issue is the relative costs of current and future technologies, rather than the absolute costs. Links with other proposed studies IEA GHG considers this to be an important study to follow on from its Capture Ready analysis. Proposal It is proposed that a study should be carried out to assess incorporating future technological improvements into existing CO2 capture plants.

RESOURCES REQUIRED Financial Project management Average / Greater than average Average

The committee is requested to i) Approve proceeding with this study. ii) Suggest possible contractors iii) Suggest possible expert reviewers for the completed study

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EVALUATION OF THE WATER USAGE AND LOSS OF POWER PLANTS WITH CO2

CAPTURE

Introduction: A recent publication of Greenpeace [1] has highlighted that widespread utilization of CCS would result in an additional consumption of 2 to 4 billion gallon of water per day. Unfortunately, this figure was taken out of context from a US DOE report [2] without any consideration of technologies that could be available in reducing water consumption. Furthermore, the US DOE report [2] quoted by Greenpeace has not accounted for the water gained in the storage operation. The primary purpose of this study is to thoroughly document and to provide baseline information on water usage and loss from power plants with CO2 capture based on the methodology adapted from previous study done by US DOE [3] which accounts for the water consumption of every major unit process and operation of the power plant. It should be clearly stressed that this study only deals with the 1st half of the equation. An initial assessment of water usage and loss for transport and storage will be undertaken in the near future and further study on this topic with relevance to any CO2 storage maybe recommended as a follow up. Scope of the Study: The previous study by US DOE [3] has provided baseline cases and a methodology for assessing water usage and loss in various types of power plants technologies. This includes IGCC plant based on E-Gas, GE (Quench & Radiant) and Shell technologies, sub-critical and supercritical PC boiler and an NGCC. All of cases studied do not include CO2 capture processes. Based on the methodology to be adapted from the US DOE report [3], an initial assessment of water usage and loss from power plants with CO2 capture will be undertaken using data available in previous IEA GHG reports [4, 5, 6, 7]. Essentially, this study will attempt to evaluate the water usage and loss of the following cases:

• Case 01: Ultra-supercritical (USC) PC fired power plant with post-combustion capture. • Case 02: Ultra-supercritical (USC) PC fired power with oxy-combustion technology • Case 03: IGCC power plant with CO2 capture based on GE Quench Technology • Case 04: IGCC power plant with CO2 capture based on Shell Technology • Case 05: NGCC power plant with post-combustion capture.

Specifically, the scope of the study shall include the following:

(a.) A review of the current state of the art technologies that could reduce water consumptions in power generation.

(b.) A detailed evaluation of water usage and loss of reference power plant with USC technology.

(c.) A detailed evaluation of water usage and loss of power plant with CO2 capture. (d.) For Case 01 or Case 02, a more detailed assessment of water usage and loss based on

location (i.e. inland versus coastal), type of cooling technologies (wet-dry cooling versus

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dry cooling versus once through) and coal types (bituminous versus lignite) would be evaluated.

The following information would be expected:

(a.) Overall performance of the plant, (b.) Overall water balance of the plant, (c.) Water balance of major units with significant water consumptions, (d.) Overall raw water usage of the plant, (e.) Breakdown of water loss (i.e. process water loss, flue gas loss, cooling tower loss).

References:

[1] Greenpeace (2008) False Hope – Why Carbon Capture and Storage Won’t Save the Climate.

[2] US DOE – NETL (2007). Estimating Freshwater Needs to Meet Future Thermo Electric Generation Requirements.

[3] US DOE (2005 & 2007). Power Plant Water Usage and Loss Study. [4] 2005/9: Oxy-Combustion Processes for CO2 Capture from Power Plants [5] PH4/19: Potential for Improvement of Gasification Combine Cycle Power

Generation with CO2 Capture. [6] PH4/33: Improvement in Power Generation with Post-Combustion Capture of

CO2. [7] 2006/1: CO2 Capture in Low Rank Coal Power Plants

Action

It is proposed that a study should be carried out to assess the water usage and loss of a power plant with CO2 Capture. The committee is requested to:

1. Approve proceeding with this study 2. Suggest possible contractors 3. Suggest possible expert reviewers for the completed study

Financial and project management resources would be available from the technical studies budget. For members reference the following resources are likely to be required for each study agreed.

RESOURCES REQUIRED

Financial Project management Above Average Average

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INJECTION STRATEGIES FOR CO2 STORAGE SITES

Introduction The design of injection systems is a key factor in the planning of CCS projects. Injection wells are likely to form a major part of costs for most storage scenarios, and their design needs careful consideration to ensure efficient use of available storage capacity through achievement of optimal injectivity. This study proposal has arisen from a suggestion by ExxonMobil, which has been adapted to incorporate elements of a previous IEA GHG study proposal on well injectivity. Outline Description of the Study This study will consider the various parameters that influence injectivity and site storage capacity, including:

• Storage formation characteristics, permeability variations, heterogeneity • Relative permeability of CO2 with in-situ brine/fluids – this has been found by

previous studies to be a key parameter in relation to injectivity • Trapping mechanisms and fate of injected CO2 • Pressure effects and caprock integrity • Numbers, spacing and orientation of wells • Well drilling and completion methods • Remedial options for poor injectivity

The study will consider saline aquifer, depleted gas field and oilfield/EOR storage scenarios, with reference to experiences gained from existing pilot or industrial operations. Detailed case studies, based on field experience and/or predictive modelling and design, may be utilised to illustrate the principles involved. The study should also consider technical aspects of CO2 injection well design, drilling and installation, with accompanying information on costs. It is envisaged that information and data can be sought from various pilot, demonstration and commercial projects where CO2 injection has already taken place or is being planned. Historic cost data could be converted to 2008 rates with the use of cost escalators, e.g. for drilling and cement/tubulars. Cost analysis should be considered in the context of the main storage scenarios, i.e. saline aquifer, depleted oil/gas or CO2-EOR, and for both onshore and offshore environments. A potential deliverable of the project would be a software tool to allow estimation of injection well costs, which could be made available online in the future. A further aspect that can be considered by the study is the suitability of existing oil/gas production wells to be reused for injection into depleted fields. The potential cost benefits are very significant and such reuse of existing infrastructure has been considered for many scenarios, for example CO2 injection into depleted gas fields in the southern North Sea. This option may be particularly attractive in cases where existing oil or gas pipelines are suitable for CO2 transport. The study will aim to produce a ‘high level’ overview of injection strategies, technologies and associated costs for the 3 main storage scenarios, with conclusions and recommendations relating to principles for the design of injection systems. The study will also aim to highlight

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gaps in research, development and demonstration. IEA GHG is planning to hold a modelling workshop, in conjunction with Schlumberger and BRGM, in early 2009 and this study may be able to draw upon the findings of that meeting. The study has significant links to other recent or ongoing IEA GHG studies:

• Development Issues for Saline Aquifer Storage (CO2CRC) • Best Practice Guidelines on Site Characterisation (Ongoing, DNV) • CO2 Storage in Depleted Gas Fields (Ongoing, Poyry) • Storage Capacity Co-efficients (Ongoing, EERC) • Wellbore Integrity (Ongoing, TNO) • CO2 – EOR (Approved, contractor not yet appointed)

Detailed assessment of well abandonment techniques and costs is not considered to be part of the study; however, the study should make reference to the conclusions of the IEA GHG study on wellbore integrity (TNO) in terms of materials and any other CO2-specific requirements for well installations, that may impact on drilling and installation design and cost. The study will require a contractor with oil/gas industry experience, proven expertise in storage science and modelling of CO2 injection, thorough knowledge of well technologies and prior experience in design of CO2 injection strategies. The study will be of benefit to members and sponsors, and the wider CCS community, in providing a reference document for the design of CO2 injection systems and estimation of associated costs. It is anticipated that the study could contribute to future ‘Best Practice’ manuals or guidance. Proposal It is proposed that a study should be carried out to determine injection strategies for CO2 storage sites. The financial resources are expected to be average.

RESOURCES REQUIRED Financial Project management Average or above average Average


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QUANTIFICATION TECHNIQUES FOR CO2 LEAKAGE

Introduction Focus to date has been on monitoring techniques to monitor CO2 plume behaviour in storage formations and to detect leakage to the biosphere onshore and to a lesser extent offshore. However for emissions trading and for national GHG inventory purposes it is necessary to quantify leakage amounts to atmosphere, should leakage occur. However, there is a low level of understanding of capabilities, accuracies and uncertainties of measurement techniques for this application. The IPCC Guidelines for GHG Inventories state that leakage from seabed to the water column counts as leakage to atmosphere, so this will be included in the scope here. Quantification of leakage was identified by the IEA GHG Joint Network meeting as a significant gap in the coverage and knowledge base of the three storage networks. To assist the Monitoring Network to identify future research focus and needs in this area, it is necessary to review what the current capabilities are of techniques which can quantify leakage, and identify research needs. This issue has also arisen in both the EU ETS work on monitoring and reporting guidelines for CCS and in the EU CCS Directive working group. Both have concluded that there is insufficient knowledge in this area, and are likely to develop regulation or guidance without an appropriate evidence base. The recent IEA GHG Environmental Impacts of Leakage workshop held in the UK in September 2008 (see paper GHG/08/55) showed from monitoring studies on natural CO2 leakages that there is the potential for quantitative measurements to a level of accuracy which may be required, although inconclusive as this perspective had not been the researchers’ objective. Study Outline The primary aim of this study will be to review the potential methods for quantifying CO2 leakages from a geological storage site from the ground or seabed surface. The study will first identify a required level of accuracy, using for example the accuracy and uncertainty requirements of the EU Emissions Trading Scheme, which works in units of tonnes per year CO2 and which will conclude on uncertainty levels require for leakage from geological storage by late 2008. The study will be required to review both onshore and offshore methods. The methods reviewed should include techniques for point-source as well as dispersed CO2 leakage scenarios. Point-source based techniques will be appropriate when the location of the leak is very localised and known. Potential mentoring techniques may include gas traps and collection chambers where high levels of measurement accuracy are possible. These techniques will have to be used in conjunction with dispersed CO2 monitoring techniques as they will be more appropriate for monitoring large areas and identifying where point-source based techniques may need to be applied. These techniques will also be required in cases where the CO2 leakage itself in from a dispersed source. In this case techniques should be reviewed for monitoring over a large area and for flux estimation in order to quantify the volume that is leaking. Dispersed CO2 monitoring techniques could include eddy covariance tower, airborne remote sensing, vehicle mounted sensors, etc.

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Once a portfolio of potential monitoring techniques has been identified the study should further review each technique and discuss:

• Its current and possible applications (including point source and dispersed leakage). This should include a discussion of when and where the technique has been applied, both in the CCS industry as well as in other industries. It should also discuss how it has performed when applied including any specific strengths and weaknesses.

• Sensitivity, resolution and uncertainties. This is key for the quantification of CO2 leakage in particular for CO2 accounting. The study should also review any ongoing research with each technique and possible options to improve the sensitivity and resolution and decrease uncertainties. This will be particularly important in CO2 markets which may force operators to declare leakage as the upper bound of the monitoring resolution.

• Cost both Cap X and Op X. An appropriate monitoring programme will have to meet both regulatory requirements and budgetary requirements of the operator. The study should review any ongoing research with each technique and possible options to reduce the costs associated with each technique.

• Future developments. The study should look at any new novel monitoring techniques that may help or improve the process of CO2 leakage quantification. Included in this is an estimation of the timeframe until the techniques become available and potential costs and accuracies when they do.

It is intended that the contractor for this study will have a thorough understanding of CO2 monitoring and measurement technologies and techniques. The scope of this study would be to review the different technologies and techniques for both onshore and offshore applications. It is expected that as well as a study report the contractor should be prepared to present the report and results at the IEA GHG Monitoring Network meeting in Japan in May/June 2009. It is expected that the contractor will liaise with BGS who are currently updating the IEA GHG Monitoring Selection Tool to ensure results from this study are reflected in the tool. The best review of monitoring techniques that is widely used is the UK Department of Trade and Industry (DTI) Technology Status Report on CO2 Monitoring Techniques (2005). However, this does not cover the leakage quantification perspective, and this work will therefore compliment the DTI report. Past IEA GHG Monitoring Network meetings and the Leakage Impacts meeting should also be reviewed for monitoring techniques that may be relevant to this study. Proposal It is proposed that a study should be carried out to determine quantification techniques for CO2 leakage. The financial resources are expected to be average.

RESOURCES REQUIRED Financial Project management Average Average


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MEMBERS IDEAS FOR FUTURE STUDIES

Members are invited to suggest their ideas for future studies that could be considered in future voting rounds

NOTES

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NETWORK MEETING FEEDBACK

Introduction Three novel meetings have been held since the last ExCo. A Joint Network meeting of the three storage related Networks (Monitoring, Risk and Well Integrity) was held in June in New York. The second Finance Workshop was held in New York in May. A workshop on Environmental Impacts of Leakage was held in September in UK. The main outcomes of each will be summarized below. Joint Network Meeting This year the IEA GHG held the inaugural joint meeting of its three storage focused International Research Networks – the Risk Assessment Network, the Monitoring Network and the Wellbore Integrity Network. The event was held from the 11th to the 13th of June in New York, USA and was hosted by the US Environmental Protection Agency with support from EPRI and Oxand. The aims of the meeting were; to ensure that the current Networks are working in the most efficient way without duplication or gaps between the Networks, to identify common areas that require the input from more than one network to see how this collaboration could be done in the most effective way, and ultimately to set the framework for the future direction of the networks, both individually and as components of the overall storage programme. Finally, the joint network was asked assess the merit of a Modelling Network as a potential forth IEA GHG storage network. The three day meeting commenced with overviews from each of the networks followed by network breakout groups to discuss and add to the opening network overviews. Day two of the meeting saw a presentation on current modelling activities both within and external to the networks with subsequent discussions on the merit of a new modelling network. The second half of day two saw the attendees split into four mixed groups to discuss the different phases of the CCS life cycle; site selection and permitting, site operation, site closure and finally post closure. The purpose of this cross-network breakout session was to get the attendees thinking outside the bounds of their individual network to identify possible topics that are currently not covered in the existing network structure. The final day of the meeting saw people return to their network groups to discuss their future work program in light of the previous day’s discussions. Each network presented their final summary of the meeting with the main focus being on what issues to address in each network. These summaries will now feed into the organising committee discussions for the next network meetings. In particular cross network issues will be identified and discussed. In the final wrap up session from the IEA GHG a number of conclusions were drawn on the other issues discussed by the network; primarily the addition of a modelling network and how to improve the network process and their communication. In regard to the discussion of the proposed modelling network, the IEA GHG proposed an initial scoping study and preliminary meeting on modelling for the 2008/2009 period. The study and meeting will focus on reservoir and cap-rock modelling with the other modelling applications being covered in the existing networks. Modelling is inherently and closely linked to other networks and the potential continuation of a new network will be reviewed following the preliminary scoping study and meeting.

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In regard to improving the network process a number of proposals were made for new networks including, a CO2 infrastructure safety/risk network and a site characterisation network. The IEA GHG currently has two studies underway looking at these topics and will review the need for these networks following their completion. To improve communication between the networks and external stakeholders there were a number of proposals made. The suggestions include:

• Annual co-ordination of the steering committees where the agendas of each of the network meetings can be discussed and set questions/objectives for each other’s meetings can be arranged.

• Network oriented reports from each network meeting on “learning points” for other networks. These would formalise the feedback and communication lines between networks.

• Cross-network working groups; set up to address specific issues for a limited time and with a limited remit.

• Linked network meetings; could be arranged over three days with each network having one individual day and one common day where cross-network issues can be discussed

• Future joint meetings; held regularly. These could be held every 3-4 years in person or more regularly via the internet.

• Closer coordination with those network members who interface with regulators – identify and anticipate key issues for networks to address

• Networks to input to IEA CCS Regulators network • The networks could better identify, support and include experts that advise regulators

Environmental Impacts of Leakage Meeting In 2007, IEA GHG published a report by BGS on the potential environmental impacts of leakage. The report identified the existence of key knowledge gaps in the industry, and one recommendation of the report was a workshop to define R&D needs to address these gaps. The workshop was held at BGS from 15-17 September. Approximately 30 experts attended. Presentations were given on regulators views (EU and US), industry views, monitoring techniques, results from experiments on natural leakages (onshore and offshore), results from experiments on experimental shallow leakage (ZERT in USA and ASGARD in UK), system modelling, and marine impacts. A meeting report will be drafted shortly and published. The key outcomes are as flows below. Key gaps in knowledge identified included: • Some measurement techniques appear to be detecting leaking CO2 quantities down to a few tonnes

pa, in the region of requirements for inventories and ETS. This merits further investigation from this perspective.

• Near-surface transport mechanisms need further understanding, including the links between reservoir and surface.

• Reference list of target species are required, with data on effects. • Effects on ecosystems of coupled multiple stressors. • Better understanding of areal scales to be considered. • Need for more information on leaking CO2 effects on clathrates. • Development of monitoring techniques for environmental impacts. • Integration of impacts monitoring with risk management. • Definitions of ‘significant’ impact for different ecosystems and species are required.

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Overall key messages: • More learning from analogues is required – i.e. from experiments and measurements on natural CO2

leakages. A database of projects on natural analogues, and the results provided, would be very useful. • Some learning cannot be done with analogues or experimental tests, only from real CO2 storage

activities, e.g. displacement of saline water, impacts on ground-water, effects of other substances, testing system models with real data.

• Real CCS projects would also provide the learning by example for the regulatory area of Environmental Impact Assessments (EIA/SEA/EA etc), e.g. what level of detail is required?

Recommendations for action: • The findings of this workshop should be fed into the IEA GHG Risk and Monitoring Networks

meetings. • In order to learn more from natural analogues of leakage, there should be a series of activities to bring

together researchers, share learning and coordinate. These could be to establish a database of research on natural analogues of leakage, to hold a larger workshop with more environmental/ecosystem specialists.

• The IEA GHG is publishing a glossy report on learning from natural analogues for storage. It is proposed to use this report, together with this meeting’s report, as the prompt and input for a larger workshop focussing on the studies around natural CO2 leakages. This workshop could then provide the kick-off for an exercise to create a database of projects and experiments on natural CO2 leakages.

Financing CCS The Expert Meeting on Financing Carbon Capture and Storage (CCS) took place on the 28th and 29th of May this year in New York, USA. This meeting was a follow up to one that was held in London during 2007. The meeting was by invitation only and limited to 80 people including representatives from Governments, industry, insurance, financial institutions, academia and research organizations. The meeting was organized by the IEA Greenhouse Gas R&D Programme, the IEA Clean Coal Centre and the World Coal Institute with the support of Chevron. The main purpose of the conference was to provide a clearer picture of the options available to finance CCS projects in North America and to increase the involvement of experts from the financial sector in discussions about possible financial instruments applicable to CCS. The objectives of the meeting were:

• Identifying key drivers on financing CCS projects in North America by the financial sector. • Contributing to building financial mechanisms for deployment of CCS projects • Gaining access to financial information relevant for all major stakeholders such as industry,

insurance companies, Government and investors in CCS projects • Use of futures, derivatives and insurance markets to reduce financial risks of CCS deployment • Improving the awareness of the status of CCS technology within the financial community • Use of insurance to address the financial risks of CCS demonstration plants

An important outcome is that many of the speakers thought the difficulties and issues surrounding CCS can be resolved. However, from a private investment viewpoint CCS in North America was a financially unattractive option without Government incentives and a legal framework in place. There was also a general consensus that if the USA implements an emission trading systems that the revenue generated would need to be put towards CCS as relying on a market derived carbon price alone would still not be enough to make CCS a financially viable option in the near to medium term. The discussions on financing CCS projects have matured since the meeting in London last year. It is important to recognize that there has been progress, but a lot is still needed to establish CCS projects built

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in terms of regulations, insurance and practical experience in stakeholders operating CCS plants. It is also important to note that while there has been considerable work and interest in CCS and there are also a lot of players ready to move forward, there is a need for urgency and direction from Governments. In order to move forward Governments will need to have robust CCS policies that provide certainty to investors and allow for the deployment of CCS projects. In addition, Governments will also need to provide financial support for the first CCS projects.

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PROPOSAL FOR A NEW NETWORK ON CHEMICAL LOOPING CAPTURE

TECHNOLOGY

In-situ carbon dioxide capture technology (alternately known as chemical looping) is based principally on the use of calcium oxide or similar reactive materials to capture and then regenerate CO2. This is generally done at very high temperature and the use of two coupled circulating fluid beds for carbonation and subsequent calcination. The technology is becoming of increasing interest because it has the potential to capture CO2 from coal fired steam power plant flue gases with reductions in energy efficiency theoretically as low as 4% and also because the technology has now started to progress to the multi MW pilot plant scale.

For the last four years, a small international in-situ CO2 removal (ISCR) workshop has been held by the academic and research community. Mike Haines from the IEA GHG staff attended the last workshop in June 2008 at Imperial College London and has been discussing with the organisers the possibility of continuing the workshop meetings as an IEA GHG specialist network event. The organisers of the current workshop series consider that having IEA GHG on board would have the advantage of giving the technology and research programme wider exposure and would draw in contributors from industry. IEAGHG would assist by providing registration services and posting presentations at our website. An overview report of the network proceedings would be prepared by IEAGHG staff for distribution to members

The main involvement envisaged for IEA GHG is a limited amount of staff time and travel costs to attend meetings. Currently the ISCR meetings are self financing and the expectation is that this will continue. In the future there may be a possible commitment for IEA GHG to provide some limited financial support for the events if they grow substantially in size.

The next workshop which would be the first as an IEA GHG network would be in Spain probably at CSIC in Zaragoza. IEA GHG believes that this In-situ CO2 removal series would complement its other capture networks on post combustion capture and Oxy-fuel combustion. The costs involved are considered to be lower than the operation of an existing network activity. The technology itself show promise and is now starting to move to the pilot scale and it is an opportune time for IEA GHG to work with this group to help develop the network. IEA GHG members will benefit by getting information on a promising new technology development in the field of CO2 capture.

Action

ExCo members are asked to approve IEA GHG taking over the existing In-situ CO2 removal workshop series and running it in the future as an IEA GHG network with the commitment of the necessary IEAGHG staff time and resources.

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INTERNATIONAL SUMMER SCHOOL ON CCS

Earlier this year the IEA Greenhouse Gas Programme in conjunction with the University of Regina held the second IEA GHG Summer School on CCS. The event was held at Tigh-na-mara Seaside resort, on Vancouver Island, Canada between the 24th and 30th August. The meeting was sponsored by also Natural Resources Canada and a number of local sponsors including ConocoPhilips, Suncor, Golder Associates and the Alberta and Saskatchewan Governments. The summer school series is supported by a number of IEA GHG members including; The Research Council of Norway, BP, Gassnova, Schlumberger, StatoilHydro, E.On, and Alstom. The summer school covered every aspect of CCS including technical information on capture, transport and storage of CO2, and non-technical issues such as economics, regulation and public acceptance. The programme for the school included morning lectures followed each day by group work. The presentations included one by Gary Lunn, the Minister of Natural Resources Canada, who came in for the final day of the event to speak and field questions about what Canada is doing with CCS. His inclusion in the programme was a highlight of the week and even managed to make the local papers. The group work involved groups of ten students who were each given a question relating to the application of CCS and over the course of the week each group had to prepare a presentation which they gave to the rest of the attendees. Sixty students from twenty-five countries were selected to attend the event from over one hundred and twenty applicants. Students were selected from various backgrounds including engineering, science, economics and politics. All students were either in PhD or Post Doc studies and most were working on topics relevant to CCS. In addition to the sixty students, five students who attended the summer school last year were invited to attend again as student mentors. Included in the student mentors were the three student award winners from last year including Patricia Seevam who not only mentored but also gave an excellent presentation on CO2 Transport to the group. Twenty-five experts from the international CCS industry also attended the summer school to give the presentations and to act as mentors for the students to provide support during the group work and assist them with the direction of their discussions and the sourcing of information. Without the support of the experts the summer school could not have been the success it was. On the final day of the event the experts were called upon to select the outstanding students of the week. The best student award was given to the students who contribution to the event was seen to be outstanding. This assessment was made across every aspect of the week, including input to the lectures, the group work and during the social programme. The students selected will return to the 2009 summer school as student mentors with all their costs covered by the school. The best students selected this year were, Gareth Johnson from the University of Calgary and Mairi-Jane Fox from the University of Edinburgh. Following the summer school a feedback form was circulated to all the students involved to gauge how they felt the summer school went and how the series could be improved for the future. The feedback received was very positive with students really enjoying the experience and finding their time at the event extremely valuable. One negative highlighted was the remoteness of the location which made the transit to and from the venue quite difficult and

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lengthy in some cases. This feedback has been incorporated into the Summer School Host Briefing pack that has been developed by the IEA GHG. The Host Briefing pack has been developed incorporating the lessons learned and student feedback from the first two summer schools and will ensure the successful continuation of the IEA GHG Summer School series. The 2009 summer school will be held in August just outside of Melbourne, Australia in conjunction with the CO2CRC. Registration of applicants for the summer school will commence in January 2009 following the announcement in the next edition of Greenhouse Gas Issues.

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FEEDBACK ON IEA ACTIVITIES - INTERACTIONS WITH IEA REGULATORS NETWORK

Introduction The IEA CCS Regulators’ Network was launched on 13 May 2008. The objective of the Network is to provide regulators and policy makers with opportunities to interact with peers in an objective, neutral forum. The Network involves regulatory and policy practitioners from a variety of areas of expertise, from local, state/provincial, national, regional and international levels. Network participant’s present case studies and status updates, ask questions, and discuss possible solutions to challenges they face developing adequate CCS legal & regulatory frameworks. The launch meeting of the International CCS Regulators’ Network was held on 13-14 May, 2008 at the IEA Secretariat, Paris, France. IEA GHG and University College London were co-organizers with IEA. The launch meeting was significantly oversubscribed, indicating the strong demand for such an activity, and some 100 regulators and associated experts attended. Twenty one presentations were given, from international overviews to national developments, and two discussion sessions were included. IEA GHG gave two presentations, including the scene-setting international developments and principles for CCS. The main concluding points in the discussions were as follows: • Significant regulatory developments have occurred and have established basic key principles

for the treatment of CCS, and development of regulation is progressing rapidly in some regions such as the EU, USA and Australia.

• The Network is filling an important gap by focusing on detailed regulatory issues that benefit

from increased international collaboration. The IEA should not dilute this focus by including broader CCS issues like tracking demonstration projects or surveying public opinions about CCS.

• The legal and regulatory challenges faced by regions, countries and even sub-national

jurisdictions are not uniform and a “one size fits all” approach will fail to account for differences in political traditions, regulatory regimes, surface and subsurface rights, and socio-economic development. There is, however, clear value in establishing a forum for dialogue amongst regulatory officials from around the world to exchange views and lessons learned.

• The Network should be expanded to include new members, most importantly government

representatives from rapidly growing regions like China, India, Russia and other emerging economies to help them think through the needs and models for CCS policy and regulation. A representative from India asked for assistance in presenting appropriate policies to the government.

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• There was some discussion about the need to harmonize international guidelines, e.g., for monitoring & verification of CO2 retention at storage sites. Some felt the IEA and the Network should strive to achieve harmonization and best practices; others felt that this was an impossible task and would limit the Network’s effectiveness. The IEA will attempt to capture case studies and document them rather than to focus primarily on best practices or harmonization.

• In terms of specific topics for future web conferences, site selection methodologies, CO2

transport and storage health & safety issues, liability frameworks, particularly for the long-term and formal public consultation methods and tools (as opposed to public opinion taking) were raised. Some of these areas are being covered by IEA GHG, and the close cooperation between IEA GHG’s more technical programme and this network’s regulatory programme should ensure that work is not duplicated and information is shared and used most efficiently.

• It was concluded that the Network was a good initiative, and that meetings should be held again,

perhaps annually, along with making their information/presentations available on the IEA web site, and that web conferences on specific focussed topics should be held at more frequent intervals.

All presentations and the summary report of the meeting are available at http://www.iea.org/textbase/subjectqueries/ccs_network.asp . Web conferences The launch meeting was followed by the first in a series of interactive web meetings, held on 10 July 2008, on carbon dioxide transport, health and safety issues. The second web conference is scheduled to take place on 9 October 2008 on regulation for demonstration projects. IEA GHG will continue its close involvement with IEA in organising future activities of this Network.

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NEXT MEETINGS

Next meeting As agreed previously, the next (35th) meeting will be in Brisbane, Australia between the 21st and 24th April 2009. The following has been agreed for subsequent ExCo meetings: Meeting Date Location Host 36th 8th/9th October Zurich, Switzerland Switzerland/Alstom 37th Spring 2010 Spain CUIDEN 38th Sept. 2010 Amsterdam, Netherlands SenterNovem/UCE Norway has expressed interest in hosting a future ExCo meeting, possibly the 39th, in Bergen. Any members interested in hosting a future ExCo meeting should contact the General Manager.

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NOTES

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