2010 IEAGHG 2010 IEAGHG

Should CCS be Mandatory in the Should CCS be Mandatory in the Developed World and What are theDeveloped World and What are theDeveloped World and What are the Developed World and What are the

Pros and Cons?Pros and Cons?27 A t 201027 August 2010

Group 6Longyearbyen, Svalbard

NorwayHosted by Gas Technology Centre NTNU - SINTEF

This Question is Actually Composed of Three Smaller Questionsof Three Smaller Questions

• Why CCS?y• Why Mandatory?• Why Developed Countries?• Why Developed Countries?

-By CCS we mean storing carbon from point source emitters

B d t i t ti l t-By mandatory we mean an international agreement where noncompliance results in sanctions

B d l d t i th A A-By developed countries, we mean the Annex A countries

Why CCS?yPros:

Potential advancements in CO2

Cons:Supplanting other CO2 reducingPotential advancements in CO2

reducing technology and is readily deployable & cheaper than renewables

Supplanting other CO2 reducing technologies (storage, smart grid)?

S t f il f lHas to be done to achieve emissions reduction targets

Supports a fossil fuel energy even longer

Who is liable?Potential momentum in hydrocarbon (HC) sector and most of the western countries along with Chi d I di

Energy losses will be higher -other uses of fossil fuels may be lost in the future due toChina and India

CCS can capitalize the expertise and extensive knowledge of the

be lost in the future due to inefficiencies inherent in CCS

gHC industries

Can be used for EOR

19% CO2 reduction must be 2 achieved by CCS

Economic Comparison Between CCS and Alternativesand Alternatives

Solar PVSolar PV

Solar Termal

Wind

Advanced coal with

Natural gas CC withCCS

Advanced coal withCCS

Why Developed Countries?y pPros:

Developed countriesCons:

It can result inDeveloped countries are responsible for the historical CO2

It can result in developed countries exporting CO2historical CO2

emissionsThey are the largest

exporting CO2 emissions to the developing onesy g

producers [World Resources Institute]

Underdeveloped countries’ emissions

Developed countries can possibly afford the

t

may be ignored with this policyDi i i ticost Discriminating approach

Developed Countries Responsible for Historical Emissions

Are Developed Countries Really Responsible?

Others

CO2 emissions from fossil fuels by country (2007)CO2 emissions from fossil fuels by country (2007)

IEA: CO2 emissions from fuel combustion (2008)

Are Developed Countries Really Responsible?

World average

CO emissions from fossil fuels per capita (2007)CO2 emissions from fossil fuels per capita (2007)

IEA: CO2 emissions from fuel combustion (2008)

Why Mandatory?Pros:

Making CCS mandatory will

Cons:If implemented today some plants would be shut downsignificantly reduce CO2

emissions to reduce the environmental and economic

plants would be shut down prematurelyInternationally unenforceable

impacts of climate change

If it is not made mandatory will

unenforceable May be publicly unacceptable both nationally and locally

it even happen? Unintended consequences: mandatory policy may work in the opposite directionI th t i t ti lIn the past international agreements have struggledto meet the necessary challenge through g glegislation

International Agreements –UnenforceableUnenforceable

• Kyoto Protocol – The US president signed the t l b t t f l i i iprotocol but was not successful in acquiring

ratification from congress• EU Commission CCS Directive Article 33 – An• EU Commission CCS Directive Article 33 – An

example of mandatory policy that can be “watered down”–EU members agreed to have all new combustion plants

in excess of 300MW be capable of being retrofitted with capture technology by setting aside suitable space necessary for the equipments, if

• Storage site is available• Transport technically and economically feasiblep y y• Capture technology is technically and economically feasible

Local and National Public AcceptanceAcceptance• Norway – The first case a politician forced y p

to resign over an environmental Issue • Illinois FutureGen Project – loss ofIllinois FutureGen Project loss of

economic benefit is not accepted by the local communitylocal community- Economic issue is critical in making decision mandatorydecision mandatory

Inefficient and Old Power Plants Would Become Obsolete

180 %

165 %

170 %

175 %

180 %

CO2 capture, high penalty

CO2 capture, low penalty

145 %

150 %

155 %

160 %Without CO2 capture

power plant LHV, CO2 capture MJη ⎡ ⎤⎢ ⎥

130 %

135 %

140 %

145 %

2power plant, CO capture LHV, no CO2 captureMJη ⎢ ⎥⎢ ⎥⎣ ⎦

110 %

115 %

120 %

125 %

95 %

100 %

105 %

110 %

High efficiency coalfired power plant

Low efficiency coalfired power plant

High efficiency gasfired power plant

Low efficiency gasfired power plant

From, Olav Bolland’s powerpoint slides

Unintended Consequencesq

• Implementing a mandatory policy on p g y p ydeveloped nations may have negative consequencesq

• Implementing a mandatory policy that increases costs may result in reboundincreases costs may result in rebound effect

• Prohibition USA: An example where the• Prohibition USA: An example where the 18th Amendment resulted in high crime rates and eventually had to be rescindedrates and eventually had to be rescinded 21st Amendment

The Bottom Line

CCS is crucial in combating global climate changesclimate changesDeveloped countries may lead the technological innovation to generate electrical energy more equitablyelectrical energy more equitablyHowever,…making CCS mandatory i ll b t i ibl t hi dis all but impossible to achieve and enforce

Should CCS be Mandatory in the Developed Should CCS be Mandatory in the Developed World?World?

NONOTherefore, each CO2 emitter should utilize this technology inthe most effective way possible but this should bethe most effective way possible, but this should beimplemented on the basis of:

- country by countryj b j- project by project

Q ti ?Questions?

Supporters and Sponsors

Stabilization Wedgesg

Socolow and Pacala updated Science 2004

Stabilization Wedges = 25Gt CO225Gt CO2

1 Double fuel efficiency of 2 billion cars1. Double fuel efficiency of 2 billion cars2. Replace 1400 Coal power plants with

natural gasnatural gas3. Double the number of nuclear power plants4 O tfit 800 l l t ith CCS4. Outfit 800 coal power plants with CCS5. 2 billion cars using ethanol6. Increase solar power by 700x7. Increase wind power by 25X

CCS EconomicsPower Generation Industrial Applications

PC (SC & USC1)

Oxy-comb (Std & ITM1)

IGCC NGCC Blast furnace steel prod

Cement prod.

Natural gas processing

Fertilizer prod.

prod. g

US$/MWh US$/MWh US$/MWh US$/MWh US$/tonne steel

US$/tonne cement

US$/GJ natural gas

US$/tonne steel

Without CCS2 76-79 76-793 96 78 350-500 66-88 4-9 270-300

Levelised Cost of

Production

With CCS (FOAK) 3

136-138 120-127 134 112 80 32 0.053 10

With CCS (NOAK) 4

134-136 118-125 132 111 72 30 0.053 10

% increase over w/o CCS5

75-78% 55-64% 39% 43% 15-22% 36-48% 1% 3-4%

Cost of CO2Avoided6

FOAK 87-91 62-70 81 112 52 50 18 18

Avoided6

($/tonne CO2)NOAK 84-88 60-68 78 109 47 47 18 18

Cost of CO2Captured

FOAK 56-57 44-51 44 90 52 50 18 18

Captured($/tonne CO2)

NOAK 54-55 42-49 42 87 47 47 18 18

CCS Economics Projections

Philip Sharman says “the cost reduction shown here is very optimistic for first generation and the carbon price for costoptimistic for first generation and the carbon price for cost

is also optimistic – this makes the gap an even bigger challenge.”

Heterogeneous sub-surfacegRegional studies have shown that there is an estimated storage capacity capable of storing enough CO for (x years)capacity capable of storing enough CO2 for (x years)

These studies have not proven that there are enough injection ready sites that have: a cap, permeability, porosity.

Therefore, how can we legislate a mandatory injection of (x tons) of CO2 without knowing that even most emitters could comply

UK J C d USA J 100 th l ti d itUK, Japan vs Canada, USA: Japan over 100x the population density of Canada and 10x USA

The Cost of no CCS Would be Higher?Higher?

• Unabated climate change could cost the world at least 5% of GDP and if more dramatic predictions come to pass, the p p ,cost could be even more (20%)

• It states, "our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale y, y ,similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse theseAnd it will be difficult or impossible to reverse these changes.”

Source: Stern report, 2006