Financing Advanced, Low-Emission Coal-Fired Power Generation
Technologies and Carbon Capture and Storage Projects
Annika SeilerNovember 18, 2013
Disclaimer
The views expressed in this presentation are the viewsof the ADB mission members and DO NOT necessarilyreflect the views or policies of the Asian DevelopmentBank, its Board of Director or the Governments theyrepresent.
Content
• Introduction to ADB• Rising Reliance on Coal for Power Generation in the
Asia Pacific Region• ADB’s Approach to Financing Coal Fired Power Plants• Examples of ADB’s Support to Low-Emission Coal
Technologies• ADB’s support to Carbon Capture and Storage
Demonstration in Asia
ADB’s Vision:Asia Pacific Region Free of Poverty
ADB’s Strategic Direction:
Asian Development Bank – An Introduction
• Founded in 1966 with Headquarters in Manila
• 67 Member countries with 26 country offices
• With a triple “A” credit rating, ADB is mobilizing low-cost funds for development
• In 2012, ADB assistance totaled $21.57 billion including $13.30 billion financed by ADB and $8.27 billion in co-financing
4
Status of Electricity Access in Developing countries of Asia and the Pacific Region, 2010
About 675 million people still suffer from a lack of access to electricity. An incremental generation capacity
of additional 125 GW is needed to achieve MDG
Coal Demand For Power Generation and CO2Emission for Developing Asia, 1990-2035
Electricity demand is projected to double between 2010 and 2035.
Investments in coal-fired power plants are a strategic choice for policy makers to strengthen energy security, also in traditionally non-coal-based economies.
Source: Asian Development Bank estimates, 2013.Expansion of coal-fired generation pose major concerns
for environmentally sustainable growth and climate change mitigation in ADB’s DMC.
ADB’s Energy Policy 2009
• Objective: Assist ADB Developing Member Countries in providing to their population reliable, adequate, and affordable energy for inclusivegrowth in a socially and environmentally sustainable manner.
• ADB’s Clean Energy Program target impact : First of all contribute to improved access to energy and energy security in DMCs and second decrease the rate of climate change.
• Tangible Outputs wrt cleaner coal & CCS technologies:– Investments in clean energy projects: $1 billion p.a. up to 2013 & $2
billion p.a. from 2013 onwards & leverage public & private sector CE investments
– Deployment of new technologies with strong demonstration effect – Approaches to promote clean energy / CCS introduced; – Barriers to clean energy/CCS technology investments lowered.
ADB’ s Approach to Financing Coal fired Power Plants (CFPP)
• ADB’s Energy Policy 2009 allows for financing of
– retrofitting of CFPP for improving efficiency, reliability, and operating life and to comply with current higher environmental standards;
– new plants under the condition• As a minimum super-critical, wherever feasible • Improvement of Energy Security • Ongoing policy-dialogue with relevant
government
Examples of CFPP Projects Co-Financed by ADB over the past 10 years
• Coal Mine Methane (CMM) Development, PRC, $187.4m, 2004– Demonstration of CMM for power generation (120 MW CMM power plant)
and urban residential gas supply• NTPC Capacity Expansion Facility, India, 2006
– Construction of India’s first super-critical power plant• Mong Duong 1 Thermal Power, Vie, $930.71m, 2007 and 2010
– Construction of low emission CFPP using CFB boiler technology• Tianjin IGCC Power Plant Project, PRC, $140m, 2010
– Construction of first IGCC in developing Asia
ADB supports first of its kind technologies in its membercountries to support development of advanced, lowemission technologies, instil sound environmentalmanagement and other safeguard practices
ADB’s Approach to foster low emissions coal fired power generation technologies
Capacity development
Policy dialogue &
consul-tation
Loan projects
ADB seeks to pave the way for low emission technologies andpromote environmentally sustainable investment decisions byfinancing demonstration projects, engaging in policy dialogueand strengthen capacity of relevant stakeholders
ADB CCS Fund
In June 2009, ADB established a CCS Fund with aninitial contribution of AUD 21.5 million from theGlobal CCS Institute, Australia. In 2012, Governmentof the United Kingdom also pledged £35 million in thefund.
Specific Eligibility Criteria Accelerate demonstration of CCS technologies
Identify, lower and / or eliminate general or country specific barriers for CCS demonstration
Identify, eliminate or mitigate risks in capture, transport and storage technology demonstration
Barriers to CCS in Developing Countries
Low Policy Priority for DMC governments Storage exploration is a long expensive
process; not much information is in public domain Existing institutional setup in developing countries do not match the
requirements of the whole CCS chain Unfair comparison with “without CCS” power plants; CCS is not
included in the developing countries’ low-carbon technology portfolio No economic drivers / Commercial gap due to
High LCOE Gaps in regulatory framework Lack of fiscal and financial support mechanisms Fuel subsidies & no carbon penalty
Insufficient commercial & public financing facilities Public Awareness
CCS in Developing Asia – ADB’s Approach and Activities
Par
tner
ship
s:
• ADB is a• stakeholder
in the CSLF • member of
the Global CCS Institute
Ass
essi
ng t
he P
oten
tial
for
CC
S
• Assessing potential and providing initial strategic assessment in
• PRC• South East
Asian Economies
Targ
et in
itia
l act
ivit
ies
in la
rge
coal
-bas
ed e
cono
mie
s:
• Capacity strengthening, technology roadmaps and policy advisory services for key policy makers and major energy groups in the PRC
Fina
ncin
g of
CC
US
pilo
t pl
ant:
• Supporting CCS pilot testing and demonstration in the PRC and Indonesia;
• Grant support to
Pre-combustion
CCS
Pre-combustion
CCS• Financial and technical assistance to China Huaneng Group to study the technology, build and operate an IGCC power plant with a CCUS
Post-combus-tion CCS
Post-combus-tion CCS
• Strengthen Capacity of Datang International to assess, pilot-test, and apply post-combustion method in gas-fired power plant and to establish CCS-ready criteria power plants
Oxyfuel-combustion
CCS
Oxyfuel-combustion
CCS
• Assess feasibility and establish technical standards for a 200MW demonstration coal-fired power plant
14
Upstream analysis and pilot testing of available technologies for energy companies and dissemination of lessons learnt:
ADB Approach to Support CCS Development in the PRC
Polic
y &
regu
lato
ry
fram
ewor
k:Po
licy
& re
gula
tory
fr
amew
ork: ADB is working
with the National Development and Reform Commission to formulate a comprehensive roadmap, policy, and regulations to enable CCS demonstration and deployment
ADB is working with the National Development and Reform Commission to formulate a comprehensive roadmap, policy, and regulations to enable CCS demonstration and deployment
Bus
ines
s M
odel
s:B
usin
ess
Mod
els: ADB in consultation with major oil, gas, coal mining, and power industries seeks to identify and facilitate joint ventures for early stage demonstration projects
ADB in consultation with major oil, gas, coal mining, and power industries seeks to identify and facilitate joint ventures for early stage demonstration projects
Kno
wle
dge
tran
sfer
:K
now
ledg
e tr
ansf
er: ADB organizes
international conferences or site visits for PRC stakeholders to facilitate knowledge sharing and exchange on good practices in CCS development
ADB organizes international conferences or site visits for PRC stakeholders to facilitate knowledge sharing and exchange on good practices in CCS development
15
ADB Approach to Support CCS Development in the PRC
Establishing an Enabling Environment for CCS Demonstration:
Conclusions
• Coal is and will be a key energy security solution tothe region but environmental foot print of coal usageespecially from power plants must be reduced
• Advanced, low-emission coal-fired generationtechnologies will have to be demonstrated anddeployed, and innovations in clean coal technologieshave to be advanced.
• Development banks can support change to business asusual (sub-critical) CFPP development by– financing highly efficient coal-based power plants– fostering CCS demonstration & deployment
For more information please contact:
Annika Seiler, Finance Specialist (Energy)Address: 6, ADB Avenue
Mandaluyong City1550 Metro Manila, Philippines
Email: [email protected]: +632.683.1512Web site: www.adb.org