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Gwen Andrews

Vice President, Power & Environmental Policies,

Asia & Oceania

Making CCS Projects Happen

ADB Clean Energy Forum

June 2012

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Three main activities in four Sectors

Equipment &

services for power

generation

ALSTOM THERMAL POWER

Equipment & services for

rail transport

Equipment & services for

power transmission

ALSTOM TRANSPORT

ALSTOM GRIDALSTOM RENEWABLE POWER

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Global power market forecast

New Power Plant Orders in GW p.a, medium term

Highest demand in emerging countries

Growing share of CO2-free across the globe.

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CO2Capture Solutions within Alstom

Source: Vattenfall

Pre-combustion

(New only)

Power Plant with CO2 capture

Solutions developed by Alstom

Post-combustion Oxy-combustion

(New + retrofit) (New + retrofit)

Chilled Ammonia

Advanced Amines

Oxy combustion with Air Separation Unit

Chemical Looping Combustion

CCS must be applied to the installed base as well as to new plants

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Alstom activity on demonstrations

1st and 2nd Generation CCS

Germany-30 MWth Oxy - Lignite

US -2 MWth

Adv. Amines - coal

Oxy 350 MWe lignite,

Post 350 MWe eq. coal

US - 15 MWth

Oxy - coals

Roumania >250MWe Chilled

ammonia - Lignite

Poland 260 MWeAdv. Amines - Lignite

US 3 MWth

Chemical looping - coal

:

Sweden - 5 MWth

Chilled AmmoniaFuel oil

US - 5 MWth

Chilled Ammonia, Coal

France - 30 MWth

Oxy - Gas

Sweden 0.25 MWth

Post C. multi purpose

Norway - 40 MWth

Chilled Ammonia - Gas

France 5 MWth

Adv. Amines - Coal

Germany1

MWth

Chemical looping - coal

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What we have achieved

USA - Coal - Chilled

Ammonia

Vattenfall SchwarzePumpeGermany - Lignite &Bit. Coal - Oxy

USA - Coal -

Advanced Amines

CO2capture rate

CO2 purity

Reached

>99.7%

>99.9%

>99.5%90%

90%

90%

Load [%] on net efficiency

Realistic limit

USA - Coal - Chilled

Ammonia

>99%90%

15

20

25

10**

Pilot operation confirm CO2capture works and performances are improving

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Costs of decarbonised power compared

8465

0

100

200

300

400

Nucle

ar

Hydr

o

Geoth

ermal

CCGT

CCS

2015

O

nsho

reW

ind

PCHardc

oalC

CS20

15

O

ffsho

reW

ind

Solar

PV

Solar

Therm

al

/ MWh CoE - Low Carbon technologies Europe in 2011-2016 period

Reference case

CCS on Coal and Gas is competitive

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Barriers and Challenges

Technical

- technical performance has been proven

- costs of energy penalty an issue

Storage

- mapping and proving appropriate storage takes time

- locations near large sources are most economic

Regulatory

- Regulation of ownership, operation and monitoring of storage

- Policy regulation to encourage CCS (eg, emissions performance standards)

- Regulation to avoid stranded assets (eg, CCS ready standards)

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Barriers and Challenges - Financing

The biggest challenge is to find a means of financing the large scale

demonstrations that will allow the technology to become commercialised

Capital costs will need to be shared by governments, as the investment required

for capture, transport and storage is too large to be borne by utilities during the

demonstration phase

A method must be found to cover the operating costs of CCS demonstration

plants as well

- carbon pricing may cover some of the shortfall where it exists

- preferential tariffs can ensure that extra costs are covered

- there is precedent for preferential tariffs in terms of renewable energy

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Datang CCS DEMO Projects

Full size Oxy-fuel combustion CO2 capture

Cogeneration of Heat and Power based on Super

Critical boiler using lignite

Location: Daqing, Heilongjiang province

EOR and CO2 storage: adjacent to PetroChinas

Daqing oil field for EOR, near Songliao basin for

geological sequestration

Partial flue gas stream slip to Post-combustion CO2 capture

Ultra Super Critical boiler using bituminous or subbituminous coal

Location: Dongying, Shangdong province

EOR: very close to Sinopecs Shengli oil field for EOR

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Key Success Factors for CCUS in China

Cost effective CO2 capture technology

Reliable and cost effective CO2 Storage

Outside funding for project execution

Special power tariff/ EOR or other utilisation schemes

MOST endorsement of CCS capture technology and storage technology

NDRC approval of project execution

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How does CCS get financed?

Europe: NER 300 funding

- value of 300 million permits from the New Entrant Reserve in the EU ETS

- money identified upfront, time given for consortia to bid, competitive biddingpossible

US: project proposals assessed by DOE:

- AEP Mountaineer had received $330 million

- but could not get rate relief from the West Virginia state regulator

China: early days and the process is ad hoc

- international funding is necessary

- special tariff is necessary

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Issues for ADB

CCS is a developing technology of particular importance to Asia

It requires co-operation by a number of partners, public and private, in the

chain of capture, transport and storage

These are inherently complex projects

In emerging economies, CCS requires transfer of technology and skills

Which can realistically only come from Western companies at this point

Equally, it requires complex and co-ordinated support from government and

financial partners

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Two obvious impediments from ADB procurement policies

The prohibition against consultants being further involved in project delivery

Projects in countries like China can only be realised by technology suppliers

and utilities working together

Partners must commit early and co-operate through the entire chain of study,

design, financing, construction and operation of the project

The requirement for International Competitive Bidding

The co-operative model is ill suited to ICB

No international technology supplier will undertake the early planning work at

the risk of losing the project to a competitor

CCS is not a commercial technology that many vendors can provide

A different approach is required to realise innovative projects

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Conclusion: What makes CCS projects different?

Technology not yet proven at commercial scale, and continuous R&D required with projects

Large scale demonstrations required for learning and cost reduction

Demonstration projects in China can help to bring costs down to address Asian

expectations

There must be co-operation between utility clients and suppliers with experience in

integrating CCS equipment into power plants for this to succeed

There is as yet no real competitive landscape for CCS. A way must be found to fund

commercial scale demonstrations on a flexible basis without commercialisation, there is no

competition

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