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Carbon Capture and Storage Advancement Is Urgent: An Exclusive Interview with Brad Page, Head of the GCCSI

WINTER 2013

VOLUME 1 ISSUE 4 THE OFFICIAL JOURNAL OF THE WORLD COAL INDUSTRY

COP19: The Cobblestone Road to Paris

Review of the International Coal & Climate Summit

Keeping Coal Alive on the Canadian Prairies: Carbon Capture and Storage at Work in Saskatchewan

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Our mission is to defend and grow marketsfor coal based on its contribution to a higherquality of life globally, and to demonstrate andgain acceptance that coal plays a fundamental role in achieving the least cost path to a sustainable low carbon and secure energy future

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It cannot and should not be ignored that the growth in fossil fuel usage has shown no signs of slowing. In several respects, coal is leading this charge. Most of this growth has come, and will continue to come, from developing countries. In

most developing countries many power plants have been operating for less than a decade and are expected to continue to operate long into the future. In addition, it is a tall order to ask many countries (developing or not) to abandon a domestically available, secure source of fuel. Still, the tension between meeting growth goals/supplying energy and addressing major environmental and health issues is being felt globally.

The prevailing example of such tension is undoubtedly related to climate change and greenhouse gas emissions generated through fossil fuel conversion. Based on the risks associated with unchecked climate change, the World Bank has announced that it will fund coal-fired power plants only in rare cases; the U.S. government has followed with their own, more nuanced, reduction in such funding. Can there be a balance between providing the energy needed for growth and ensuring a healthy environment for future generations?

While modern coal mining practices and low-emission coal conversion have dem-onstrated that it is possible to dramatically reduce the environmental impacts associated with coal use, limiting global carbon emissions will require a new control paradigm. Clearly, efficiency improvements are a low-hanging fruit that could be seized. State-of-the-art power plants can offer efficiencies of 45%, but today the average global efficiency is only 33%. Leaders should insist that all new coal-fired power plants are built using the highest efficiency and best environmental tech-nologies possible. Improving efficiency alone, however, will not make it possible to meet the emissions reduction goal of the 2DS scenario posed by the IEA, a goal agreed upon by world leaders in the Copenhagen Accord. To meet this goal, carbon capture, utilization, and storage (CCUS and eventually just CCS) are necessary. The Global Carbon Capture and Storage Institute has shown that attempting to meet the 2DS emissions reduction goal without coal and CCS/CCUS would entail a high cost. Finally, it should be realized that these newer, more efficient plants will better lend themselves to being retrofit with CCS/CCUS, so the objectives of new, high-efficiency plants and CCS/CCUS are not necessarily in conflict, but rather can be complementary.

Many challenges remain before CCS/CCUS can be considered fully commercial and widely deployed. The world’s first large international emissions trading scheme led by the EU has seen CO2 prices collapse. Amid troubled financial times and austerity measures, financial resources are not sufficient to support the 100+ CCS/CCUS dem-onstrations needed by 2020. Fortunately, CO2 enhanced oil recovery can provide much needed revenue in some places, but is not an option everywhere. Community opposition to CCS/CCUS projects and a general lack of technology understanding could derail progress. Perhaps most importantly, but most difficult to answer, who will take responsibility for the CO2 once it is stored? Although the hurdles are high, the critical nature of the end goal cannot be denied: a low-carbon, low-emission coal-conversion energy system.

This issue of Cornerstone is focused on the challenges, benefits, and the urgency of deployment of CCS/CCUS. On behalf of the editorial team, I hope you enjoy it.

The Urgency of CCS

FROM THE EDITOR

Holly Krutka Executive Editor, Cornerstone

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cOnTEnTs

from the editorThe Urgency of CCSHolly Krutka

SPeCiAL CoVerAGeCOP19: The Cobblestone Road to ParisWojciech Kość

Review of the International Coal & Climate SummitMilton Catelin

VoiCeSKeeping Coal Alive on the Canadian Prairies: Carbon Capture and Storage at Work in SaskatchewanBrad Wall

Beyond Roadmaps to Deployment: Ensuring CCS Is a Component of Mid-century CO2 Emissions ControlKurt Walzer, Pam Hardwicke, John Thompson

eNerGY PoLiCYImplications of EU ETS Reform ProposalsNicholas Newman

A Roadmap for the Advancement of Low-Emissions Coal TechnologiesBen Yamagata

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4 Cover Story

Carbon Capture and Storage Advancement Is Urgent: An Exclusive Interview with Brad Page, Head of the GCCSI Geoff Giordano

The Global Carbon Capture and Storage Institute sees progress in CCS projects but says more work needs to be done.


StrAteGiC ANALYSiSCO2 Enhanced Oil Recovery: The Enabling Technology for CO2 Capture and StorageVello Kuuskraa, Phil DiPietro

China’s Policies for Addressing Climate Change and Efforts to Develop CCUS TechnologyRen Xiangkun, Zhang Dongjie, Zhang Jun

teChNoLoGY froNtierSOverview of Oxy-fuel Combustion Technology for CO2 CaptureLigang Zheng, Yewen Tan

Alstom’s CCS TechnologiesMagnus Mörtberg

Shenhua Group’s Carbon Capture and Storage DemonstrationWu Xiuzhang

SoCietY & CULtUreOvercoming Opposition to CCS through Developer–Community CollaborationPeta Ashworth

GLoBAL NeWSCovering global business changes, publications, meetings, and highlighting the winners of the inaugural WCA Leadership & Excellence Awards 2013

VoLUme 1 AUthor iNdex

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Chief EditorGu Dazhao, Katie Warrick

Executive EditorHolly Krutka, Liu Baowen

Responsible EditorChi Dongxun, Li Jingfeng

Copy EditorLi Xing, Chen Junqi, Zhang Fan

Production and LayoutJohn Wiley & Sons, Inc.

CORNERSTONE (print ISSN 2327-1043,online ISSN 2327-1051) is published four times ayear on behalf of the World Coal Association byWiley Periodicals Inc., a Wiley Company111 River Street, Hoboken, NJ 07030-5774.

Copyright © 2013 World Coal Association

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The content in Cornerstone does not necessarilyreflect the views of the World Coal Association orits members.

Official Publication of World Coal Industry

Published by John Wiley & Sons, Inc.

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With the release of its latest global status report1 in October, the Global Carbon Capture and Storage Institute (GCCSI) sees progress in CCS projects but

says more work needs to be done to overcome policy barriers as well as demonstrate operational feasibility and present business cases for expanding the use of CCS.

In an exclusive interview for Cornerstone, GCCSI chief Brad Page echoed key aspects of the report, “The Global Status of CCS: 2013,” and detailed how his organization balances the reality of coal’s primacy as a fuel with the desire to cur-tail greenhouse gas emissions enough to hold the increase in global temperature to below 2°C in the coming decades.

Two coal-fired plants expected to come online in the U.S. and Canada in 2014 could be beacons for the capture and sale of CO2 for enhanced oil and gas recovery—providing vital exam-ples of how coal with CCS can deliver low-carbon electricity

and increase domestic oil production.

“We know that fossil fuels will continue to be the world’s primary source of energy,” Page noted. “Therefore, more projects are needed, especially in the power sector and in energy-intensive industries, where none currently exist.”

Despite the hurdles to overcome, Page remains confident in GCCSI’s mission.

“I consider the damaging effects of climate change to be one of the greatest challenges the world faces today,” said Page, who joined GCCSI in August 2011 after a seven-year stint heading the Energy Supply Association of Australia.2 “CCS has a very real role to play as one of a group of key technologies needed to tackle this challenge. And the Institute offers the opportunity for me to play a part in helping CCS to deliver on the potential that it promises.”

carbon capture and storage Advancement Is Urgent:By Geoff GiordanoContributing Author, Cornerstone

“IEA notes that the urgency

of CCS deployment is only

increasing; that this decade

is critical for moving

deployment of CCS beyond

the demonstration phase…”

cOvER sTORy

4


MEAsURIng PROgREss

GCCSI’s status report sounds some positive notes:

• A dozen large-scale CCS and carbon capture utilization and storage (CCUS) projects in operation around the world are keeping 25 million tonnes per year (Mtpa) of green-house gases (GHGs) from entering the atmosphere. That total is predicted to increase to 38 Mtpa by 2016 with the construction of eight CCS projects.

• Four new CCS/CCUS projects have become operational since 2012. Seven large-scale projects are operational in the U.S., two in Europe, and one each in Canada, South America, and Africa.

• The U.S. leads the world with 20 CCS projects in five categories of planning or operation, followed by Europe with 15, China with 12, and Canada with seven.

• Two coal-fired plants—Southern Company’s Kemper County Integrated Gasification Combined Cycle Project in Mississippi and SaskPower’s Boundary Dam in Saskatch-ewan, Canada—are expected to become operational in 2014 as the world’s first such facilities incorporating CCS. The plants are to provide carbon dioxide for enhanced oil recovery (EOR)—an established practice in the oil and gas industries.

“The more favorable economics associated with the revenue stream generated from the sale of CO2, coupled with sub-stantial financial support from government, have enabled the development of these two projects [Kemper and Boundary Dam] and will provide a basis to develop best practices, reduce cost, and identify—and avoid—potential problems so future plants can be built better, faster, and at less cost,” Page noted on 10 October, the day the GCCSI’s 2013 status report was released at the organization’s annual international mem-bers meeting in Seoul, South Korea.3

“Several other coal-based power CCS projects in the U.S. and Europe are moving toward a final investment decision in the remainder of 2013 or early 2014, and a large number of others are moving through the planning stages, in those regions and elsewhere,” Page told Cornerstone.

However, the report also cautions that:

• What GCCSI calls large-scale integrated projects (LSIPs) have been reduced globally from 75 to 65 since the 2012

An Exclusive Interview with Brad Page, Head of the GCCSI

report, with five canceled, one downsized, and seven put on hiatus.

• Despite the aforementioned progress with CCS projects, “momentum is too slow to support the widespread com-mercial deployment needed to underpin climate change risk mitigation scenarios. A very substantial increase in new projects entering construction is required.”

• Although a robust international dialogue continues to advocate for CCS, such discussions “have not been trans-lated into policy settings that have delivered a sustainable pipeline of CCS projects in individual countries.”

“Technology-neutral policies, government funding, incentives, and continued robust research to reduce costs are needed

Brad Page, CEO of the Global Carbon Capture and Storage Institute, was previously the CEO of the Energy Supply Association of Australia.

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to attract investment for additional large-scale CCS projects and enable sustainable deployment of the technology,” Page urged. “In North America, EOR is a key enabler for CCS as it enables demonstration of the technology and builds public and marketplace confidence in its viability and safety. CCUS is also a driver for continued R&D in capture, where costs remain high, but progress is being made with promising new lower-cost technologies.”

ccs In AcTIOn

While some projects have stalled or been canceled, several are offering insights into the potential of CCS.

“Pilot test facilities are running at the U.S. Department of Energy and Southern Company’s National Carbon Capture Center and the Plant Barry test facility in the U.S.,” Page said.

The Plant Barry project, in Mobile, Alabama, “diverts a flue-gas

stream, equivalent to about 25 MW, from the power station and removes the CO2 using post-combustion solvent tech-nology,” he explained. “The demonstration project aims to capture 150,000–200,000 tonnes of CO2

a year and geologi-cally store it in a nearby reservoir.”

The capture plant has been operational since June 2011, becoming an integrated CCS project in August 2012, he noted.

Meanwhile, in the Netherlands, “pre-combustion from coal-fired power generation is being demonstrated at the Willem Alexander Integrated Gasification Combined Cycle (IGCC) plant. This is based on a 20-MW slipstream from the IGCC plant, which captures about 90% of the CO2 in that slipstream.”

In Australia, “the Callide Oxyfuel project is demonstrating oxy-fuel combustion technology from a coal-fired power plant. Operating since mid-2012, this project involved retrofitting a 30-MW decommissioned power plant, and the results to date show it is working well. The initial stage of the project is capturing 15,000–20,000 tonnes of CO2 a year, which is only a small per-centage of the CO2 produced. Subsequent stages may result in an integrated project, whereby this CO2 will be geologically stored.”

Now, the challenge “is to scale up from capture demonstration projects that represent 20 to 30 MW to commercial-scale power stations of around 500 MW. Typically, industry will do this via a system of larger and larger projects that take into consideration the lessons learned from each demonstration project.”

ccs, cOAl, AnD OTHER FOssIl FUEls

While conceding putting CCS into practice presents substantial obstacles for industry, Page also emphasized the necessity of making progress.

“Currently, CCS technology to mitigate emissions is expensive and energy intensive, especially for power plants, whether coal- or natural gas-based,” he said. “The Institute’s broad membership includes representatives from the coal industry, whom we consult to set priorities, gain insight into challenges and issues, and inform our strategy to move CCS forward.”

A pragmatic vision of global energy needs fuels the efforts of Page and GCCSI.

“Due to its geographic diversity, abundance, and relatively low cost, coal provides energy access and security for many coun-tries. The world will continue to rely on coal and other fossil fuels for some time, and that reliance will grow, especially in developing economies. The challenge has been to find cost-effective environmentally sustainable solutions, especially from a climate perspective, to its use.”

cOvER sTORy

The recently released 5th edition of the GCCSI’s key publication provides an overview of the current state of development of CCS.1


CCS “offers the opportunity to address the carbon emissions from coal, and other fossil fuel use, in industrial applications. CCS is currently the only way to burn fossil fuels without adding significantly more CO2 to the atmosphere. Its purpose, therefore, is to reduce the carbon emissions footprint of all fossil fuel-based power facilities, not just coal, as well as other industrial manufacturing sectors that are energy intensive or generate CO2 emissions as part of the production process.”

But CCS isn’t the only solution.

“Mitigating the increasing global levels of greenhouse gases released into the atmosphere requires a range of clean-energy solutions,” Page stressed. “These include energy-efficiency and demand-management measures, renewables, and a suite of other low-carbon technologies, of which CCS is a vital com-ponent. More than a billion people around the world do not currently have access to basic electricity. To address this need, coal will continue to be used as a primary source of energy, so it is very important that CCS technology is applied to coal-fired plants as well as gas and other industrial facilities.”

MAkIng THE cAsE FOR ccs

GCCSI “advocates for CCS as a vital part of a portfolio of low- or zero-carbon technologies required to mitigate climate change and provide energy security,” Page said. “This is because using CCS is currently the only way that fossil fuels can be burned without adding significantly more CO2 to the atmosphere.

“Our approach involves providing strong, independent, and influential representation for our membership, for example in international forums, [and] using our unique convening power to bring together governments, companies, and deci-sion makers.”

GCCSI has focused on becoming “the ‘go-to’ organization for the most comprehensive and authoritative global knowledge, data, and in-depth analysis of information about CCS,” Page emphasized. “We also have a broad-based and interconnected network of world-class experts in all aspects of the technology. Regionally and globally, we focus on keeping CCS at the forefront of the climate-solutions path, strongly advocat-ing for its inclusion in the portfolio of clean, low-carbon energy technologies. Further, we have established an effective CCS capacity-development program that is being implemented in several developing countries. This is important because pro-jections show that, as they grow, developing economies will become a new source of increased carbon emissions.”

On the subject of methane emissions, Page is succinct: “CCS will be needed irrespective of other greenhouse gas emissions, including methane. The issue of added methane emissions

needs to be addressed in addition to, not in place of, CCS.”

Understanding the CCS landscape in different countries and regions is vital, he said. To that end, GCCSI “recently reorga-nized to focus better on three primary regions: the Americas; Europe, Middle East, and Africa; and Asia-Pacific. In each region, we need to work within different policy and regula-tory frameworks, at different stages of development, energy resources availability, and degrees of CCS readiness. This is also true within sub-regions, as each of the three regions encompasses both developed and emerging economies.”

In its annual reports, GCCSI points up areas needing attention

“Coal will continue to be used as

primary source of energy, so it is very

important that CCS technology is

applied to coal-fired plants as well as

gas and other industrial facilities…“

Although progress is being made, the current rate of CCS development and demonstration is insufficient to meet the IEA’s goals.

8

in furthering CCS, particularly in making arguments that CCS is good business.

The current report “devotes a chapter to the critical issue of the business case for CCS projects and points to some lessons learned from large-scale projects so far,” Page explained. “Business cases for CCS projects may pursue different objec-tives, from technology demonstration to commercialization opportunities, and protecting portfolio value. However, all share similar challenges regarding the management of addi-tional costs, increased financial risks, and complex financing plans.”

In its role as an advocate for the technology, GCCSI aims to provide a roadmap for success, Page said.

“Major factors contributing to a project’s financial and com-mercial deliverability include the diversification of products

and revenues through an innovative approach to technol-ogy integration; strategic alliances and contracting decisions that widen financing prospects, notably by granting access to export credit agency funding; and access to targeted support provided as part of a consistent, results-oriented government strategy.

“We point to Summit Power’s Texas Clean Energy Project as an example. [It] combines industrial processes to diversify the project’s revenue sources while maximizing value generation. The polygeneration aspect of TCEP results in the expected ability of the project to cover all its costs, including debt service, while achieving potential net rates of return high enough to attract equity investors.”

Also providing a roadmap for expanding the use of CCS is the International Energy Agency (IEA), which released its own report this year on the extent of the technology’s reach.

“The IEA notes that the urgency of CCS deployment is only increasing; that this decade is critical for moving deployment of CCS beyond the demonstration phase; and that urgent action is required from industry and governments,” Page said. “We agree with all these points. The acceleration of CCS will require a renewed commitment from governments, including funding and incentives for new projects, sustainable policies for investment certainty, and robust R&D to allow next-genera-tion technologies to be deployed commercially post-2020.”

REFEREncEs

1. The Global Status of CCS: 2013. Available at www.globalccsin-stitute.com/publications/global-status-ccs-2013, (accessed 16 October 2013).

2. Brad Page Chief Executive Officer. Available at www.globalcc-sinstitute.com/publications/global-ccs-institute-annual-re-view-2012/online/48791, (accessed 20 October 2013).

3. Global Carbon Capture and Storage Institute, Proven Climate Change Mitigation Technology Needs Global Support, 10 Oc-tober 2013, Available at www.globalccsinstitute.com/institute/media-centre/media-releases/proven-climate-change-mitiga-tion-technology-needs-global

The author can be reached at [email protected]

cOvER sTORy

The next decade is critical for moving CCS beyond the demonstration scale.


By Wojciech KośćContributing Author, Cornerstone

The 19th session of the Conference of Parties (COP19) of the United Nations Framework Convention on Climate Change (UNFCCC) was held in Warsaw from 11–22

November. The President of the COP19 was Marcin Korolec, Poland’s Minister of Environment. Such COP meetings provide the opportunity for the Parties to collaboratively address climate change at the international level. Although the COP delegates arrive with a common set of objectives, competing national interests, differing energy resource endowment, political sys-tems, socioeconomic conditions, and levels of development often cause the negotiating process to be difficult—and the COP19 was no different in this respect. Still, however bumpy the negotiations, the groundwork was laid at the COP19 to finalize a deal at COP21 in Paris in 2015. COP21 is slated to see the global climate change accord inked so that it can enter into force as of 2020. This timeline was agreed upon during the 2011 summit in Durban, South Africa, and progress at the COP19 was considered paramount to meeting this timeline.

DOWn TO THE WIRE

As with previous COP meetings, negotiations lingered into the final hours. In the late afternoon of 22 November, the

COP19 was already going into overtime, and some frustra-tion was apparent. Leaving a COP19 meeting room, the EU Commissioner for Climate Action, Connie Hedegaard, was besieged by reporters. Commenting on the progress of the apparently deadlocked negotiations, Ms. Hedegaard pointed at some Parties as attempting to stall the progress: “There is still a group of like-minded [countries] who thinks differently, who tries to reinstall the firewall.” She was referring to the so-called Like-Minded Developing Countries, a block of 12 states broadly aligned based on their current state of devel-opment, being oil producers and/or heavily reliant on fossil fuels for continued growth. These countries have generally proposed that emissions-cutting targets should be limited to rich nations, a suggestion unacceptable to the EU and many developed countries.

Ms. Hedegaard’s remark provoked a strong reaction from Claudia Salerno, Venezuela’s Vice Minister of Environment, who described the EU official’s remarks as “totally unaccept-able” and argued that Ms. Hedegaard was attempting to negotiate through the media.1

At that moment, it appeared as if the COP19 would fail, thus jeopardizing the chances of an agreement in Paris. However, those familiar with the COP may well have suspected that last-minute agreements were on the horizon, even when negotiations appeared to be the most desperate. In fact, in an interview on the final day of the COP19, the Executive Secretary of the UNFCCC, Christina Figueres, said that Parties were “not surprisingly” working through political issues, then went so far as to say that is “where we should be on the last day”.2

MAIn IssUEs

The COP19 convened in Poland’s capital to move the climate negotiations forward on three principal issues.

COP19: The Cobblestone Road to Paris

“However bumpy the negotiations,

the groundwork was laid at the

COP19 to finalize a deal at COP21 in

Paris in 2015.”

sPEcIAl cOvERAgE

EU Commissioner for Climate Action Connie Hedegaard speaking to journalists outside the plenary after an agreement is reached on the loss and damage mechanism at the UN Climate Change Conference in Warsaw.

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The first key issue was to agree upon a so-called roadmap to Paris. Reducing greenhouse gas emissions (i.e., mitigation) is critically important to the mission of the UNFCCC, so Parties must agree to when and how they will report their respective greenhouse gas mitigation measures, including whether these pledges would be legally binding. These mitigation efforts were intended to be the foundation of the global deal to be signed in 2015 and put into action as of 2020.

Separately, Parties were also asked to advance discussions on the so-called pre-2020 ambition gap, meaning that agree-ments must be made to take mitigation steps before the Paris agreement comes into effect in 2020. Based on this reason-ing, the Parties also hoped to form an agreement about what action will be taken between now and 2020.

The second issue of focus during the COP19 was to agree on the subject of long-term climate finance. In other words, what financial resources will be made available for climate change mitigation and adaptation, including the issue of finding the initial capital for the Green Climate Fund, a new financial vehicle to support tackling the effects of climate change in the developing world.

The third issue, referred to as “loss and damage”, concerned creating a mechanism to provide better protection against the negative consequences of climate change in developing coun-tries. Negotiations in this area were focused on establishing a mechanism to assist vulnerable countries as they experience damage caused by extreme weather events, rising sea levels, and other climate-related impacts where adaptation is diffi-cult or impossible. Generally, the UNFCCC structure includes two basic pillars—one related to greenhouse gas mitigation and the other related to adaptation. Discussion related to loss and damage focused on whether (and if) it would fit under these two pillars. At COP18 in Doha, Qatar, there was agree-ment to establish a loss and damage mechanism during the COP19, making this a much-watched issue heading into the COP19. In addition, this issue assumed greater prominence as the COP19 opened against the dramatic backdrop of Typhoon

Haiyan, which made landfall in the Philippines just days prior to the meeting. During the opening plenary, Philippine nego-tiator Yeb Sano made an emotional call to the Conference to resolve the issue of loss and damage.

There were several other items on the agenda as well, including discussions on the final technical details of the UN program to reduce deforestation and forest degradation in developing countries (i.e., REDD+). A revival of the UN Adaptation Fund, an on-the-ground initiative to fund projects in developing countries that are parties to the Kyoto Protocol to adapt to climate change effects, was also an item to be decid-ed. In addition, establishment of a new market mechanism to complement the currently functioning Joint Implementation and Clean Development Mechanism was debated.

THE OUTcOMEs

The EU-Venezuela spat was but one of many that took place during the high-stakes COP19. Still, about 30 hours later, the Warsaw conference concluded with some applause as attendees did eventually manage to push the climate negotiations along the road to a global deal.

The deadlock was broken in a series of “huddles”, direct dis-cussions between interested Parties, which proved to be more effective than official statements from the floor of the plenary.

Although the COP19 may not have been universally consid-ered a success, the UNFCCC and several governments seemed pleased to report the progress made.3 While much remains to be done, the claims of success have merit from the per-spective that hopes are still very much intact that a finalized agreement can be signed in 2015.

The Roadmap to Paris

A principal focus during the COP19 was the development of the roadmap to COP21 in Paris. This was a separate strand of the talks carried out by the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP), created during the 2011 summit in South Africa.

The ADP’s mandate is to “develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties, which is to be completed no later than 2015 in order for it to be adopted at the 21st session of the Conference of the Parties (COP) and for it to come into effect and be implemented from 2020.”4 In other words, the ADP must forge the global climate change treaty. A critical aspect of the ADP negotiations at the COP19 was to encourage Parties to prepare their national commitments

sPEcIAl cOvERAgE

“While much remains to be done,

the claims of success have merit from

the perspective that hopes are still

very much intact that a finalized

agreement can be signed in 2015.”


before Paris, so as not to lose time and to be able to finalize the shape of the global deal as scheduled.

The final roadmap adopted at the COP19 was one of compro-mise and will certainly be subject to potential modifications before COP20 in December 2014 in Lima, Peru. Until the last day of the Warsaw meeting, the draft text wording was relatively strong, and referred to Parties initiating or inten-sifying “domestic preparations for their intended nationally determined commitments”—meaning that each Party must share how and how much it plans to reduce its emissions. These national commitments were to be communicated “well in advance of the twenty-first session of the Conference of the Parties [by the first quarter of 2015 by those Parties in a position to do so] in a manner that facilitates the clarity, trans-parency and understanding of the intended commitments”. The strong reference to “commitments” suggested that there would be pressure on the Parties to communicate concrete plans to reduce emissions in just over a year from now.5

However, the wording was eventually softened, the compromise reflecting reservations from some delegations. The final roadmap suggests that Parties “who are ready” can “initiate or intensify domestic preparations for their intended nationally determined contributions, without prejudice to the legal nature of the contri-butions”.6 By the end of the talks, the word “commitment” had fallen off the roadmap.

Although this may seem a subtle change, it remains to be seen whether the agreement in Paris will be legally binding. It is possible that this modification has opened the door a little wider for countries to submit anything from nationally binding emissions reduction plans to non-binding related actions. In this sense, while countries still have a clear deadline to come up with their contributions by the end of the first quarter in 2015, the strength of the plans will certainly differ to a great extent unless there is progress in the intermediate UNFCCC discussions.

climate Finance

Prior to the COP19, both the expectations and the challenges related to the topic of climate finance were high. In 2009 under the Copenhagen Accord, developed nations committed to provide US$100 billion per year for climate finance to help developing nations adapt to climate change (excluding loss and damage). However, from 2010–2012 only US$10 billion was provided. It was hoped that the COP19 would result in a strategic change in the way the developed world would raise the committed capital.

But the COP19 adopted decision text did not make much headway in making material the proposed financial support.

The decision merely “urged” developed countries to raise the capital from a variety of sources, but offered, for example, no strong phrasing for the funds to be public. Similarly, no con-crete deadline was established for the initial capitalization of the Green Climate Fund, through which a significant amount of the pledged US$100 billion would be funneled. The discus-sions throughout the COP19 were of the tone that it “must happen” in 2014. How the Green Climate Fund fares over the next few years will be a key indicator for the health of long-term climate finance.

There was one bright spot related to climate finance: The pledge to resuscitate the Adaptation Fund with US$100 million became reality, but it is a far cry from being the comprehen-sive climate finance agreement needed at the global scale.

loss and Damage

By contrast to the relatively minor progress made on the issue of long-term climate finance, the COP19’s principal achieve-ment arguably was the establishment of a mechanism to address loss and damage “associated with impacts of climate change, including extreme events and slow onset events, in developing countries that are particularly vulnerable to the adverse effects of climate change,” according to the adopted text.7

Difficulties in loss and damage negotiations arose because developing countries were generally unhappy with the pro-posed text establishing the loss and damage mechanism under the adaptation pillar of the UNFCCC. However, a standalone mechanism was, in turn, a non-starter for the U.S., which

Minister Marcin Korolec speaks with U.S. climate envoy Todd Stern at the COP19 in Warsaw.

12

claimed loss and damage was an integral part of adapta-tion. The Center for American Progress summarized the basic fear voiced by the U.S. that creation of a loss and damage mechanism separate from mitigation and adaptation would “eventually lead to an explosive conversation on compensa-tion in future climate talks that may scuttle the 2015 global agreement on emissions reductions”.8

The compromise text proved a tentative success in that a “Warsaw mechanism on loss and damage” was indeed established. The loss and damage mechanism is under the adaptation framework; this point is scheduled to be revisited at COP22 in 2016. The detailed work on the loss and damage mechanism is scheduled to begin next year.3

Other Outcomes

The COP19 decided that it will allow implementation of an important program to reduce emissions from deforestation and forest degradation (REDD+). The conference also revived the Adaptation Fund with US$100 million, albeit this was a drop in the bucket compared to the US$100 billion committed for climate finance. The only item of relative importance to have fallen off the table in Warsaw was the creation of a so-called new market mechanism to complement the Joint Implementation and Clean Development Mechanism. This will be taken up in 2014.

THE WIDER cOnTEXT

The final results of the COP19 should be viewed as part of a wider perspective. As delegations arrived in Warsaw, they found themselves in a wholly new context that set the tone throughout the Conference. First, recent extreme weather events, such as Typhoon Haiyan, gave renewed passion for discussions about climate change and the urgency of progress. Still, meeting emissions targets has proven to be difficult, as was highlighted during the first week of the Conference when the Australian government announced legislation to repeal its carbon tax and Japan dramatically reduced its 2020 emission reduction targets.

The political turmoil was felt both behind the Conference doors and outside them; some groups criticized the government of Poland for supporting the nearby International Coal & Climate Summit (ICCS) organized by the World Coal Association (see page 13 for more detailed coverage of this event). At a key-note speech at the ICCS, Poland’s Deputy Prime Minister of the Ministry of Economy, Janusz Piechociński, explained his government’s support of a coal-industry sponsored event simultaneously with the COP19: Because “coal is the sec-ond-leading energy source in the world” it must be part of a

low-emissions economy.10

Mr. Piechociński was not alone in calling for engagement. This sentiment was perhaps best demonstrated by the readiness of Christiana Figueres to address the coal industry and other attendees at the ICCS, because she believes that to “spare no effort to talk to every single sector” is “definitely a very impor-tant part of [her] job”.2

Despite the major challenges faced at the COP19, the decisions that emerged from this turbulent environment can be reason for optimism: The issue of climate finance remains very much on the agenda and developing nations can look forward with hope to the promise of a loss and damage mechanism to address extreme weather events. Most impor-tantly, however, the road—as bumpy as it might be—to the breakthrough global climate change accord has been laid out in front of the international community to move forward to Lima, Paris, and beyond.

REFEREncEs

1. The Hindu, EU Climate Head Planned, www.thehindu.com/sci-tech/energy-and-environment/eu-climate-head-panned/ar-ticle5380490.ece, (accessed 26 November 2013).

2. Talk Radio News Service, UNFCCC‘s Christiana Figueres Recaps Warsaw Talks on Final Day of COP 19, 22 November 2013, www.youtube.com/watch?v=RNwRUDwt2BY, (accessed 25 Novem-ber 2013).

3. Press Release: UN Climate Change Conference in Warsaw Keeps Governments on a Track Towards 2015 Climate Agreement, 23 November 2013, unfccc.int/files/press/news_room/press_re-leases_and_advisories/application/pdf/131123_pr_closing_cop19.pdf

4. UNFCCC, Bodies of the UNFCC, unfccc.int/bodies/items/6241txt.php

5. Ad Hoc Working Group on the Duban Platform for Enhanced Action, Implementation of All the Elements of Decision 1/CP.17, unfccc.int/resource/docs/2013/adp2/eng/l04a01.pdf, (accessed 26 November 2013).

6. Decision -/CP.19, Further Advancing the Durban Platform, un-fccc.int/files/meetings/warsaw_nov_2013/decisions/applica-tion/pdf/cop19_adp.pdf, (accessed 26 November 2013).

7. Decision -/CP.19, Warsaw International Mechanism for Loss and Damage Associated with Climate Change Impacts, unfccc.int/files/meetings/warsaw_nov_2013/decisions/application/pdf/cop19_lossanddamage.pdf (accessed 26 November 2013).

8. G. Taraska, Addressing ‘Loss and Damage’ in Warsaw, www.americanprogress.org/issues/green/news/2013/11/20/79805/addressing-loss-and-damage-in-warsaw, (accessed 26 Novem-ber 2013).

9. UNFCC, Keynote Address by Christiana Figueres, World Coal Association International Coal & Climate Summit, 18 November 2013, unfccc.int/files/press/statements/application/pdf/20131811_cop19_coalassociation.pdf, (accessed 26 No-vember 2013).

10. E. Lyman, Is There Room for Coal in the Climate Change Debate?, Bloomberg BNA, 18 November 2013, www.bna.com/room-coal-climate-b17179880190, (accessed 26 November 2013).

sPEcIAl cOvERAgE


By Milton CatelinChief Executive, World Coal Association

The World Coal Association hosted the International Coal & Climate Summit (ICCS) at the Ministry of Economy in Warsaw on 18–19 November, an event attended by

around 300 delegates, including policymakers, business leaders, development banks, NGOs, and media. The coal industry host-ing a summit isn’t usually big news—our calendars are full of industry meetings—but the timing of this event provoked some controversy. Warsaw was also host to the latest round of UN climate change negotiations: COP19. Our decision to hold an event in the same city at the same time as climate nego-tiations was branded a “provocation” by some environmental groups.

We didn’t take this decision lightly and knew that there would be some opposition to the event. However, after years of holding side events in the official COP venues at previous negotiations, we decided that it would be a more useful and valuable con-tribution to hold a bigger event, bringing together many more stakeholders, to discuss the important challenge of meeting

global energy demand while reducing emissions. As an industry that provides over 40% of global electricity and 30% of primary energy—forecast to overtake oil over coming years—it’s clear that we have to be part of the solution to climate change.

HIgH-lEvEl EngAgEMEnT

An important factor in our decision to hold an event on this scale was the support we received from the Polish government. As the COP19 host, the Polish government made it very clear

Review of the International Coal & Climate Summit

“As an industry that provides over

40% of global electricity and 30% of

primary energy … it’s clear that we

have to be part of the solution to

climate change.”

Milton Catelin (left) and Deputy Prime Minister Janusz Piechociński (right) speak at a joint press conference at the International Coal & Climate Summit.

14

they wanted a multi-stakeholder dialogue on climate change. The Polish Environment Minister and COP19 President, Marcin Korolec, made the point that energy-intensive industries have the most potential to reduce greenhouse gas emissions, so it makes sense for them to be involved in discussions on actions to reduce these emissions and tackle climate change.

ICCS was endorsed by the Ministry of Economy in Poland and Janusz Piechociński, the Deputy Prime Minister of Poland and Minister of Economy, provided a keynote address. Mr. Piechociński acknowledged Poland’s dependence on coal and talked of how Poland is showing an increasing commitment to emission reduction.

Speaking alongside Mr. Piechociński in the ICCS keynote ses-sion was Christiana Figueres, the Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). Ms. Figueres asked WCA if she could speak at the Summit and, despite facing criticism from some environmental groups about this decision, made it clear that multi-stakeholder dialogue is the only way we are going to meet the challenge. In responding to public letters from a number of groups that had criticized her decision to speak at ICCS, Ms. Figueres stated: “The solutions to climate change offer every government, business and person an opportunity to transform to a cleaner, more sustainable world. For that reason, I am committed to the broadest possible engagement with all sectors.” She also stated: “…in particular we need to engage those who could and should contribute in big ways to the solution. In our fight to reduce global emissions we must be prepared to engage in open debate.”

Ms. Figueres gave a strong speech, calling for steps such as closing all subcritical power plants, implementing safe CCS on all new plants, even the most efficient, and leaving most existing coal reserves in the ground. She also acknowledged that the WCA has been making efforts to promote low-emis-sions, high-efficiency coal as well carbon capture and storage, both of which are essential to successfully addressing climate change. Ms. Figueres said that it showed the WCA accepts climate change as a development risk and that lower coal emissions are an aspirational and achievable goal.

The WCA welcomed Ms. Figueres’ participation in the Summit. Despite not supporting all the steps outlined in her speech, we share her commitment to a multi-stakeholder dialogue. A major aim of the Summit has been to encourage open and construc-tive discussions on the climate challenge. We’re not going to meet our climate objectives if we are not all part of the solution.

Jerzy Buzek, former Prime Minister of Poland, former President of the European Parliament, and now a Member of the European Parliament, also spoke in the keynote session, giving a welcome speech which covered the threat posed by climate change and the fact that coal will continue to be an important fuel for Poland and the world.

THE glOW OF A PARAFFIn lAMP

The final speech in the keynote session was from Godfrey Gomwe, Chair of the WCA’s Energy and Climate Committee and CEO Thermal Coal at Anglo American. He provided the coal industry perspective on these challenges, often speaking in very personal and emotive terms. He talked of the inextricable link between climate change and energy poverty and the need to treat these challenges as integrated priorities.

Mr. Gomwe spoke of his experience growing up without access to modern energy. The first electric light he studied under was when he went to university; until then, he had studied under the glow of a paraffin lamp. With 1.3 billion people in the world living without access to electricity and 2.6 billion relying on traditional fuels for cooking, it’s clear that increasing access to modern energy is a huge challenge. These numbers also highlight the difficulties linked to Christiana Figueres’ sugges-tion to close subcritical power plants: without an affordable, readily available alternative, even more people would be plunged into energy poverty.

Mr. Gomwe talked of the role that can be played by high- efficiency, low-emissions coal technology in reducing emissions from coal use and allowing coal to continue to play a valuable role in global development. Raising the global average effi-ciency of coal plants from the current average of 33% to up to 40% would reduce annual global carbon emissions by two

sPEcIAl cOvERAgE

UNFCCC Executive Secretary, Christiana Figueres, gave a keynote speech calling for the coal industry to be part of the climate solution.


gigatonnes; that’s the equivalent of running the Kyoto Protocol three times over. He highlighted the vital role that should be played by development banks in supporting the use of best available technology for coal: Without the support of these institutions, cheaper, less efficient, and more polluting technol-ogies might be used because they are all that can be afforded in the absence of concessional finance. He stated: “It is impor-tant that the international community recognize that much of the developing world is turning to coal to fuel development. We need to help them do that in the cleanest way possible.”

DIscUssIOn & DIAlOgUE

A high-level panel discussion on the opening morning helped set the tone for the day. ICCS was organized to stimulate open discussion and constructive dialogue on the challenges we face and what can be done. Sasha Twining, an experienced journalist and news presenter, moderated a six-person panel discussion on coal and climate change. The discussion covered the role that can be played by technology in reducing CO2 emissions and what needs to be done to ensure this technol-ogy is used as widely as possible.

Ashok Bhargava, Director of Energy at the Asian Development Bank (ADB), talked about how high-efficiency, low-emissions technologies are already being deployed in China, with a

10% increase in the average efficiency of plants over the last 10 years. This approach has three major benefits in these regions—an improvement in energy efficiency, an increase in energy availability, and a reduction in emissions. The ADB therefore aims to ensure that any newly funded plant must be higher efficiency than the last installed and funded plant in any funded country.

As well as discussing efficiency improvements, the panel also covered carbon capture, utilization, and storage (CCUS) with Brad Page, Chief Executive of the Global CCS Institute (and interviewed on page 4 of this issue of Cornerstone), highlight-ing that both high-efficiency, low-emissions coal and CCUS are needed for coal’s future. Stephen O. Anderson, Future Generations Consulting and Director of Research at the Institute for Governance and Sustainable Development, talked of the investments being made in the U.S. on CCUS, with $500 million so far invested in the technology. He highlighted that, thanks to information dissemination, there is growing public understanding and acceptance of CCUS in the U.S.

TEcHnOlOgy: OPPORTUnITIEs & POTEnTIAl

Alongside the discussions on energy policy and financing of technology, an important focus of ICCS was the technologies, with presentations on current best available technologies, as

The ICCS was attended by around 300 delegates, including policymakers, business leaders, development banks, NGOs, and media.

16

sPEcIAl cOvERAgE

well as what is on the horizon. This included presentations from Alstom and GE on their significant work in developing high-efficiency, low-emissions coal technologies, along with steps to push CCUS forward.

Mike Monea, President of Carbon Capture and Storage Initiatives at SaskPower, gave a presentation on the excit-ing Boundary Dam Integrated Carbon Capture and Storage Demonstration Project in Canada. The project will be the first to fully integrate CCS technology with commercial-scale coal-fired generation. It will capture one million tonnes of CO2 per year, the equivalent of removing 250,000 vehicles from Saskatchewan’s roads (see page 17 for further details on this project).

The second day of the International Coal & Climate Summit focused purely on technologies, under the banner “Technology forum: Clean coal technologies, opportunities and break-throughs”. This was an opportunity for much more detailed presentations and discussion on technology developments that are key to the future of the coal industry. Presenters included Karl Moor (Senior VP and Chief Environment Counsel, Southern Company), Ellina Levina (CCS Unit, Sustainable Energy Policy and Technology Directorate, International Energy Agency), and Professor Maciej Kaliski (Director of the Mining Department at the Ministry of Economy of Poland).

MUlTI-sTAkEHOlDER DIAlOgUE

We faced criticism from some stakeholders for organizing this event but, at the end of the two days, I felt even more strongly the importance of what we had done in hosting the Summit. It’s all too easy to talk of leaving coal in the ground and closing power stations. Our hope in holding ICCS was to encourage constructive dialogue on practical solutions—to start a con-versation that can lead to a better balance between climate

protection and economic development/poverty alleviation. As stakeholders we may not always agree with each other, but certainly we can work together and find some common ground. The range of stakeholders at the Summit demonstrated the commitment to facing the challenges of climate change and energy poverty head-on and working to find solutions.

Leaving coal out of the climate dialogue would mean more missed opportunities to reduce GHG emissions from coal. And the opportunities are substantial. If new coal-fired generating capacity added between 2000 and 2011 had used advanced coal technologies, cumulative emissions of CO2 over that period would have been reduced by two gigatonnes—more than the CO2 emissions of India.

What has been a disappointment is the criticism leveled at the Polish government for endorsing the event and engaging with industry. The commitment Poland has shown in tackling climate change, through hosting climate change negotia-tions twice over recent years, has been largely overlooked. Of course, progress on reaching an agreement on climate change is going to be difficult and slow-moving; it is a tough challenge. But it isn’t helpful to criticize a government that is so obvi-ously committed to this work that they’re prepared to host talks twice, in Poznan in 2008 and now in Warsaw.

We all need to work together to meet these challenges and all of us—governments, business, development banks, NGOs—have a role to play. The International Coal & Climate Summit has demonstrated the coal industry’s commitment to practical solutions on climate change and to open multi-stakeholder dialogue.

Further information on the Summit can be found at www.worldcoal.org/warsawsummit


By Brad WallPremier, Saskatchewan, Canada

When you think of natural resources on the Canadian Prairies, the first thing that likely comes to mind is wheat. While you wouldn’t be incorrect, Saskatchewan’s

resource lineup isn’t limited to that one Prairie staple.

Although we’ve come a long way from our agrarian roots, it’s true that we still boast a strong agricultural economy. With more than 40% of the arable farm land in Canada, we are a leading exporter of wheat, barley, lentils, and mustard, among other things.

To help grow these crops, we have an abundant supply of fer-tilizer. In fact, as the world’s largest producer of potash, with roughly 45% of global reserves, we have a lot of it. Uranium is also plentiful in Saskatchewan, helping to power the global economy. We are the world’s second-largest uranium producer, accounting for nearly 20% of worldwide production.

With a major development in the early 1950s, we also became a player in the oil industry. Today, we are Canada’s

second-largest producer of oil (after Alberta), and we are the sixth-largest oil-producing jurisdiction in North America. It may surprise some, but we export more oil to the U.S. than does Kuwait.

To that list of resources, you can also add coal. People have been mining coal in Saskatchewan since the 1850s, making it one of the earliest resources to be mined in the province. Although it may not be as well known to those outside of Saskatchewan, it’s just as valuable to those of us who live here. In the south-east corner of Saskatchewan, just north of our border with the U.S. (Montana and North Dakota), sits a 300-year supply of lignite coal that is affordable, abundant, and accessible, and has been fueling power plants in Saskatchewan for nearly a century. Today, it’s the baseload fuel of choice for SaskPower, our government-owned power utility, and currently accounts for about 50% of our total power production. It’s also the reason Saskatchewan is the largest per capita emitter of greenhouses gases in Canada.

POWERIng OUR WORlD

Fossil fuels have become an integral part of our society, throughout North America and around the world. They fuel our cars, heat our homes, and generate the electricity that keeps our lights on at night. However, we recognize the production of fossil fuels comes with an environmental cost, as the green-house gas emissions produced by these fuels contribute to climate change. Those of us from jurisdictions that produce fos-sil fuels are working hard to reduce our environmental footprint

“People have been mining coal

in Saskatchewan since the 1850s,

making it one of the earliest

resources to be mined in the

province.”

Keeping Coal Alive on the Canadian Prairies: Carbon Capture and Storage at Work in Saskatchewan

vOIcEs

Often associated with agriculture such as wheat production, Saskatchewan is also a major energy producer with potash, uranium, coal, and oil fields.

18

and develop new energy sources. But the transition from fos-sil fuels to renewable energy takes time, and the challenge of greenhouse gas emissions is one that we must tackle together.

As a result, SaskPower and our government had a decision to make a couple years ago. It was the same decision that many utilities and governments throughout the world are wrestling with today. The Government of Canada was preparing to introduce legislation calling for tougher emissions regulations for coal-fired power plants. These rules were expected to be so stringent that coal plants without a carbon capture system would eventually have to be shut down.

For us, the choice boiled down to this—natural gas vs. coal with carbon capture. Natural gas was the easy choice, as it offered the path of least resistance, particularly with prices dropping as new supplies came on stream. Yet, it was tough for us to dismiss coal, given the ease of access, security of supply, and stability of coal prices. With coal, we knew with certainty what our costs would be in the years ahead. On the other hand, predicting prices for natural gas can be a risky proposition, even with supplies expanding.

Compounding our decision-making difficulty was the pro-posed cost of the carbon capture and storage (CCS) project

in Saskatchewan. Our share of the project was expected to be CAN$1 billion, which would have made it one of the largest capital projects in the history of our province. With just over one million people in Saskatchewan, our tax and rate payer base is relatively small compared to other places. Our cost for the CCS project would amount to approximately CAN$1200 for every man, woman, and child in the province. If we were to proceed with the project, it would be a large expense—and a potential burden—for us to bear.

Ultimately, we decided to proceed with the construction of the SaskPower Boundary Dam Integrated Carbon Capture and Storage Demonstration Project. Prior to making our decision, we took a variety of factors into consideration, including those mentioned above. We also factored in our pioneering spirit of innovation in Saskatchewan, which has led to breakthroughs in nuclear medicine, crop science, farm machinery…and carbon storage.

sAskATcHEWAn lEADIng THE WAy

Unbeknown to some, Saskatchewan has been a leader in the storage of carbon dioxide (CO2) since the mid-1980s, when the first CO2 enhanced oil injection in the province began as a small pilot project, and it has grown from there.

Cenovus Energy has invested more than CAN$1.1 billion in Saskatchewan’s first commercial-scale CO2 enhanced oil recov-ery project (EOR) in an oil field near Weyburn in southeast Saskatchewan. As an example of cross-border cooperation, Cenovus buys CO2 that would otherwise be emitted from a coal gasification plant in North Dakota. The project will produce 200 million incremental barrels of oil, and oil production has increased by 60% as a result. Our second commercial-scale project has enjoyed similar success. Apache Canada’s invest-ments in a project in the Midale reservoir will produce 67 million barrels of incremental oil and store eight million tonnes of CO2. Together, the projects make an impressive contribution to the reduction of greenhouse gas emissions by storing more than 25 million tonnes of CO2 safely underground.

At the same time, the most significant global research project ever undertaken on CO2 storage took place in the same res-ervoirs. The International Energy Agency (IEA) Greenhouse Gas Weyburn-Midale Carbon Dioxide Monitoring and Storage Project was the world’s largest monitored CO2 geological storage project and was set up specifically to monitor the CO2 stored by Cenovus and Apache. The project has provided sci-entists around the world with a better understanding of the geological sequestration of CO2.

In addition to establishing Saskatchewan as a leader in CO2 storage, the IEA, Cenovus, and Apache projects showed us that

vOIcEs

The Government of Saskatchewan, led by Premier Brad Wall, supported the development of the Boundary Dam project.


CCS could be done safely. We had proven it here in our prov-ince for more than a decade. Helping make our decision easier was the fact the Boundary Dam project was located close to oil fields that would enable SaskPower to sell captured CO2 to help defray costs. The final piece was a willing partner in the federal government which generously contributed CAN$240 million to the project.

sAskPOWER BOUnDARy DAM InTEgRATED ccs DEMOnsTRATIOn PROJEcT

When our project begins commercial operation in the first quarter of 2014, it will be the world’s first commercial-scale power plant with a fully integrated carbon capture system. The project involves a retrofit of a 43-year-old generating unit at SaskPower’s Boundary Dam Power Station near Estevan in southeast Saskatchewan. It will generate 110 MW of electricity and capture and safely store one million tonnes of CO2, or 90% of its CO2 emissions, which is the equivalent of taking 250,000 cars off the road every year. The CO2 will be sold to Cenovus for injection in its Weyburn field. The cost of electricity pro-duced from this unit will be equivalent to, or less than, the cost of combined cycle natural gas.

This is an exciting time for CCS in Saskatchewan, as SaskPower

is also involved in another project that is set to open in 2014. The utility is partnering with Hitachi Ltd. to build a CAN$60 million carbon capture test facility at SaskPower’s coal-fired Shand Power Station near Estevan. The new facility will provide a venue for international researchers and companies to test their carbon capture technologies.

Reducing greenhouse gas emissions is not viewed solely as a local, provincial, or even national issue. Instead, it’s a global issue that we must overcome together, and that’s what we’re trying to do in Saskatchewan. SaskPower has estab-lished the CCS Global Consortium to share knowledge it has gained from the development of the Boundary Dam project. The consortium will provide unprecedented access to some of the world’s most advanced policy, research, and technical expertise, including SaskPower’s pioneering business case and technology platform. It will also serve as a conduit for global experts to explore environmental technologies together.

Some may ask why this all matters—especially in a province the size of Saskatchewan. Some may ask why we are doing this. The answer is bigger than SaskPower and Saskatchewan.

Coal power is not going anywhere, at least not anytime soon. Although some provinces and countries are shutting down coal plants or converting them to natural gas, many

The 110-MW Boundary Dam Carbon Capture and Storage Demonstration Project will begin capturing CO2 in 2014.

20

other jurisdictions are growing their coal resources. The World Resources Institute estimates nearly 1200 new coal-fired power plants have been proposed with an installed capacity of 1400 GW.1 Three-quarters of these plants would be built in China and India. According to the IEA, coal’s share of the global energy mix continues to rise, and will come close to sur-passing oil as the world’s top energy source by 2017.2

FOcUsIng On THE EnvIROnMEnTAl IMPAcT OF FOssIl FUEls

To some, the only way to address climate change is to imme-diately embrace renewable energy, such as wind, solar, and geothermal. For them, there is no need for a transition. Somehow we can go directly from fossil fuels to a new, more virtuous energy system. These people are well meaning and I acknowledge that CCS represents just one approach to help meet our shared goal of reducing greenhouse gas emissions and combating climate change. However, it’s time to turn away from this debate and focus on the task at hand—dealing with the environmental impact of fossil fuel use in a compre-hensive fashion, which includes CCS.

To make this happen, we need more research in order to develop more efficient and lower cost capture technologies. We’re confident the economics of CCS will continue to improve, but as the IEA notes, governments throughout the world must do more to motivate industry to accelerate the development and

deployment of CCS technology.

That’s why we believe Boundary Dam is such an important project. CCS has yet to be deployed on a large scale and Boundary Dam will provide that large-scale commercial appli-cation. It will give us a better understanding of the true costs and the full possibilities for CCS. Although our situation may be different from other jurisdictions—financially, geographi-cally, etc.—it’s vitally important that we are moving in the right direction and going to a place where we can perfect the technology for the benefit of everyone.

As global partners, we have a common purpose—developing and deploying CCS technology on a large scale. That’s the only way we can reduce greenhouse gas emissions while still nurturing economic growth at home and around the world. Simply put, the world needs us to come together on CCS to ensure a green and prosperous energy future for us all.

REFEREncEs

1. World Resources Institute, New Global Assessment Reveals Nearly 1,200 Proposed Coal-Fired Power Plants, WRI Insights, 20 November 2012, insights.wri.org/news/2012/11/new-glob-al-assessment-reveals-nearly-1200-proposed-coal-fired-power-plants, (accessed 9 October 2013).

2. International Energy Agency, Coal’s Share of Global Energy Mix to Continue Rising, with Coal Closing in on Oil as World’s Top Energy Source by 2017, 17 December 2012, www.iea.org/newsroomandevents/pressreleases/2012/december/name,34441,en.html, (accessed 9 October 2013).

vOIcEs

Futuregen 2.0 continues Phase 2 Activities

The FutureGen 2.0 project in Morgan County, Illinois (U.S.), is a first-of-its-kind near-zero emissions power plant that will demonstrate carbon capture and storage (CCS) on

a commercial scale. The program involves repowering the Meredosia Energy Center with oxy-fuel combustion technol-ogy to capture more than 90% of the plant’s CO2 emissions and bringing other emissions to near-zero levels. The CO2 will be transported 30 miles to a permanent underground storage site, using safe, proven pipeline technology. The capital cost of the project is approximately $1.65 billion, with $1 billion in federal funds from the American Recovery and Reinvestment Act and the remainder from non-federal funds.

Recently, the project has made significant progress spurred by the approval of a power purchase agreement by the Illinois Commerce Commission followed by approval from the U.S. Department of Energy (DOE) to start Phase 2. Phase 2 includes the final permitting and design activities that precede a decision to begin construction.

In April, DOE released a draft Environmental Impact Statement (EIS), concluding the project will have no major negative impacts on the environment. A final EIS and record of decision committing federal funds for construction of the project are expected in late 2013.

For more information, visit the FutureGen website at www.futuregenalliance.org

The Meredosia Energy Center in Meredosia, Illinois.


By Kurt WalzerManaging Director, Clean Air Task Force

Pam HardwickeSpecial Projects Facilitator, Clean Air Task Force

John ThompsonDirector, Fossil Transition Project, Clean Air Task Force

ccs Is URgEnTly nEEDED TO ADDREss clIMATE cHAngE

If anything, fossil fuel use throughout the world is growing, not declining. The use of fossil fuel is not going away, and to pretend otherwise is simply to avoid the facts. Coal provides

40% of the world’s electricity. Since the beginning of the 21st century, it has been one of the fastest-growing energy sources globally. While coal use in OECD countries remained flat over the last decade, coal use has grown exponentially in develop-ing nations, as is shown in Figure 1.

Despite coal’s economic benefits, the environmental impacts for using coal cannot be overlooked, specifically the CO2 emis-sions that occur from coal use.

Measured CO2 concentrations in the atmosphere exceeded 400 ppm in 2013, a level not seen on Earth in three million years. This measurement is part of an alarming trend. Since the start of the industrial revolution, atmospheric CO2 concen-trations have been growing, and the rate has increased even

more rapidly in the past few decades. As a result, global tem-peratures have risen, and nine of the 10 warmest years in the modern meteorological record have occurred since the year 2000.

Two categories of stationary sources, which are generally operated using coal or natural gas, account for almost 66% of the roughly 30 gigatonnes (Gt) of CO2 released annually from human activity—power plants (11.9 Gt) and industrial facili-ties (7.4 Gt). Emissions from these two categories are growing. Carbon capture, utilization, and storage (CCUS) and ultimately just carbon capture and storage (CCS) are needed to address these emissions. If no action is taken, by 2050:

• Power plant emissions will nearly double (24 Gt). A majority of the growth in cumulative power plant CO2 emissions can be attributed to the astounding rate at which coal-fired power plants are being built in developing countries. China has built an average of about one new plant per week for much of the past decade. From this growth, China now has twice the number of coal-fired power plants as the U.S. By 2015, China plans to have more than 900 GW of such plants in operation—three times the size of the U.S. fleet.

• CO2 emissions from all large, stationary industrial sources (whether fueled by coal or gas) are also rising. Under business-as-usual projections for the year 2050, these emissions will grow from 7.4 Gt to 12.5 Gt.2

For the industrial sector, the International Energy Agency (IEA) concludes that “CCS represents the most important new tech-nology option for reducing direct emissions in industry, with the potential to save an estimated 1.7 to 2.5 Gt CO2 in 2050.”3a

Within the power sector, IEA estimates that around 79 Gt of CO2 can be captured and stored by the power sector from 2010 to 2050, and coal-fired power plants through 2050 will

Beyond Roadmaps to Deployment: Ensuring CCS Is a Component of Mid-century CO2 Emissions Control

“A large-scale power plant with

CCS can no longer be considered

FutureGen, it is ‘NowGen’.”

Without CCS it is projected that CO2 emissions from power plants will double by 2050.

22

be able to capture 69 Gt, or 87% of cumulative emissions from the entire power sector;3b furthermore, natural gas power plants with CCS will capture 9.2 Gt, or 12% of their total emis-sions. In the year 2050 alone, 4.4 Gt of CO2 will be captured by the power sector.3c

Advantages of ccs

While CCS in the power sector competes against other low-emission technologies such as nuclear, renewables, and efficiency improvements, it offers several advantages:

• CCS allows developing nations to use domestic fossil fuels that they may be unwilling to abandon due to energy secu-rity or economic concerns.

• CCS can be retrofitted. About one-third of today’s global power plant capacity is less than 10 years old. These plants are assets with many years of useful life remaining.

• CCS is a pollution control technology, but with CO2-EOR, it acts as an energy production technology as well. EOR could provide an income stream for very large volumes of CO2 from power plants—much larger than was thought five to 10 years ago. The potential scale of demand can drive down technology costs based on returns to scale. This also opens up additional possibilities for expanding infrastructure.

ccs Is READy TO BE DEPlOyED AT scAlE

Large, integrated CCS projects, driven by CO2-EOR, began in the U.S. in the 1970s and 1980s at industrial facilities. Now this experience is migrating to the power sector. Experience from analogous industrial technologies has shown that the scale-up

required for decarbonization of the power sector and indus-trial sectors by mid-century is achievable.

ccs Is nowgen

A large-scale power plant with CCS can no longer be consid-ered FutureGen, it is “NowGen”. Today, the first commercial power plants with CCS are under construction. In fact, the first proposed design of the U.S. FutureGen project, an IGCC with 90% capture of CO2, is the design incorporated into a proposed commercial power/urea plant—the Texas Clean Energy Project.

Although these first-of-a-kind units are at the top of the cost curve, it’s important to recognize that the technology and commercial risks associated with CCS are well understood based on a long history. Since the 1970s and 1980s, large industrial plants have captured and stored large amounts of CO2 on a per-plant basis. Examples include:

• Val Verde natural gas processing plant (Texas, U.S.) has cap-tured and effectively stored 1.3 million tonnes CO2/yr since 1972.

• Shute Creek natural gas processing facility (Wyoming, U.S.) has captured and effectively seven million tonnes CO2/yr since 1986.

• The Century plant (Texas, U.S.) has captured and effectively 8.4 million tonnes CO2/yr since 2010.

This experience is now benefiting power plants, where CO2 emissions can be reduced by more than 90%. Coal plants in North America that are under construction or are most likely to reach the financial status necessary to move forward plan to have some level of CCS installed when they open. Examples include the 582-MW Kemper plant in Mississippi, the Texas Clean Energy Project, and SaskPower’s retrofit/rebuild of Boundary Dam.

Each of the components of CCS has a long history of use in the U.S. and around the world.

• Over 850 Mt of CO2 have been geologically trapped and effectively stored underground in Texas from CO2-EOR operations over the last 30 years.

• There are presently approximately 4000 miles of CO2 pipe-line in the U.S.

• The main pre-combustion capture technologies, Selexol and Rectisol, have been commercially available since the 1950s and 1960s with over 100 applications each across the world.

• Post-combustion capture has been successfully applied to exhaust gases from both natural gas and coal-fired power plants, with commercial guarantees offered from several vendors.

FIGURE 1. Growth in global coal consumption1

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ccs in a Timeframe that Matters

Experience from various industrial analogs has shown that CCS can be scaled in a timeframe that is meaningful to the climate—by mid-century. China’s power sector is the most recent example of widespread, rapid deployment of energy technol-ogies, with a projected expansion of 900% between 1987 and 2015.1 In the U.S., power generation also saw a period of rapid expansion—growing more than 400%, from 69 GW to 316 GW of installed capacity, between 1950 and 1970. The U.S. also added 150,000 miles of natural gas pipelines between 1960 and 1980. With respect to injection wells, CCS would require several thousand additional injection wells in the U.S., but this will likely be significantly below the number of existing oil-field brine injection wells (i.e., 150,000).4 Figure 2 shows several examples of industrial analogs that scaled up to a level comparable to what would be necessary for decarbonization of coal plants in the U.S. power system over a 20-year period.

WHAT cAn DRIvE ccs DEPlOyMEnT?

key Pathways for Reducing costs

Scale

Deploying CCS will be a crucial part of reducing costs. Some estimates indicate costs will reduce by 50% between a first-of-a-kind plant to an Nth-(4th or 5th)-of-a-kind plant using the same technology.5 Deploying at large scale (e.g., 100 GW) is projected to drop construction costs even further—30% below the Nth-of-a-kind plant level, as is shown in Figure 3.6

New Business and Policy Models

Applying innovative business models to CCS can also make it more economical. For example, NRG’s Washington Parrish coal-fired power plant is developing a 75-MW gas turbine to provide make-up power for the energy needs of the future CCS project. Although the CCS project has not broken ground, the additional generation capacity will sell into the market in the meantime, creating additional value. Such a configuration, under a partial CCS model, could also sell the make-up power into the market at peak demand times and use the power for CCS operations during lower demand, which will improve project profit margins (or reduce costs).

This strategy is similar to the flexibility provided for the pro-posed U.S. New Source Performance Standards (NSPS) on new coal-fired power plants. The NSPS provides up to eight years of flexibility once the power plant is in operation before CCS must begin at the facility. This allows projects to be more

profitable by selling the planned make-up power to the grid in the early years of the project, when cash flow is most valuable.

Technology Advancement

Advanced fossil generation technologies are under devel-opment that could radically reduce the cost of CCS on both coal and gas power plants while allowing for 100% levels of CO2 capture. These include chemical looping and novel gas-oxy combustion processes that use CO2 as a working fluid. There are also potential cost improvements from technologies targeting post-combustion carbon capture. These include phase-changing absorbents, metal-organic frameworks, and solvent-membrane hybrids.

FIGURE 2. Past energy infrastructure over 20-year growth period4

FIGURE 3. Projected CCS construction cost reduction starting from Nth-of-a-kind projects6

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Intl. Natural Gas Production (TCF): 1970-90 U.S. Generating Capacity (GW): 1950-70CCS Capacity (GW): 2010-30International Oil Production 1965-1985Domestic Oil Production 1950-1970

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$/net kW$/gross kW

Assumes 100 GWdeployed globally by late 2020’s

24

cO2-EOR May Be key to Economical ccs

The First Key “U”

CO2-EOR transforms CCS into CCUS, where the “U” stands for utilization. CO2-EOR makes carbon capture and storage an energy technology, rather than just an emission control tech-nology. The difference is profound. Seen through the lens of CCS, capture and compression is a significant parasitic load on a power plant or industrial facility, increasing fuel consump-tion by as much as 30%. But with CCUS, every joule of energy lost creates up to 4.3 joules of energy in the form of oil.

CCUS adds several tangible benefits, including:

• Paying some or all of the CCS through oil revenue• Justifying capture and compression energy penalties by

producing new energy• Broadening the rationale for CCS to include energy security• Anchoring CO2 storage in a technology with decades of

commercial experience

In the past, CO2 prices (historically in the range of $9–26/tonne of CO2 in North America) was sufficient to balance the costs of CCS on the “low-hanging fruit” of some industrial facilities with high-purity CO2 exhaust (e.g., chemical processing plants and natural gas processing projects). High oil prices will create the economic conditions needed for integrated CCS-EOR proj-ects associated with power generation and the steel industry. The Clean Air Task Force estimates the revenue from CO2 used in EOR in the U.S. was $37.83/tonne CO2 in late 2011.7

CO2-EOR accounts for about 6% of the total oil produced in the U.S.,8 but estimates show it has the potential to account for 50% of production and has enormous storage capacity. According to the U.S. National Energy Technology Laboratory (NETL), CO2-EOR could increase domestic oil production by 4.6 million bbl/day (compared with current U.S. produc-tion levels of 8.9 million bbl/day).9 This would require 20.8 billion tonnes of CO2, equivalent to capturing 90% of the CO2 emissions from 105 GW of coal-fired plants for 30 years.10

CO2-EOR is not limited to the U.S. Estimates of EOR capacity are less certain in China, but estimates show 43 billion bbl of oil could be produced through consumption of 12 Gt CO2.11 Global CO2 storage estimates for EOR are both less recent and less cer-tain; IEA estimates global capacity at 140 Gt CO2 based on the top 10 oil basins, but total estimates are as high as 320 Gt CO2.12 Note that this is enough to store all anthropogenic CO2 for about 10 years. Thus EOR isn’t a complete storage solution, but it can play a crucial role in building needed pipeline infrastructure, widely spreading CO2 storage know-how, and creating a large demand pull for lower cost and truly zero-carbon technologies.

Other Potential “U”s

There are other opportunities that are not yet fully understood or developed but may be promising for producing zero-carbon fossil energy. CO2-EOR has been applied to conventional oil pay zones and more recently to residual, naturally “water-flooded” oil zones. However, developers of shale oil in the Bakken Formation in the U.S. are actively exploring using CO2-EOR to extend oil production.13 More broadly, the potential for storage in shale plays may be quite large. A recent study by Advanced Resources International indicates that the Marcellus Shale may have the potential to store 160 billion tonnes of CO2.14 Saline may also be an interesting “U” in utilization. Work by Lawrence Livermore National Laboratory indicates that brine produced from geologic formations at preassure may significantly reduce the cost of desalinization while providing additional options for CO2 subsurface pressure management.15

Thinking Outside the Box

CCS Costs in China May Be Lower than in the West

It is important to note that capture costs may be lower in China than in the West, suggesting that Chinese CCUS projects could already be economic, although constrained by some noneco-nomic factors. Huaneng Power estimates the cost of their CCS technology to be about $39/tonne in the Chinese market, based on their experience with the Shidongkou power plant near Shanghai. Duke Energy and Huaneng are currently undertaking a feasibility study to retrofit Duke’s Gibson 3 power station, which may help clarify the potential cost in a U.S. market.

The Role of Natural Gas

Natural gas prices in the U.S. and Canada are low, relative to the rest of the world, and forecasts of future prices suggest price increases will be low enough to keep new natural gas combined cycle (NGCC) power plants as the cheapest new source of electricity. In the U.S., NGCC-CCUS is expected to be among the lowest cost, low-carbon power alternatives. The U.S. DOE estimates that an NGCC with 90% capture and stor-age in a saline aquifer has a cost of $90/MWh today,16 and today’s CO2 prices could lower that by as much as $20/MWh.

As a result, niche markets in the U.S. and Canada have the potential to build out an important number of NGCC-CCUS plants. For example, California has a CO2 cap-and-trade program and a standard to restrict carbon intensity of trans-portation fuels. California regulators have expressed a desire and willingness to recognize CO2-EOR as eligible to earn credits under both programs. If this can be accomplished by adapting

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existing state policies in the next two years, the revenue from credits would likely make NGCC-CCUS electricity competitive with uncontrolled power sources.

Natural gas can be an advantageous fuel for power genera-tion with CCS for several reasons. First, the capital cost of NGCC turbines are roughly one-third those of conventional coal-fired power plants. Also, NGCC plants produce roughly 60% less CO2 than conventional coal per unit of electricity generated, which results in considerably less CO2 to capture, compress, and store.

Because the post-combustion capture technologies used on NGCC and coal combustion plants are basically the same, the application of CCS on NGCC units will have cross-over benefits to coal-fired power plants. For example, vendors such as Flour and Mitsubishi Heavy Industries initially offered performance guarantees for NGCCs before coal combustion plants due to industrial experience with gas reforming and power settings, which paved the way for technology performance guarantees to coal-fired power plants.

Industrial Sources

Industrial sources of CO2 typically have higher concentrations of CO2, which leads to lower CO2 capture costs. Deployment of CCUS/CCS at such facilities can help create the necessary infrastructure (i.e., pipelines, etc.) for widespread deployment of CCS on power generation.

CCS is considered the only available technology option to systematically reduce CO2 on a large scale in the industrial sector, especially in the production of cement, iron and steel refining, and other chemical and petrochemical applications. The IEA claims that rapid and large-scale deployment of CCS in iron and steel production facilities alone can avoid the emission of 1.1 Gt of CO2 by 2050, while up to 1 Gt of CO2 can be avoided in global cement production if CCS is widely deployed.3d

Many of the current large-scale integrated projects in opera-tion or under construction capture CO2 from gas processing, syngas clean-up (in some cases for power production), fertilizer production, ethanol production, and hydrogen production.3e These projects remove CO2 as a necessary processing step in the manufacture of a product. Many of these projects are storing or will store CO2 through EOR.

Policies as catalysts for ccs

There are two policy vehicles under consideration in the U.S. to show how targeted policies can begin to move deployment forward.

CO2-EOR Incentives—A Win-Win

As noted above, CO2-EOR has significant potential to increase U.S. oil production with important economic and energy secu-rity benefits. In addition, the technology cost reduction from the scale of CCS deployment and the build-out of infrastructure can position the U.S. to have a fully zero-carbon power system.

U.S. federal incentives for CO2-EOR could help close the initial cost gap of capturing CO2 from both industrial and power sources and start the build-out of infrastructure (pipelines to distant power plants). The National Enhanced Oil Recovery Initiative (NEORI) is currently calling for U.S. federal incentives to close that gap. The program will be at sufficient scale to have an impact on technology cost reduction, and competitive bidding for the credits will promote investment in innova-tion. In addition, because the oil can’t be produced without additional CO2 supply, and it primarily displaces foreign oil consumption, the incentive can be self-financing from a fiscal perspective. CATF is participating in this collaborative effort, which includes coal companies, power companies, other environmental NGOs, labor unions, and state officials, and is led by the Center for Climate and Energy Solutions and the Great Plains Institute.

The Proposed EPA Rule Doesn’t End U.S. Coal, It Starts CCS

On 20 September 2013, EPA concluded for the first time that partial CCS is the Best System of Emissions Reductions (BSER) for new coal plants. If finalized as proposed, the rule will require that all new coal plants meet an emission rate between 1050 lb CO2/MWh and 1100 lb CO2/MWh, a reduc-tion that is approximately 40% below uncontrolled emission levels.

At the Clean Air Task Force, we believe that this rule will help the coal industry. We think the rule provides the certainty that is needed with respect to future carbon liability. Most proposed coal-fired power plants in the U.S. in the last five years already included CCS in order to limit this uncertainty facing investors. Second, the rule’s flexibility and partial capture requirement reduce CCS cost of electricity to only 13% above that of an unconventional coal plant.17 Finally, we believe that this rule sends a signal that CCS deployment is helping CCS move down the cost reduction curve. Certainty, flexibility, and cost reduction will help position coal globally with respect to other low-carbon technologies (e.g., nuclear) and in the U.S. if and when rising gas prices allow new coal power to become more competitive.

26

WHAT DOEs sUccEss lOOk lIkE?

getting to “critical Mass”

If a “critical mass” of CCS projects can be built across the world by 2035, CCS becomes a real option that enables governments to adopt regulations, laws, treaties, and other policies that mandate deep cuts and near-zero CO2 emissions by mid-century. What does critical mass look like? It is enough projects to:

• Reduce costs.• Improve performance.• Expand pipeline and storage infrastructure.• Distribute CCS/CCUS projects and infrastructure globally,

including in developing countries.

Milestones

At the Clean Air Task Force we see certain milestones which, if met, would allow for worldwide deployment of CCS projects within the next three years.

In China

• Establish the initial CO2-EOR infrastructure (primarily from industrial sources).

• Establish the first commercial-scale CCS power plant proj-ects using Chinese capture technology.

• Establish strong CCUS goals within the next five-year plan framework.

In North America

• Establish a first wave of large-scale CCUS power plants.• Expand EOR infrastructure through high-purity, low-cost

industrial sources.• Finalize meaningful U.S. EOR incentives and EPA CO2 NSPS

regulations.• Expand state and provincial incentive programs that drive

CCUS first commercial plants.

Note that California has laid a promising foundation by recog-nizing CO2-EOR in key climate policies.

Broadly

• Companies and governments in China and North America must understand and act on the power and industrial sector/EOR opportunity.

• Establish significant partnerships between Chinese-Western companies that speed both CCS innovation and early projects.

• Advance key early-stage CCS technologies to higher stages of development.

REFEREncEs

1. U.S. Energy Information Administration, Countries, International Energy Statistics, 2013, www.eia.gov/countries/data.cfm

2. International Energy Agency, Technology Roadmap: Carbon Capture and Storage in Industrial Applications, 2011: Paris: IEA/UNIDO, p. 11.

3. 3a. International Energy Agency, Energy Technology Perspec-tives 2010 – Scenarios and Strategies to 2050. Paris: OECD/IEA, 2010, p. 161; 3b. Ibid, p. 119; 3c. Ibid, p. 110; 3d. Ibid., p. 184; 3e. Ibid., p. 172.

4. A. Cohen, M. Fowler, K. Waltzer, “NowGen’’: Getting Real about Coal Carbon Capture and Sequestration, Electricity Journal, 2009, 22 (4), 28–29.

5. M. Al-Juaied, A. Whitmore, Realistic Costs of Carbon Capture, Discussion Paper 2009-08. Cambridge, MA: Belfer Center for Sci-ence and International Affairs, July 2009, pp. 12, 16.

6. B. Phillips, De-Carbonizing the U.S. Coal Fleet. Prepared by The NorthBridge Group for the Clean Air Task Force, November 2010.

7. M. Fowler, J. Thompson, B. Phillips, D. Cortez, How Much Does CCS Really Cost? White Paper, Clean Air Task Force, 2012, p. 5.

8. Improving Domestic Energy Security and Lowering CO2 Emis-sions with “Next Generation” CO2 Enhanced Oil Recovery (CO2-EOR). Prepared by ARI of NETL/DOE, 20 June 2011, www.netl.doe.gov/energy-analyses/pubs/storing%20co2%20w%20eor_fi-nal.pdf

9. British Petroleum, Statistical View of World Energy, 2013, www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013.html

10. V. Kuuskra, P. Depietro, CO2 Enhanced Oil Recovery: The En-abling Technology for CO2 Capture and Storage, Cornerstone, 2013, 1 (4).

11. V. Kuuskra, Screening-Level Assessment of CO2 Enhanced Oil Re-covery Opportunities In China. Prepared for Powerspan Corp., August 2009.

12. IEA Greenhouse Gas R&D Programme (IEA GHG), CO2 Storage in Depleted Oilfields: Global Application Criteria for Carbon Diox-ide Enhanced Oil Recovery, 21 December 2009, www.globalcc-sinstitute.com/publications/co2-storage-depleted-oilfields-global-application-criteria-carbon-dioxide-enhanced-oil

13. K. Cashman, Bakken Explorers 2013: EOR to Improve Recovery to more than 25%, Petroleum News Bakken, 11 August 2013, www.petroleumnewsbakken.com/pntruncate/244464591.shtml

14. M. Godec, Assessment of Factors Influencing Effective CO2 Stor-age Capacity and Enhanced Gas Recovery in the Marcellus Shale, Energy Procedia, 2013, 37, 6644–6655.

15. R Aines, T. Wolery, W. Bourcier, T. Wolfe, C. Hausmann, Fresh Water Generation from Aquifer-Pressured Carbon Storage: Fea-sibility of Treating Saline Formation Waters, Energy Procedia, 2011, 4, 2269–2276.

16. M. Woods, L.R. Pinkerton, E. Varghese, Updated Costs (June 2011 Ba-sis) for Selected Bituminous Baseline Cases. Washington, DC: DOE/NETL, 2012, p. 49. Available for download at: www.netl.doe.gov/en-ergy-analyses/refshelf/PubDetails.aspx?Action=View&PubId=455

17. M. Fowler, J. Thompson, B. Phillips, D. Cortez, How Much Does CCS Really Cost? White Paper, Clean Air Task Force, 2012.

The authors can be reached at [email protected], [email protected], and [email protected]

vOIcEs


By Nicholas NewmanContributing Author, Cornerstone

Emitting CO2 is intended to be an expensive activity for the 12,000 or so companies, in over 30 countries, that are registered in the European Union’s Emission Trading

System (EU ETS). Established in 2005, it is the world’s first large-scale international emissions trading system. The reduc-tion in economic activity that followed the financial crisis of 2008 decreased demand for emissions certificates or allow-ances and prices fell to levels too low to give industry any incentive to reduce carbon emissions. Germany, the largest economy in the region, saw its emissions rise 1.5% in 2012.1 An adjustment to the supply of emissions certificates was passed in the European Parliament on 3 July. However, Pöyry Management Consulting (UK) energy consultant Simon Henry observes: “…although the vote was positive there are still subsequent legislative hurdles to be passed before the legisla-tion can come into force.”2 For instance, a positive vote in the EU’s Council of Ministers is necessary, which in turn requires Germany’s support, which may now be possible after the oust-ing of Philipp Rösler as the German economy minister, who had strongly opposed the proposal. Previously, German policy makers were delaying making their position known because of their election. However, now that the election is settled, progress can resume on the question of how to reform the $69.5 billion ETS.

WHAT Is THE ETs?

The ETS is a market in which Europe’s participating compa-nies of selected manufacturers and utilities can buy and sell

the “right” to emit CO2. The European Commission set emis-sions limits for each designated industry, focusing primarily on energy-intensive industries such as power plants, cement fac-tories, glass making, and intra-European flights which together account for nearly half of Europe’s total CO2 emissions.

The total number of emission certificates or allowances is regulated by the European Commission, which sets an annual limit or cap. In Phase 1 of the ETS, 2005–2007, national governments provided free emissions certificates to all com-panies within the ETS. In Phase 2, 2008–2012, companies were required to buy a small proportion of their emission cer-tificates at auction. In Phase 3, starting in 2013, designated companies and utilities have had to purchase their requisite emission certificates or allowances. Each certificate or allow-ance is worth one tonne of CO2 or the equivalent amount of two tonnes of nitrous oxide (N2O) and perfluorocarbons (PFCs) emissions. Any unused certificates can be sold in the market to companies with a shortfall. In total, Henry points out, “the EU Commission has approved 6.6 billion tonnes of CO2 allowances being freely allocated over the course of Phase 3. Nevertheless, this only represents 43% of the total quan-tity of allowances over Phase 3.” After each year, companies must hand in sufficient certificates to cover all their emissions within the emission trading area. Companies that fail to obtain sufficient permits to cover their emissions can be heavily fined.

THE PROBlEM

The foundation of the ETS is based on the conclusion that imposing a cost on CO2 emissions would lead to reductions. In reality the results have been more complicated. Coal pro-ducing and using countries such as Spain, the UK, Germany, and Poland cannot easily change their energy mix, which could risk the one million jobs associated with the coal industries. In addition, it is difficult for such countries to turn away from the benefits of energy security. Thus, even with the implementa-tion of the ETS, the EU uses more coal today than it did in 2005.

Some believe that the lack of the intended results from the ETS

Implications of EU ETS Reform Proposals

EnERgy POlIcy

The EU ETS has the potential to be a global leader in the struggle to reduce CO2 emissions, if it can get back on track.

“Some believe that the lack of

the intended results from the ETS

is due to its inflexibility...”

28

is due to its inflexibility: The number of emission certificates was fixed for the period 2005–2020 without an inbuilt capac-ity to respond rapidly to any significant changes in demand. Hence the economic slowdown in Europe reduced demand for emission certificates or allowances. Moreover, the crediting of cheaper and equivalent UN Certified Emissions Reduction Certificates, as well as UN offsets called Emission Reduction Units, against emissions in Europe further reduced demand for European emission certificates.3 The consequence was a surplus of nearly two billion certificates, which in turn led to a price collapse from a high in June 2008 of €30 to just €3.30 per tonne CO2 in February 2013.4

Others may argue that the the current emission certificate prices simply reflect the economic realities in the EU. As a result of the global economic crisis demand for emission allowance decreased, leading to lower prices.

Faced with the prospect of a further injection of carbon emis-sion certificates under Phase 3, a proposal in the European Parliament to postpone the auctioning of 900 million allow-ances designated for 2013–2015 to the years 2019–2020 was put forward. It was subsequently passed on 3 July 2013. The price of a carbon emission certificate rose to €4.75, which is still 50% below its 12-month high of €9 and is still too low to discourage emissions and meet the EU’s carbon reduction objectives. Consequently, the price crash in ETS certificates encouraged Europe’s power companies to switch off their gas power stations in favor of less expensive coal-fired power stations.5 Therefore, the EU needs a mechanism that obtains increased emission reduction targets without an exces-sive increase in price, which would hurt European industrial competitiveness. The necessity for immediate short-term measures as well as the need for structural reform has been recognized and the debate has begun.

DEBATIng THE ETs REFORMs AnD PROPOsED OPTIOns

At present, over 200 stakeholders have responded to the EU‘s proposals to make the ETS fit for purpose. The European Commission’s Green Paper “A 2030 framework for climate and energy policies [Com (2013 169] G” identified the following six options for structural reform:

1. Increasing the EU’s greenhouse gas emissions reduction target for 2020 from 20% to 30% below 1990 levels

2. Retiring a certain number of Phase 3 allowances perma-nently

3. Revising the 1.74% annual reduction in the number of allowances to make it steeper

4. Bringing more sectors into the EU’s Emission Trading System5. Limiting access to international credits

6. Introducing discretionary price management mechanisms such as a price management reserve

Overall, SPCo\R Energy Consultant John Kirby claims, “Extension to the scope of ETS is the one that industrialists will want.” Option 6 of the Commission’s proposals—to build in flexibility via an independent authority to manage the supply of allow-ances or the introduction of a rule-based mechanism that adjusts supply to demand—is most likely to be adopted.6

WHO sUPPORTs REFORMs?

Broadly in favor of measures to strengthen the ETS are several member states including the UK, France, Italy, Slovakia, and six others. Companies also in favor include Shell, EON, SSE, ENEL, and RDSA. EURELECTRIC, the European-wide lobby group that represents the continent’s power sector, supports some of the six options presented by the European Commission in November 2012. Option 3 is an example: Some members sup-port an earlier and permanent cancellation of allowances in order to encourage market confidence and the return of major banks’ trading in allowances. Crucially, EURELECTRIC supports option 4 to bring more sectors into the ETS with the goal of cost-effective economy-wide carbon reductions and the com-pletion of the harmonized internal energy market. It is notable that ships, cars, agriculture, and forestry are outside the ETS. Lastly, EURELECTRIC supports a Phase 3 “back-loading” mea-sure, as a signal to the carbon market, and also to international observers, that the EU is committed to a long-term strategy of driving carbon reduction through a strong ETS.7

WHO OPPOsEs REFORMs?

Of the member states, Poland and Cyprus are opposed to reforms while Germany, Spain, and the Czech Republic are undecided. It is to be expected that any measure that increases the costs of European industries and reduces their international competitiveness will attract criticism. Especially vociferous is the chemical industry’s lobby whose representative, Peter Botschek, has claimed that “every industrialist in Europe will see that either you increase your efficiency and innovate, or you leave Europe.” Another energy-intensive sector is steel, whose lobbyist, EUROFER, opposes any measure that would increase the 2020 target and/or boost carbon and power prices. Likewise, Europe’s cement lobby, CEMBUREAU, is strongly opposed, stating: “All proposed options concentrate on the short-term carbon price, thus addressing the conse-quence and not the root cause of the problem.” Meanwhile, Carbon Market Watch, the climate lobby, recommended a full ban on offsets post-2020 and implementing use restrictions pre-2020 to increase the environmental integrity of cred-its used for compliance in the EU ETS. However, the power

EnERgy POlIcy


sector may have the greatest concern around from some of these proposals and any increase in the carbon price. Nine of Europe’s largest utilities have joined forces to oppose a bind-ing renewable energy target for 2030.8

HOW Is THE ETs AFFEcTIng THE EU POWER sEcTOR?

New Energy Finance concluded in a 2009 report that the ETS was just one of many factors taken into consideration in power sector investment decisions.9 Under the early phases of the ETS, coal-fired power plants were given more free permits than natural gas. Given this, the reality that coal is significantly less expensive than gas in the EU, and the decline in the CO2 price below €5/tonne, it is not surprising that coal power gen-eration has increased. Indeed, six coal plants with a combined capacity of 4536 MW are due to begin operating in Germany this year. Overall, Germany’s coal-fired power plants (including lignite) contributed more than 50% to the nation’s electricity the first half of this year whereas output from natural gas-fired power plants and wind turbines dropped. Gérard Mestrallet, CEO GDF Suez, noted that in recent years 30 GW of gas-fired capacity, equal to about 30 nuclear plants, had been demol-ished or mothballed in Europe. This change can be attributed to the cost competitiveness of coal and the priority of renew-ables on the grid. From 2013, utilities in Western Europe will no longer be given free permits while those in Eastern Europe will buy 30% of their allowances at auctions rising to 100% by 2020. These measures are likely to add several thousand euros to energy costs in Europe. This together with proposed ambi-tious targets for renewables are said to threaten the security of Europe’s energy supplies.

POWER sEcTOR vIEWs On REFORM PROPOsAls

Until the European economy starts to recover, reforms to raise carbon prices will have little effect on most sectors bar the power generators. Coal will continue to be burned and new coal power stations opened when the profitability of coal far exceeds the losses of gas generation. For example, in Germany coal generation is estimated to have made a profit of €8.85/MWh in September based on current coal, power, and emis-sions prices; gas-fired plants, on the other hand, are estimated to have made a loss of €18.74/MWh.10

For a power sector investor, option 6 of the Commission’s proposals to introduce a discretionary price management mechanism is the most favorable, says Henry. This view is sup-ported by John Kirby, who states: “Power companies will want the discretionary price management mechanism, with special credits during times of high energy demand…”

Coal-fired power plants are somewhat favored under the cur-rent ETS conditions; operators of gas plants are likely to favor options 1 to 3; they would benefit from higher prices as they have lower emissions than coal. Any reduction in the number of carbon allowances would make them more competitive relative to coal, says Henry. The circumstances for renew-able power plant operators are different since their marginal costs are close to zero (except for biomass plants), so they are always competitive vis-à-vis coal and gas and will therefore always operate at high capacity. Instead, the impact of the car-bon price is more dependent on the type of subsidy scheme they are supported by since, notes Henry, “Renewable genera-tors on a fixed Feed in Tariff (FiT) or a Contract for Difference (CfD) FiT will be paid a fixed amount for their energy, regard-less of the electricity price.”

WIll THEsE PROPOsAls EncOURAgE ccs TEcHnOlOgy?

The current carbon price is too low to encourage adoption of carbon capture and storage (CCS) technology and, although any reform of the market is likely to increase prices, there is still significant doubt whether the ETS could provide enough of a price signal to drive investment in CCS. Henry notes: “The unknown is, what future carbon price will be required for CCS to be adopted” and “more realistically whether a viable CCS technology for coal or gas power stations will be forthcoming in less than a decade”.11

cARBOn PRIcEs AnD ETs sysTEMs In AUsTRAlIA AnD ElsEWHERE

Australia’s previous prime minister introduced a fixed levy on carbon emissions for three years starting in July 2012 in preparation for a shift to market pricing and linking up with Europe’s ETS in 2015. Owing to the recent election and change

If Australia links to the EU ETS, will others follow?

30

of government, it seems likely that the planned link between Europe and Australia’s emission trading schemes could be dis-mantled before the proposed start date of July 2015. The new Prime Minister, Tony Abbott, has announced that he will scrap the country’s carbon tax introduced by the previous Labor-led government. However, his coalition may not have sufficient support in the Australian Senate to carry through the abolition of Australia’s carbon tax. Given the political difficulties that Prime Minister Abbott faces, Kirby suggests that “Australia might stay with a straight ‘carbon tax’ but throws doubt on whether the planned link with Europe’s ETS will go ahead”.

Europe and Australia are not the only ones attaching a price to CO2 emissions and establishing a carbon market. California, the world’s 10th-largest economy, had the world’s second- largest carbon market in 2012, which is to be linked with Canada’s province of Quebec. California has been working with the Canadian province for the last five years to align their greenhouse gas emission-limiting market initiatives. The sys-tem is designed so that other parts of the U.S. and Canada can join the new joint carbon market being formed.12 However, the prospects of this North American/Canadian scheme joining or linking with the EU’s ETS is regarded as some way off by indus-try insiders. In the Far East, Chinese policy makers are currently devising a cap-and-trade system to help reduce its greenhouse gas emissions. A draft Climate Change Law was released by the Chinese Academy of Social Sciences (CASS) in March 2012. In addition, China’s 12th Five Year Plan (2011–2015) has estab-lished pilot ETSs in seven provinces and in cities including Beijing, Shanghai, Tianjin, Shenzhen, Chongqing, Guangdong, and Hubei. Each region was charged with designing its own scheme with a planned start date of 2013 (although some may not be ready in time). These pilot schemes are designed to provide useful data and act as a testing ground for the creation of a national ETS.

As FOR THE FUTURE

The proposal to introduce a discretionary price management mechanism, the Commission’s option 6, has gained much political support in discussions at European Commission, European Parliament, and member-state levels. The govern-ments of the UK, Denmark, Finland, and the Czech Republic have requested its further consideration. From an investor’s viewpoint, providing price stability with price management is

attractive. From both the utility operators’ and policy makers’ point of view, option 6 provides the possibility of keeping suf-ficient power station generating capacity to provide backup power supplies when the sun does not shine and the wind fails to blow. Only a few months ago it may have seemed that obtaining a consensus to adopt and implement a flexible price management mechanism was an insurmountable task. However, with the recent changes in the German leadership a vote from the ministers could come as soon as mid-December with a final deal by February.

REFEREncEs

1. S. Nicola, Merkel’s Green Shift Backfires as German Pollution Jumps, Bloomberg Business Week, 29 July 2013, www.business-week.com/news/2013-07-28/merkel-s-green-shift-backfires-as-german-pollution-jumps-energy

2. S. Henry, Pöyry Management Consulting (UK) Ltd, Interview, 1 October 2013.

3. C. Case, Hot Market: Europe’s Emissions Trading System Ex-plained, Spiegel International, 9 August 2006, www.spiegel.de/international/hot-market-europe-s-emissions-trading-system-explained-a-430655.html

4. J. Stonington, Cutting Carbon: Is Europe’s Emissions Trading System Broken?, Spiegel International, 26 October 2012, www.spiegel.de/international/europe/europe-looks-to-fix-problems-with-its-carbon-emissions-trading-system-a-863609.html

5. T. Andresen, S. Nicola, EON, RWE May Have to Close Down Unprofitable Gas Power Plants, Bloomberg, 23 January 2013, www.bloomberg.com/news/2013-01-23/eon-rwe-may-have-to-close-down-unprofitable-gas-power-plants.html

6. John Kirby, SPCo\R, Interview, 1 October 2013.7. EURELECTRIC Adopts Position on ETS Structural Reforms, EUR-

ELECTRIC, 5 February 2013, www.eurelectric.org/news/2013/eurelectric-adopts-position-on-ets-structural-reforms/

8. G. Chazan, P. Clark, European Utilities Warn EU Over Energy Risks, Financial Times, 9 July 2013, www.ft.com/cms/s/0/19039dee-194f-11e3-83b9-00144feab7de.html#axzz2h9VNJ1vJ

9. Carbon Markets—EU ETS Research Note, Bloomberg New En-ergy Finance, 14 December 2009.

10. T. Overton, Germany Sounds Retreat on Gas-Fired Power, 3 Sep-tember 2013, www.powermag.com/germany-sounds-retreat-on-gas-fired-power/?pagenum=2

11. N. Newman, Australia’s Clean Coal Drive, Power Engineering International, 1 September 2011. www.powerengineeringint.com/articles/print/volume-19/issue-7/features/australias-clean-coal-drive.html

12. A. York, As Brown Visits China, California-Quebec Carbon-Trade Deal Advances, Los Angeles Times, 9 April 2013, articles.lat-imes.com/2013/apr/09/local/la-me-pc-carbon-california-que-bec-20130409

EnERgy POlIcy


By Ben YamagataExecutive Director, Coal Utilization Research Council (CURC)

In the U.S., our vast, domestically secure supply of coal has fueled the American economic machine for many decades and our fleet of existing coal-fired power plants provides

very inexpensive electricity.A This means that U.S. industry has a competitive edge over manufacturers in other countries that do not have reliable, abundant, low-cost electricity gen-erated from coal resources, and consumers are able to keep more of their income to spend on other expenses. Further, our coal-based power generation is fully dispatchable—when you need it, it is there. In addition, affordable and reliable electricity generated by coal enables the expansion of electro- technologies, which are the basis of modern society.

Other sources of electric power have their attributes, but may not be available when you need the electricity if the sun is not shining, if the wind is not blowing, or if the costs of a fuel become volatile and unaffordable compared to consistently stable, low-priced coal resources. Coal conversion to electricity, liquid fuels, or chemicals assists the U.S. and many other coun-tries to meet the ever-rising demand for energy, while clean coal technologies, including higher efficiency generation and carbon capture, utilization, and storage (CCUS), are pathways toward achieving sustainable energy, economic growth, and climate change policy goals. Similar to what has already been achieved for reducing criteria emissions (e.g., SO2, NOx, PM10) reducing CO2 emissions, and the associated control costs, will be driven by technology development, demonstration, and deployment.

THE U.s. cOAl InDUsTRy FAcEs sEvERAl cHAllEngEs

The availability of low-cost electricity is a key component to President Obama’s recently announced initiative to grow manufacturing in the U.S. As a general rule of thumb, a 10% reduction in the cost of electricity leads to a 1% increase in gross domestic product and employment.1 That equates to 1.5 million jobs. Rather than pursue public policies that result in the increased cost of coal-fueled electricity so that other higher cost sources of electricity become competitive, the focus should be on cost reductions while simultaneously achieving our country’s environmental goals. Technology development and widespread utilization of advanced technol-ogy is a proven mechanism to accomplish these dual goals of lower costs and environmental stewardship.

Today, coal’s challenges are associated primarily with the cost of

A Roadmap for the Advancement of Low-Emissions Coal Technologies

CURC and EPRI have developed a Roadmap to support CCUS development without federal financing.

“As a general rule of thumb, a 10%

reduction in the cost of electricity

leads to a 1% increase in gross

domestic product and employment.”

32

complying with an array of recent and pending Environmental Protection Agency (EPA) environmental requirements as well as competition from low-cost natural gas. Although existing coal-fired power plants are highly competitive with other sources of electricity, the added cost of recently adopted environmental regulations (new-source PSD/BACT permitting), uncertainty over future regulations (CO2 emissions standards for new and existing plants under Section 111 of the Clean Air Act), and other factors have led to projections that approximately 60–80 GW of older coal-fired units (20–25% of the current 310-GW coal fleet) will be retired over the next several years—too soon to be replaced by coal-fueled power plants with CCUS.

Technology Is key

Since the early 1970s, the Department of Energy (DOE) Coal RD&D program and DOE’s National Energy Technology Laboratory (NETL), in partnership with the private sector, have been responsible for developing innovative technologies for coal-fired power plants such as low nitrogen oxide (NOx) burn-ers, selective catalytic reduction (SCR), flue gas desulfurization (scrubbers), and fluidized bed combustion, all of which are now in the marketplace and benefiting energy production and air quality improvements.2 In fact, today, three out of every four coal-burning power plants in the U.S. are equipped with technologies that can trace their roots back to DOE’s advanced

coal technology program.

The successful development and use of technologies have allowed coal use to increase by more than 180% since the early 1970s while the emissions rates of SO2 and NOx have decreased by approximately 85%, as is shown in Figure 1.

The key to ensuring continued technology success is (1) ade-quate public support, (2) enhanced levels of funding targeted to specific technology areas, and (3) a regulatory and public policy framework that supports coal use.

The cURc–EPRI Technology Roadmap

CURC, together with the Electric Power Research Institute (EPRI), has developed a Technology Roadmap (Roadmap) that defines the research, development, and demonstration neces-sary to ensure that the benefits of coal utilization in the U.S. continue into the future. The Roadmap represents a plan for developing technologies that convert coal to electricity and other useful forms of energy as well as into manufacturing feedstocks. Our Roadmap and accompanying analysis concluded that several coal technology advancements, if developed, will achieve specific cost, performance, and environmental goals thereby benefiting the nation’s environment, economy, and energy security.

One of the most significant benefits from the proposed tech-nology improvements identified in the Roadmap is the increase in efficiency of power generation; see Figure 2 for a proposed timeline for efficiency improvements. This improvement in effi-ciency reduces all emissions, including CO2. Improvements in overall power plant efficiency for combustion-based systems as

FIGURE 2. Improvements in U.S. power plant efficiency obtainable through successful R&D

EnERgy POlIcy

FIGURE 1. Coal-fired generation emission rates have decreased dramatically due to the application of environmental technologies.Sources: EPA National Air Pollutant Emission Trends; EIA Annual Energy Review, EIA AEO 2011, Ventyx - Velocity Suite

-150%

-100%

-50%

0%

50%

100%

150%

200%

1970 1975 1980 1985 1990 1995 2000 2005 2010

+163%

-81%-88%

-96%

CoalkWh

NOₓEmissions/kWh

SOₓEmissions/kWh

PM₁₀Emissions/kWh

0

10

20

30

40

50

60

2010 2018 2025 2035

Efficiencyno CCSEfficiencyw/CCS


well as significant cost reductions in gasifiers and improved gas turbines are projected to result in a levelized cost of electricity (LCOE) for these advanced coal-fueled systems with CCS that is lower than today’s coal-fueled power plants without CCS.

Additional benefits of successfully implementing the Roadmap, which are highlighted in Figure 3, include (1) aggressive reduction of water use/discharge, (2) significant reductions in traditional air pollutants and CO2, (3) enhanced energy and economic security resulting from production of low-cost power using coal, our largest U.S. domestic energy resource while using captured CO2 to recover crude oil, and (4) deploying coal-based technologies for the production of liquid fuels and other marketable products.

Importantly, the Roadmap also strongly recommends that the DOE continue supporting the current suite of select CCUS demonstration projects and, in the future, make authorizations to encourage additional demonstrations and deployment of “second generation” and transformational coal technologies.

Continued demonstrations are singularly important. Given the prospect that the market alone will not be sufficient to undertake additional demonstrations of the technologies currently undergoing planning and construction, CURC strongly recommends that authorizations be made to encourage addi-tional demonstrations and deployment of technology at or near commercial scale.

Without this continued activity during a period when few, if any, new coal-fueled power plants are projected to be built, we would lose momentum in maturing the technologies under demonstration. Further, without the prospects of addi-tional commercialization and use, expertise and know-how will rapidly dissipate and infrastructure and even physical resources (sufficient coal resources and capacity to construct) will disappear with significant uncertainty as to whether these resources can be reconstituted.

A sTRATEgIc PATH FORWARD: THE cURc THREE-PART TEcHnOlOgy PROgRAM

What is needed to best ensure that coal continues its place in America’s clean energy future? The answer is an affordable technology-focused program that results in cost-competitive, environmentally superior, and reliable ways to use coal well into the future (2050 and beyond). The three-part technology program is designed to achieve these goals by initiating and supporting with public- and private-sector partnerships the following:

• Near term: by applying technology solutions to the exist-ing fleet of coal-fired electric generating plants to better

ensure efficiency, output, reliability, and emissions control.• Mid-term: by authorizing the construction of 10 GW of

advanced coal plants that are highly efficient and superior in ability to control emissions and that will install carbon capture systems when that technology is commercially available. A second program that provides financial incen-tives for the capture of CO2 to recover crude oil, through EOR, while directing tax receipts and royalties (not new taxes) from that recovered crude oil to pay for the CO2 capture systems.

• Long term: by focusing federal appropriations toward a RD&D program that has the goal of cost competitive, envi-ronmentally superior, and transformational uses of coal for the future.

One element of the three-part program—the Accelerated CO2 for EOR program—would encourage the capture of CO2 from coal-fueled facilities to then be used for the enhanced recovery of crude oil that remains trapped in reservoirs after primary and secondary production has been completed. Between 20 to 60 billion barrels of oil remain in numerous reservoirs in the U.S. This projection does not include the Bakken shale reser-voirs where some estimate that only 3 to 5% of oil is currently recovered and billions of barrels of oil remain.3 This program element allows for progress to be made on carbon capture, even when federal budgets for technology development are limited. The potential for CO2-EOR is huge (see Table 1 and article by Vello Kuuskra in this issue).

CO2 is the primary means by which this oil can be recov-ered. There are other sources of less costly anthropogenic

FIGURE 3. Improvements in the control of conventional pollutant and water conservation based on the RoadmapNotes: 2010 “State of the Art” Baseline Data: Reductions reflect a range of values for both PC and IGCC technology changes after 2010. Note that the reductions are already achieved through 2010, the baseline for the projected additional reductions, are very significant. CO2: 0% (no carbon controls in use), NOx and SO2: 90–99% reduction, PM: 99.6% reduction, Mercury: 90% reduction, Water withdrawal reduction (as a result of cooling towers): 98% reduction.

CO₂ SO₂ NOₓ PM Mercury WaterWithdrawalReduction

Environmental Improvements Relative To A New Unit In 2010 2010 20182025 2035

0%

20%

40%

60%

80%

100%

34

(captured) CO2 currently available, but if industry determines it is beneficial to recover the bulk of these remaining domestic oil resources, then coal-derived CO2 is required because there are not sufficient alternative sources of CO2 available to recov-er the quantities of crude oil available.4

Importantly, in these times of severe federal budget deficits, the Accelerated CO2 for EOR program is specifically designed to be self-financing. The key element of this proposed program is that oil would not have been recovered but for the use of captured CO2. Review of existing, naturally occurring sources of CO2 has established this proposition. Further, our modeling estimates that each dollar of support granted to a CCUS proj-ect (the costs to capture CO2 are currently more than the CCUS project can recover from the sale of the captured CO2) can be recovered over a 10-year timeframe or less from the “use of” tax receipts and any federal government royalties paid by a taxpayer on its income from the recovered crude oil. These

are not “new” taxes. The taxes and royalties would have been paid under existing law but the oil itself would not have been recovered but for the use of captured CO2.

Key elements of the Accelerated CO2 for EOR program are listed below:

• Direct financial support to qualifying CO2 capturers for a limited number of CO2 capture projects (the equivalent of 5–10 GW) where the captured CO2 is sold for EOR (includes coal to electricity, coal to liquids or substitute natural gas, coal to chemicals feedstocks, coal for polygeneration);

• Limit the program to a 10-year qualifying period although each qualified project, once operational, would receive assistance for a specific period of time (e.g., 15 years) after project start-up;

• Both existing (retrofit) and new, greenfield coal-fueled projects would be eligible to participate in the program;

• Qualifying projects must meet certain coal fuel input and performance requirements and capture a minimum of 46% of the CO2 emissions that would otherwise be emitted from the unit;

• The price paid for captured CO2 will be tied to the price of crude oil;

• Financial support from the government for entities partici-pating in the program would be tied to qualifying tons of CO2 captured and used for EOR;

• The subsidy rate ($/ton CO2) would be determined through a mechanism under which the future price of a barrel of oil and a resultant market price for CO2 are estimated and a per ton CO2 subsidy rate is determined;

• Recognition of federal tax receipts/royalty revenues from the crude oil program through the use of captured CO2 justifies (“pays for”) the subsidies made; no new taxes are levied, only a recognition that tax receipts would not have been collected but for the use of the captured CO2.

This program contains tremendous potential benefits to the U.S. in terms of increased tax revenues, jobs, substantial increases in domestic oil production, and likely concurrent reductions in imported oil (along with significantly reduced exported dollars to pay for such imports). In addition, encour-aging the construction of new coal-fueled facilities equipped with CCUS technology or the retrofitting of such technology on existing coal-fueled power generation provides commercial projects that will allow for the capture and storage of CO2 from the use of coal. And finally, this type of program helps to ensure the use of coal, America’s most abundant fossil fuel resource.

One final note, in addition to the technology and cost chal-lenges facing CO2 capture technology, challenges exist for CO2 storage approaches as well. There are significant unresolved “legal framework” barriers to CO2 storage in saline formations,

EnERgy POlIcy

TABLE 1. The potential for CO2-EOR is enormous in the U.S.

Basin/AreaIncremental Technically

Recoverable (Bbbl)

Incremental Economically Recoverable*

(Bbbl)Alaska 12.4 9.5

California 6.3 5.4Gulf Coast

(AL, FL, MS, LA) 7.0 2.2

Mid-Continent (OK, AR, KS, NE) 10.6 5.6

Illinois/Michi-gan 1.2 0.5

Permian (West TX, NM) 15.9 7.1

Rockies (CO, UT, WY) 3.9 1.9

Texas, East/Central 17.6 8.3

Williston (MT, ND, SD) 2.5 0.5

Louisiana Offshore 5.8 3.9

Appalachia (WC, OH, KY, PA) 1.6 0.1

Total 84.8 45.0

*Notes: Base case economics use an oil price of $70/bbl (constant, real) and a CO2 cost of $45/tonne ($2.38 Mcf) delivered at pressure to the oil field.


including exposure to significant liabilities and risks for scores of decades after closure of the power plant. The good news is that, assuming these barriers are adequately addressed, the North American continent has promising storage sites for thousands of years of CO2 emissions from electric power generation.B Again, not all power plants are located in close proximity to potential CO2 use in EOR applications and because the source of CO2 (i.e., power plant) is not in close proximity to any EOR field then storage in saline formations could be the only option. This means that these legal framework barriers must be addressed concurrent with the development of CO2 capture technologies.

cOnclUsIOns

Successful development of advanced coal technologies can best ensure that coal remains an option for the generation of electricity and other useful energy products and chemical feedstocks. Maintaining this diversity in fuel choice is a hedge against volatile fuel prices (e.g., natural gas prices) or potential scarcity of long-term supply of competing fuels, thereby better ensuring electricity generators can continue to provide reli-able, uninterruptable, and affordable electricity for American consumers. Residential, commercial, and manufacturing con-sumers of power will reap the benefits of maintaining fuel options and for coal—technology is the pathway toward pro-viding that insurance.

nOTEs

A. As of 2012, coal continued to provide 37% of the electricity generated and consumed in the U.S. The Energy Information

Administration (EIA) projects in its latest Annual Energy Outlook (2013) that coal will continue to provide approximately 40% of U.S. electricity needs through 2040 (the end of the EIA projec-tion period).5 With respect to the U.S. market for new power plants, the DOE/EIA’s most recent Annual Energy Outlook proj-ects that the overall electric power sector (including all fuels) will shrink from 1006 GW of capacity in 2013 to 986 GW in 2020.5 The EIA also projects that once 6 GW of coal units now under construction commence operation (by 2015), essentially no additional coal units will be built until after 2035, and only 1.5 GW by 2040. These projections assume current regulations and do not reflect any future regulations limiting CO2 emissions. U.S. continued reliance upon coal may be met with the existing, and aging, coal fleet.

B. The DOE/NETL atlas of geology favorable to CO2 storage has identified deep underground saline geologies which could accommodate 2–20 trillion tonnes of CO2. This range is enough to store the CO2 from the entire U.S. coal-fueled fleet operating for 1000 to 10,000 years.

REFEREncEs

1. O. Deschenes, Climate Policy and Labor Markets, Working Paper 16111, National Bureau of Economic Research, June 2010, www.nber.org/papers/w16111

2. U.S. Department of Energy, Fossil Energy Research Benefits: Return on Investment, June 2012, energy.gov/sites/prod/files/roi_factcard.pdf

3. P. Behr, Shale Oil: Oil Boom Masks Technological Limits that Could Stifle Long-term Bakken Potential, 6 June 2013, www.eenews.net/energywire/2013/06/06/stories/1059982389

4. P. DiPietro, NETL, Office of Strategic Energy Analysis and Plan-ning, 9 March 2012, PowerPoint presentation

5. U.S. Energy Information Agency, Annual Energy Outlook 2013, www.eia.gov/forecasts/aeo/


World’s largest Operating Pulverized coal cO2 capture Project: Plant Barry

The world’s largest demonstration of carbon capture on a pulverized-coal power plant is Plant Barry in Alabama—owned by Southern Company subsidiary Alabama Power.

In June 2013, approximately 150,000 tons/yr of CO2—the equivalent of emissions from 25 MW—began being captured for permanent underground storage in a deep saline geo-logic formation. The CO2 is captured using Mitsubishi Heavy Industries Ltd. technology KM-CDRTM, which employs an advanced amine solvent.

Captured CO2 from the plant is supplied to the Southeast Regional Carbon Sequestration Partnership (SECARB). They transport the CO2 by pipeline and inject it 9500 feet under-ground at a site within the Citronelle Oil Field, operated by Denbury Resource. The CO2 will be permanently stored.

Text and photo provided by Southern Company. To learn more, visit www.southerncompany.com.

36

sTRATEgIc AnAlysIs

By Vello KuuskraaPresident, Advanced Resources International, Inc.

Phil DiPietroGeneral Engineer, Strategic Energy and Planning Division,

U.S. DOE/NETL

CO2 capture and storage (CCS) will enable coal use in a carbon-constrained world, but there has been insuf-ficient progress in the CCS field to date, which begs

the question: What is the enabling technology for CCS? The answer for first movers is CO2 enhanced oil recovery (CO2-EOR). This article focuses on the mutual benefits of producing oil and storing CO2 using CO2-EOR:

• The CO2-EOR industry, constrained by limited natural sources of CO2, needs larger volumes of anthropogenic CO2 captured from electric power and industrial plants if the EOR industry is to achieve its full economic potential.

• The CCS industry (composed of a variety of power and industrial firms) requires secure, publically acceptable places to store CO2. As important, the CCS industry needs the revenues from selling CO2 to the EOR industry to make current CO2 capture projects affordable and competitive with alternative low-carbon options.

As such, purchase of captured CO2 emissions from coal-fired power plants, with use and storage of this captured CO2 in deep, structurally confined oil reservoirs, is mutually beneficial to the CO2-EOR industry and the CCS industry.

In this article four key questions are explored, which can help provide perspective on this mutually beneficial energy and environmental strategy:

1. What is the status of CO2-EOR?2. How much anthropogenic CO2 does the CO2-EOR industry

need?3. How much would the oil industry benefit from widespread

availability of CO2?4. What is the global potential for CO2-EOR and CO2 storage?

WHAT Is THE sTATUs OF cO2-EOR?

CO2-EOR has been underway in the U.S. for several decades, starting initially in the Permian Basin and now expanding to numerous other regions of the country, particularly the Gulf Coast and the Rockies. It currently provides nearly 300,000 barrels of oil per day in North America from 125 distinct

CO2 Enhanced Oil Recovery: The Enabling Technology for CO2 Capture and Storage

“Purchase of captured CO2 emissions

from coal-fired power plants

with use and storage … in deep,

structurally confined oil reservoirs is

mutually beneficial to the CO2-EOR

industry and the CCS industry.”

Selling captured CO2 to enhance oil recovery can provide much needed income for first mover CCS projects.


CO2-EOR projects (see Figures 1 and 2).1

CO2-EOR involves using deep wells to inject large volumes of CO2 at high pressure with alternating volumes of water to improve (i.e., enhance) oil recovery (see Figure 3). The process is a closed-loop system that separates and then re-injects (recy-cles) the CO2 that is produced with the oil. Although a typical primary/secondary (waterflood) oil recovery process recovers only 30–40% of the original oil in place (OOIP), adding CO2-EOR

Riley RidgeLaBarge Gas Plant

Val VerdeGas Plants

Enid Fertilizer Plant

Dakota CoalGasification Plant

AntrimGas Plant

Lost Cabin Gas Plant

McElmo Dome

Bravo Dome

Sheep Mountain

JacksonDome

Conestoga Ethanol Plant

AgriumNitrogen Plant

CenturyGas Plant

Coffeyville Fertilizer Plant

Greencore Pipeline

Denbury/GreenPipeline

13

5

17

68

6

2

1

3

2

1

3

2

2Groups of CO₂-EOR Fields

Natural CO₂ Source

Industrial CO₂ Source

CO₂ Pipeline

CO₂ Proposed Pipeline

Pipeline Connectors

125 CO₂-EOR projects provide284,000 bbl/day incrementaldue to EOR. Including allproduction, they produce over355,000 bbl/day.

New CO₂ pipelines - - the 325mile Green Pipeline and the232 mile Greencore Pipeline - -are expanding CO₂-EOR to newoil fields and basins.

The single largest constraint toincreased use of CO₂-EOR is thelack of available, affordable CO₂supplies.

FIGURE 1. North American CO2-EOR operations and CO2 sourcesSource: Advanced Resources International, Inc., based on Oil & Gas Journal, 2012 and other sources.

can increase this by another 10–30% of OOIP. (Current CO2-EOR technology would add 10–15% of OOIP; next-generation CO2-EOR technology would add 20–30% of OOIP.)

Breaking the cO2 supply constraint

The number one barrier to achieving increased levels of CO2-EOR production is the lack of access to sufficient sup-plies of affordable CO2. However, this barrier is steadily being addressed in North America. New CO2 pipelines and gas

FIGURE 2. Annual U.S. CO2-EOR production1

Source: Includes Advanced Resources Int’l. adjustments to Oil & Gas Journal EOR Survey, 2012.

0

50,000

100,000

150,000

200,000

250,000

300,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Year

Enha

nced

Oil

Reco

very

(bar

rels/

day) Gulf Coast/Other

Mid-Continent

Rocky Mountains

Permian Basin

FIGURE 3. CO2-EOR can be a highly efficient residual oil recovery process.

InjectedCO2 from

Production Well

CO2 Stored in PoreSpace

CO2 Dissolved (Sequestered)

in the Immobile Oil and Gas Phases

DriverWater Water Miscible

ZoneOil

BankAdditional

OilRecovery

CO2 CO2

Purchased CO2

Anthropogenic and/orNatural Sources

Recycled CO2

Immobile Oil

Zone of Efficient Sweep

Immobile Oil

© Advanced Resources International, Inc.

© Advanced Resources International, Inc.

38

processing plants, such as Denbury’s 320-mile Green CO2 Pipeline along the Gulf Coast, ExxonMobil’s expansion of the Shute Creek gas processing plant, and the 226-mile Greencore CO2 Pipeline linked to the Lost Cabin gas processing plant in the Rockies, have recently been installed (see Figure 1). These new facilities are expanding the availability of CO2 sup-plies and will support increased levels of oil production from CO2-EOR in the coming years. In addition, CO2 capture from a newly constructed hydrogen plant in Louisiana is providing 50 million cfd (cubic feet per day) of anthropogenic CO2 for EOR and subsequent storage in oil reservoirs along the Gulf Coast.

Capture of CO2 from a series of integrated gasification com-bined cycle (IGCC) and other hydrocarbon conversion projects is also being planned and would add significant volumes of CO2 for CO2-EOR. Two example projects, from a much larger group, are shown in Figure 4.2

Even with these new sources of CO2, the demand for CO2 still exceeds supply. Analysis conducted by Advanced Resources International (ARI) for the U.S. Department of Energy (DOE) National Energy Technology Laboratory (NETL) indicates that several regions in the U.S. have oil-bearing formations prospective for CO2-EOR but have insufficient CO2 supply and transport infrastructure. The Permian Basin, the Rocky Mountain region, and the Mississippi Gulf Coast have all bene-fited from large, low-cost natural sources of CO2 to jump-start EOR. Other U.S. regions must turn to anthropogenic sources of CO2 to support CO2-EOR. Alaska has oil reservoirs particularly

suited for CO2-EOR, but no CO2 supply. An integrated, world-scale (large) energy complex would be required. The offshore Gulf of Mexico, especially the deep offshore, also has large oil-bearing reservoirs that are prospective for CO2-EOR. Pipelines to transport CO2 from the Gulf Coast to the offshore and plat-form plus sub-sea gas processing assets are needed.

cO2-EOR Projects around the World

Outside of North America, only a few CO2-EOR projects are underway in Brazil, Turkey, and Trinidad. In Brazil, CO2 injec-tion for CO2-EOR has been carried out by Petrobras since 1987 in the Recôncavo Basin (Bahia) oil fields and a pilot CO2 flood is underway in the giant Lula field offshore Brazil. In Trinidad, four CO2-EOR pilot floods were implemented by Petrotrin at its Forest Reserve and Oropouche fields from 1973 to 1990. In Turkey, a CO2-EOR project was initiated in the Bati Raman field. A handful of CO2-EOR pilots have reportedly also been imple-mented in China, although, in most cases, the injection stream was flue gas with relatively low concentrations of CO2, and the primary purpose of the project was not necessarily CO2-EOR.3

HOW MUcH AnTHROPOgEnIc cO2 DOEs THE cO2-EOR InDUsTRy nEED?

ARI maintains a comprehensive database of large oil fields in the U.S., including oil fields in Alaska and the offshore Gulf of Mexico. This database contains reservoir characteristics and

FIGURE 4. Southern Company’s Kemper County IGCC plant (left) will provide 1.1 to 1.5 million tonnes/yr CO2 to Denbury Resources for CO2-EOR in Louisiana and Mississippi. Summit Energy’s Texas Clean Energy IGCC project (right) plans to sell 3 million tonnes/yr CO2 for CO2-EOR in West Texas.Source: (left) Mississippi Power, Denbury Resources; (right) Siemens Energy

A. Southern Company’s Kemper County IGCC Plant• 582 MW IGCC fueled by Mississippi lignite• Capture 65% of CO2

• Negotiating to sell 1.1 to 1.5 million tonnes of CO2 per year for EOR

• Cost $2.4 B; operational by 2014

B. Summit’s Texas Clean Energy IGCC Project• 400 MW IGCC with 90% capture• Located near Odessa in Permian Basin• Sell three million tonnes of CO2 per year to EOR market• Expected cost $1.75 B; $350 MM award under

CCPI Round 3

sTRATEgIc AnAlysIs


oil production data on 2400 oil fields, which cumulatively hold over 650 billion barrels of OOIP. ARI also maintains an exten-sive database on all of the major CO2-EOR projects conducted to date and uses this second large database to calibrate and track the actual performance of this important oil recovery and CO2 storage technology.

To address the question “How much anthropogenic CO2 does the CO2-EOR industry need?”, ARI, with support from the U.S. DOE/NETL, conducted field-by-field, reservoir-by-reservoir analyses of several thousand U.S. oil fields using a “streamline” reservoir simulator (CO2 PROPHET) and an industry standard CO2-EOR cost and economic model.

The work by ARI and NETL clearly shows that the economi-cally viable CO2 demand, beyond what can be provided from existing natural (geologic) sources, is substantial and depends greatly on the sophistication and performance of CO2-EOR technology.

With currently available CO2-EOR technology, today’s oil prices of $90/bbl, and a CO2 cost of $40/t (tonne) delivered to the oil field, the CO2-EOR industry has a demand for 8.2 Gt (giga-tonnes) of CO2; this important, but rather modest, volume of CO2 could be met using 35 years of CO2 capture from the equivalent of 41 GW of coal-fired power plants (see Table 1).

With next-generation CO2-EOR technology (and the same oil price and CO2 costs as used in Table 1), the CO2-EOR industry would have a demand for CO2 that is more than two times higher (i.e., 20.8 Gt). This significant volume of CO2 demand would require 35 years of CO2 capture from the equivalent of 105 GW of coal-fired power plants, as is shown in the right column in Table 1. These CO2 demand volumes would be sig-nificantly higher if we had more rigorous estimates for residual oil zone resources.

Importantly, next-generation technology enables the CO2-EOR process to become more efficient, with a significantly lower

ratio of injected CO2 to oil produced. This would enable the CO2-EOR industry to pay more than the $40/t of CO2 used in the above analyses.

HOW MUcH WOUlD THE OIl InDUsTRy BEnEFIT FROM WIDEsPREAD AvAIlABIlITy OF cO2?

With current CO2-EOR technology, the EOR industry would obtain a significant volume of additional, economically viable oil—nearly 25 billion barrels. However, next-generation CO2-EOR technology would provide considerably more—over 85 billion barrels. This would be achieved by: (1) significantly increasing oil recovery from existing oil fields, (2) enabling the injected CO2 to be used more efficiently, thus allowing more oil fields to become economically viable, and (3) extending the CO2-EOR process to the offshore Gulf of Mexico.

Table 2 provides a summary of the economically viable oil vol-umes and total CO2 demand (including natural sources and gas processing plants) by the EOR industry under both current CO2-EOR technology and next-generation CO2-EOR technolo-gy. The information in Table 2 is derived from work performed by ARI for the U.S. DOE/NETL,4 adjusted for recent updates.

next-generation cO2-EOR

Given the large, mutually beneficial impacts that would accrue to both the CCS and the EOR industries, it seems appropriate to address the question: What is next-generation CO2-EOR? Simply put, next-generation CO2-EOR technology represents science-based, evolutionary advances in key aspects of EOR performance that industry has been pursuing for some time, as illustrated by the following discussion on one of the next-generation technologies, namely advanced CO2 conformance. The other key next-generation technologies are discussed in Reference 4.

Notes: GOM is the Gulf of Mexico.Assumptions: $90/bbl oil price, $40/t CO2 price onshore, and $50/t CO2 price onshore. *Total CO2 demand from EOR, less 2.7 Gt of CO2 from natural sources and gas processing plants. **Coal-fired power plants with 6 million tonnes/yr of CO2 emissions, 90% capture, and 35 years of operation per 1 GW of capacity.

Resource Area A. Current CO2-EOR Technology B. Next-Generation CO2-EOR Technology

CO2 Demand*(Gt CO2)

Number of 1-GW Power Plants**

CO2 Demand*(Gt CO2)

Number of 1-GW Power Plants**

L-48 Onshore* 4.8 24 12.5 63Offshore GOM 0.3 1 3.9 20

Alaska 3.1 16 4.4 22

Total 8.2 41 20.8 105

TABLE 1. Economic demand for power and industrial plant CO2: current and next-generation CO2-EOR technology

40

Conformance Technology

A significant number of domestic oil reservoirs are highly heterogeneous (i.e., highly variable). Achieving improved CO2 conformance in these heterogeneous oil reservoirs is a major technology challenge. For example, the Wasson oil field (Denver Unit) of the Permian Basin was thought to have a series of high-permeability channels. Early in the life of the CO2 flood in this oil field, Shell installed a subsurface conformance monitoring test, using coring, logging, and fluid sampling, to quantify this problem (see Figure 5).5 Installation of reservoir surveillance showed high CO2 channeling through

a small portion of the Wasson reservoir’s pore space (see Figure 6) and provided guidance to Shell on how to address this problem.

WHAT Is THE POTEnTIAl FOR InTERnATIOnAl cO2-EOR AnD cO2 sTORAgE?

So far, large-scale CO2-EOR has been primarily a North American undertaking. Yet major opportunities and favorable oil fields exist in many parts of the world, including China, the Middle East, and Europe. In 2011, ARI prepared an assessment of worldwide CO2 storage and oil recovery potential offered by CO2-EOR for the International Energy Agency Greenhouse Gas R&D Programme (IEAGHG). The CO2 supplies for EOR were assumed to be primarily from power plants, cement plants,

FIGURE 5. Wasson (Denver Unit) conformance pilotSource: Goodyear and Jensen5

FIGURE 6. Wasson (Denver Unit) conformance pilot observation resultsSource: Modified by Advanced Resources, based on data from Wasson Denver Unit CO2 flood observation pilot (Goodyear and Jensen5).

TABLE 2. Economic oil recovery from CO2-EOR

Notes: Assumptions: $90/B oil price, $40/t CO2 price for onshore, and $50/t CO2 price for onshore. *Excludes 1.7 billion barrels of oil already produced or placed into reserves with CO2-EOR.

InjectorLoggerSamplerCore Hole

100 ft radius

0% 100%

35 Not Contacted

20

20

25

% Injected CO₂% PoreSpace PV Throughput

(1 HCPV of CO₂)

0

0.49%

0.816%

3.075%

Resource AreaEconomic Oil Recovery*

A. Current Technology(Bbbl)*

B. Next-Generation(Bbbl)*

Lower-48 Onshore 19.0 59.6

Miscible Oil Fields 16.8 56.0

Near-Miscible Oil Fields 2.2 3.6

Offshore GOM Oil Fields 0.8 14.9

Shallow Water Oil Fields 0.4 3.3

Deep Water Oil Fields 0.1 2.1

Undiscovered Oil Fields 0.3 9.5

Alaska 5.1 10.9

Total 24.9 85.4

sTRATEgIc AnAlysIs


refineries, and CTL/GTL facilities with large-scale CO2 pipelines transporting the CO2 to geologically favorable oil fields. The study assessed 54 large world oil basins for CO2-based enhanced oil recovery, using two complementary methodologies.6

Initial Estimates of the “size of the Prize”

The study established that the size of the international oil and CO2 utilization (and storage) prize from applying CO2-EOR to already discovered oil fields is about 1300 billion barrels of incremental oil recovery and 370 billion tonnes of CO2 (see Table 3). This is equivalent to utilization (and storage) of captured CO2 from about 1850 GW of coal-fired power for 35 years. Much of this demand can be met by large, existing anthropogenic CO2 sources within distances of 800 kilome-ters (500 miles) of these oil basins. The international CO2-EOR and CO2 storage assessment was conducted assuming the use of current CO2-EOR technology and a preliminary world oil resource database. Application of next-generation CO2-EOR technologies to a more up-to-date world oil resource data-base would, most likely, show the international CO2-EOR and CO2 storage potential to be considerably larger.

Implementing cO2-EOR and storage globally

An important first step in launching an international CO2-EOR project is to establish “anchor” sources for CO2 supplies. For example, the Abu Dhabi National Oil Company is in discussions to use 800,000 t/yr of CO2 captured from a steel plant in the UAE for CO2-EOR. In addition, the by-product CO2 stream from a coal-to-liquids (CTL) plant would be a most attractive source of CO2 for enhanced oil recovery. New anthropogenic sourc-es of CO2, such as CO2 captured from large oil refineries and hydrogen plants under construction in the Middle East and from the high CO2 content natural gas fields in the Far East, would also provide additional opportunities for integration of CO2-EOR and CO2 storage.

In our view, the opportunities for international integrated CO2-EOR and CO2 storage projects are bright. However, given the complex multidimensional natural of the projects, a mul-tidisciplinary team with past experiences in CO2 capture, CO2 transportation, and, most importantly, on the reservoir aspects of CO2-EOR, will be essential for success.

REFEREncEs

1. V.A. Kuuskraa, QC Updates Carbon Dioxide Projects in OGJ’s Enhanced Oil Recovery Survey, Oil & Gas Journal, 2 July 2012, 72–76.

2. Various industry presentations and publications.3. R.T. Dahowski, X. Li, C.L. Davidson, N. Wei, J.J. Dooley, R.H. Gen-

tile, A Preliminary Cost Curve Assessment of Carbon Dioxide Capture and Storage Potential in China, Energy Procedia, 2009, 1, 2849–2856.

4. Advanced Resources International (prepared for the U.S. DOE/NETL, Office of Strategic Energy Analysis and Planning), Dis-ag-gregated Next Generation CO2 EOR, September 2013.

5. S.G. Goodyear, P.M. Jensen, Past Experiences and Future Chal-lenges for CO2 Injection, First Regional Symposium on Carbon Management, Dammam, Saudi Arabia, 22–24 May 2006.

6. Advanced Resources International, Inc., CO2 Storage in Deplet-ed Oilfields: Global Application Criteria for Carbon Dioxide En-hanced Oil Recovery, IEA GHG Programme Technical Report No. 2009-12, December 2012.

The authors can be reached at [email protected] and [email protected]

Region CO2-EOR Oil Recovery (Bbbl)

CO2 Storage Capacity (Gt CO2)

Asia Pacific 47 13

C. & S. America 93 27

Europe 41 12

FSU 232 66

M. East/N. Africa 595 170

NA/Other 38 11

NA/U.S. 177 51

Africa/Antarctica 74 21

TOTAL 1297 370

Notes: The former Soviet Union is listed under FSU above.

TABLE 3. Technical oil recovery and CO2 storage potential using current CO2-EOR technology at global oil basins

42

By Ren XiangkunClean Coal Experts Convenor,

China Ministry of Science and TechnologyDean, Low-Carbon Research Institute of China University of Mining & Technology

President, Baoju Energy Science & Technology Co., Ltd

Zhang DongjieEngineer, GD Power Development Co., Ltd

Zhang JunEngineer, Shenhua Science and Technology Research Institute Co., Ltd

China is one of the largest energy-producing and -con-suming countries in the world. Coal has historically been the country’s dominant source of primary energy, which

has resulted in high CO2 emissions. Finding a way to effec-tively reduce CO2 emissions while meeting the ever increasing energy demand is a pressing issue that must be tackled by the Chinese government. Due to the unique potential to dramatically reduce CO2 emissions from large, centralized fossil energy consumption sources, carbon capture, utilization, and storage (CCUS) technology is attracting global attention.

The authors of this article have been have been closely

monitoring CCUS development in China since its inception, and also have been actively participating in CCUS-related R&D, commercialization, and policy-making efforts. In the hopes of expanding the knowledge base around China’s efforts in climate change mitigation and CCUS development, this article introduces China’s policies and technical efforts, including R&D and industrial-scale demonstrations, to address this global challenge. We believe that China is now playing a leading role in the collective campaign to develop CCUS and will contribute significantly to climate change mitigation. We suggest that the world should pay close attention to China’s CCUS progress and boost cooperation with China to increase the rate of develop-ment and adoption of this technology globally.

China’s Policies for Addressing Climate Change and Efforts to Develop CCUS Technology

International collaborative efforts, such as technology transfer (for example, the meeting shown above between Chinese and Japanese researchers) and jointly sponsored projects, are critical to accelerating the development and deployment of CCUS.

“Finding a way to effectively reduce

CO2 emissions while meeting the

ever increasing energy demand is a

pressing issue that must be tackled

by the Chinese government.”

sTRATEgIc AnAlysIs


cHInA’s EnERgy REsOURcEs

coal’s Role in Providing Primary Energy

China’s economy has been growing quickly in recent years; a significant portion of that growth can be attributed to large-scale infrastructure construction, which has been accom-panied by rapid growth in energy consumption. In 2012, the total amount of primary energy consumption in China reached 2.74 Btoe (billion tonnes of oil equivalent).1 Given its exten-sive coal reserves, coal accounts for 68.49% of China’s primary energy consumption,2 as is shown in Figure 1. Coal provides 75% of China’s industrial fuel, 76% of the fuel for power gen-eration, 80% of household fuel, and 60% of raw materials for the chemical production industry. Therefore, from the per-spective of energy security, China must continue to rely on its domestic coal resources to meet energy demand in the mid- and long-term future. Without an unforeseen change in resource estimates and a significant reduction in cost for other energy options, coal’s dominant role in China’s energy mix will not change.

Environmental Pressure

Large-scale utilization of coal has made China one of the larg-est CO2 emitters in the world.4 The power industry, which is responsible for more than half of China’s total consumption, which is shown in Figure 2, contributes about 40% of CO2 emis-sions. China and other major emitters are facing increased international pressure to reduce CO2 emissions or, at the very least, cut the rate of growth. The power industry, as the big-gest emitter with centralized emissions, will inevitably bear the brunt of policies to address these concerns.

CCUS is a technology suitable for CO2 reduction from large

point sources and therefore has attracted significant attention from the Chinese government, industry, and research institu-tions. China has focused on CO2 utilization, rather than only storage, based on the current reality that pure CCS projects are expensive and difficult to move forward at the industrial scale.

cHInA’s clIMATE cHAngE MITIgATIOn EFFORTs

The Chinese government has demonstrated its dedication to addressing climate change by developing a comprehensive scheme for climate change mitigation efforts that takes into account China’s current stage of development. At the 2009 UN Climate Change Summit, President Hu Jintao vowed that China would make progress in two key areas: 1) improve ener-gy conservation and increase energy efficiency and 2) develop renewable energy and nuclear energy to reduce the proportion of fossil fuels in China’s energy mix.5 In accordance with these promises, in November of the same year the State Council of China declared that CO2 intensity per unit GDP would be reduced by 40–45% compared to 2005 by the end of 2020.6

Relevant Policies

China was one of the first countries to propose measures to mitigate climate change, and has continued to follow up with corresponding policies on those measures, as is outlined by timeline in Figure 3.7–14

science and Technology

Although CCUS has progressed to the industrial scale, reduc-ing costs and long-term competiveness will require continued investment in smaller-scale R&D. Such work is being carried out globally, but China’s central government has been partic-ularly supportive of such research projects. Many important FIGURE 1. China’s 2012 primary energy consumption3

FIGURE 2. Coal consumption by sector

Renewables

Nuclear Energy

Hydroelectric

Natural Gas

Oil

Coal

1.17%0.81%7.12%

4.73%

17.68%

68.49%

Other

Chemicals production

Industrial burnerand furnace

Power

50%

5%

20%

25%

44

CCUS-related R&D collaboration programs have been car-ried out among universities, research institutes, and energy corporations. Figure 4 shows the number of nationally sup-ported programs for CCUS-related technologies, which are categorized by type, as well as their sponsoring sources. Most programs are sponsored by MOST (Ministry of Science & Technology of China), which is now leading national support for CCUS development and covers a wide range of CCUS-related technologies.

In addition to the government-supported domestic projects, China is also actively participating in several CCUS-related inter-national collaborations (see Table 1). This provides experts in China the opportunity to learn about the latest international achievements in CCUS technologies, which can help increase

the rate of development and deployment of domestic CCUS projects. This collaboration is also useful to share China’s prog-ress on climate change mitigation internationally.

With the support from these government-dominated or inter-national-collaboration R&D programs, China has made great progress related to CCUS. However, to move CCUS forward, industrial-scale demonstrations are critically important.

ccUs DEMOnsTRATIOn PROJEcTs THROUgHOUT cHInA

In the last five years China’s largest energy companies have carried out a dozen CCUS demonstration projects, some

sTRATEgIc AnAlysIs

Other CCUS-relatedR&D (MOLR)

CCUS-combinedtechnologies (MOST)

CO₂ biofuel (MOST)

CO₂-ECBM (MOST)

CO₂-EOR (MOST)

CO₂ capture fromother sources (MOST)

CO₂ capture fromchemical plants (MOST)

Oxy-fuel comb. CO₂ capturefrom power plant (MOST)

Pre-comb. CO₂ frompower plant (NEA)

Post-comb. CO₂ capturefrom power plant (MOST)

0

1

2

3

4

5

Num

ber o

f Pro

ject

s

FIGURE 4. Major government-supported CCUS-related programsNotes: NEA is National Energy Administration of China; MOLR is Ministry of Land & Resources of China; EOR is enhanced oil recovery; ECBM is enhanced coal-bed methane recovery

FIGURE 3. Timeline of select CCUS-related policies in ChinaNote: S&T is science and technology

Agenda 21 promulgated

by China’s State Council to meet

1992 UNAgenda 21⁷

China, U.S., E.U., Australia, and Canada

established the Carbon Storage

Leadership Forum to collaborate on CCUS⁸

National Assessment Report on Climate

Change published¹⁰

Whitepaper: China’s Policies and Actions on Climate Change

(revised and published annually)¹²

National Mid- andLong-Term Planning forKey S&T Infrastructure

Construction (2012−2030) promulgated by StateCouncil. Designed to

improve confidence inCCUS investment¹⁴

Outline of the Nat. Prog. for Mid- and Long-Term

S&T Dev. to develop near- zero-emission fossil

energy systems from 2006 to 2020⁹

National Plan for Coping with

Climate Change quantifies emission

objectives¹¹

Research on CCS Technology Roadmap

sets 2020 objectives for R&D, demonstrations,

industrial dev., and policies¹³

1994 2003 2006 2007 2008 2011 2013


TABLE 1. Recent international collaborative projects related to CCUS

Project Name Sources of Financial Support Execution Period Major Participants

The China-Australia Geological Storage

of CO2 (CAGS) Project

MOST and Department of Resources, Energy and Tourism

of Australia2009–2011

China: The Administrative Centre for China’s Agenda 21, China Geological Survey, Tsinghua University, etc.Australia: GeoScience Australia

Joint Research on Lower Emission IGCC Technology between

China and U.S

MOST, U.S. Department of Energy 2010–2012

China: Chinese Academy of Sciences (CAS)U.S.: National Energy Technology Laboratory, Pacific Northwest National Laboratory

Sino-Italian CCS Technology

Cooperation Project

Cooperation Action within CCS China-EU, (COACH), Italian Ministry for the

Environment, Land and Sea

2010–2012

China: The Administrative Centre for China’s Agenda 21, Huaneng, Tsinghua University, Chinese Academy of Sciences, etc.Italy: Ministry for the Environment, Land and Sea, Enel, etc.

(COACH) MOST and EU 2006–2009

China: The Administrative Centre for China’s Agenda 21, Huaneng, Tsinghua University, Zhejiang University, Chinese Academy of Sciences, etc.EU: Imperial College, Air Products, Alstom, Shell,British Geology Survey, SINTEF, etc.

UK-China Near-Zero Emissions

Coal project (NZEC)

MOST, Department of Environment, Food and Rural Affairs of UK

2007–2009 (Phase I)

2010–2012 (Phase II)

China: Administrative Centre for China’s Agenda 21, Xi’an Thermal Power Research Institute, Tsinghua University, Zhejiang University, CAS, SINOPEC Shengli Oilfield, etc.UK: Alstom, British Geological Survey, BP, Shell, Sch-lumberger, Doosan Babcock, Cambridge University, etc.

U.S.-China Clean Energy

Research Center

MOST and U.S. Department of Energy 2010–2015

China: Huazhong University of S&T, S&T and Indus-trialization Center of Ministry of Housing and Urban-Rural Development, Tsinghua University, etc.U.S.: West Virginia University, Lawrence Berkeley National Laboratory, University of Michigan, etc.

comprehensive (i.e., capture and utilization and/or storage) and some partial (i.e., capture or utilization and/or stor-age). These projects were carried out either independently or through collaboration (often with government support). Implementation of such demonstration projects is necessary to verify the technical and economic viability of CCUS; in addi-tion, these demonstrations are laying a technical foundation for future large-scale implementation of CCUS in China.

Major CCUS industrial-scale demonstration projects being car-ried out in China in recent years are listed in Tables 2–4. The projects in Table 2 are pure CO2 capture projects; projects in Table 3 are pure CO2 storage or utilization projects; and proj-ects in Table 4 are integrated projects that include CO2 capture and storage and/or utilization. These projects are geographi-cally distributed throughout much of China.

There is a tremendous amount of CCUS activity occurring in

China; therefore, only select demonstration projects with global significance, such as first-of-a-kind or industrial-scale projects, are discussed in greater detail in subsequent sections.

select cO2 capture Demonstrations

Huaneng Shidongkou CO2 Capture Project: Based on the successful experience with the Gaobeidian demonstration project, Huaneng Group established a larger flue gas CO2 capture demonstration at Shanghai Shidongkou No. 2 Power Plant. The project adopted the same technology and process as the Gaobeidian project, but at a much larger scale; the new project scale was 100,000–120,000 tonnes CO2/yr. This was the largest post-combustion CO2 capture demonstration in the world at the time operation began. The captured CO2 is sold to chemical plants nearby as raw material. Constrained by a lim-ited market, the CO2 is sold at a price only offsetting the cost.

46

HUST CO2 Capture Project: Huazhong University of S&T (HUST) established China’s first, and the world’s third, 3-MWth oxy-fuel combustion pilot plant in Wuhan. This pilot is capable of capturing more than 7000 tonnes CO2/yr. Based on that proj-ect, HUST is collaborating with power-sector companies to establish the world’s largest (35 MWth) oxy-fuel combustion demonstration in Yingcheng, Hubei. The demonstration plant will be able to capture more than 100,000 tonnes CO2/year. This progress clearly demonstrates that China has become a global leader in the development of oxy-fuel combustion technology.

select cO2 storage/Utilization Demonstration

Jilin Oilfield Project: Since 1997, PetroChina has been execut-ing an industrial-scale CO2-EOR demonstration at Jilin Oilfield. Presently 150,000 tonnes of CO2 separated from a nearby nat-ural gas field are injected into an oil reservoir each year; as a result, oil field productivity has increased by 80%. PetroChina plans to increase the CO2 injection rate from the current level to 300,000–1,000,000 tonnes CO2/yr. Although CO2-EOR is a mature technology in the U.S., the geology of China’s oilfields

is quite different, so this demonstration is critically important to understand and implement large-scale CO2-EOR with stor-age under China’s complicated geological conditions.

select Integrated ccUs Demonstration

Integrated CCUS Project by GreenGen, Huaneng: In 2009, Huaneng began cooperation with Peabody Energy (U.S.) to establish China’s first 265-MW IGCC demonstration project in Tianjin, which was placed into service on 12 December 2012. Huaneng also plans to implement a Selexol physical absorption-based CO2 capture retrofit for part of the fuel gas at this plant by 2015. This project, which will capture 60,000–100,000 tonnes of CO2/yr, will be the first pre-combustion CO2 capture demonstra-tion on an IGCC plant in China and also the world. If successful, Huaneng will conduct a full-scale pre-combustion CO2 capture retrofit, resulting in a near-zero pollutants/near-zero CO2 coal-based power plant. Huaneng plans to store the captured CO2 in depleted oil/gas fields or saline aquifers nearby; the region around Dagang Oilfield has been preliminarily selected.

TABLE 2. Pure CO2 capture demonstration projects in China

No. Project Name Type SiteScale

(tonnes CO2 /yr)

Year Begun

1 Huaneng Gaobeidian CO2 Capture Project

Post-combustion capture (PCC) from power plant flue gas Chaoyang, Beijing 3000 2008

2 Huaneng Shidongkou CO2 Capture Project PCC from power plant flue gas Baoshan, Shanghai 100,000 2010

3 China Power Investment Co. Shuanghuai CO2 Capture Project PCC from power plant flue gas Hechuan, Chungking 10,000 2010

4 CO2 Capture Project by Institute of Advanced Energy & Power, CAS

Pre-combustion capture from IGCC fuel gas Lianyungang, Jiangsu ~10,000 2013

5 HUST CO2 Capture Project CO2 capture from oxy-fuel combustion Yingcheng, Hubei 100,000 2013

TABLE 3. Pure CO2 storage/utilization demonstration projects in China

No. Project Name Type Site Rate (tonnes CO2/yr) Year Begun

6 Jilin Oilfield Project CO2-EOR/storage Songyuan, Jilin 300,000–1,000,000* 1997

7 CUCBM Project CO2-ECBM/storage Jincheng, Shanxi ~1900** 2005

8 ENN Project CO2 utilized for microalgae cultivation Dalate, Inner Mongolia 20,000 2010

*Plans are to soon increase injection to this rate; to date, the capture demonstration facility capacity of 150,000 tonnes of CO2/yr has been completed.**This project is a short-term pilot CO2-ECBM project co-established by China and Canada, with CO2 injection operation lasting for only 13 days. Approximately 1900 tonnes of CO2 was injected into the coal bed. Although this was a relatively small in total injection amount, this was the first trial of CO2-ECBM production in China; therefore it is included in this article.

sTRATEgIc AnAlysIs


cOnclUsIOns

Today China has moved to the forefront of the global CCUS development and industrial demonstration effort. China now boasts the largest number of CCUS industrial demonstration projects in the world, several which are rapidly developing. These projects are a tangible contribution made by China to the field of climate change mitigation. Therefore, the authors suggest that the world should keep an eye on CCUS progress in China. It is worthwhile for international organizations to consider providing technical or financial aid or to enhance bilateral or multilateral collaboration with China, in the hopes of further advancing and encouraging adoption of CCUS tech-nology. Thus, the efforts of China can be leveraged to play an even larger role to help reduce the increase in global CO2 emissions.

REFEREncEs

1. Government of China, 863 Program: The State Plan for High-Tech Research and Development of China.

2. BP, Statistical Review of World Energy 2013, 2013, BP Company, London.

3. Sun Qiming, Wang MingPeng, Problems and Countermeasures for Exploitment and Utilization of Coal Resources in Western China, Science & Technology and Industry, 2010, 10, 79–82.

4. IEA, CO2 Emissions from Fuel Combustion, 2011, International Energy Agency, Paris.

5. Hu Jintao, Join Hands to Address Climate Challenge, politics.peo-

ple.com.cn/GB/1024/10098974.html, (accessed January 2013).6. Cao Hua, The State Council of China: CO2 Emissions per GDP

Will Be Reduced by 40%–45% by 2020, finance.people.com.cn/GB/10461522.html, (accessed January 2013).

7. Chinese Government, China Agenda 21: Whitepaper of China’s Population, Environment and Development in 21st Century, 1994, The State Council of China, Beijing.

8. CSLF, About CSLF, www.cslforum.org/contactus/index.html, (ac-cessed 1 March 2013).

9. The State Council of China, Outline of the National Program for Long- and Medium-Term Scientific and Technological Develop-ment, www.gov.cn/jrzg/2006-02/09/content_183787.htm, (ac-cessed January 2013).

10. J. Zhenrong, China Promulgated National Assessment Re-port on Climate Change for the First Time, www.gmw.cn/01gmrb/2006-12/27/content_527791.htm, (accessed Janu-ary 2013).

11. National Assessment Report on Climate Change, National Devel-opment and Reform Committee, 2007: Beijing.

12. Whitepaper: China’s Policies and Actions on Climate Change, The State Council of China, 2008: Beijing.

13. Social Development and S&T Bureau under Ministry of Science & Technology of China, The Administrative Centre for China’s Agenda 21 under Ministry of Science & Technology of China, Research on Carbon Dioxide Capture and Storage Technology Roadmap of China, 2011: Beijing.

14. Notification of Publishing the National Mid- and Long-term Out-line for Key S&T Infrastructure Construction (2012–2030), 2013, The State Council of China, Beijing.

The authors can be reached at [email protected], [email protected], and [email protected]

TABLE 4. Integrated CCUS demonstration projects in China

No. Project Name Type Site Scale (tonnes CO2/yr) Year Begun

9 Integrated CCUS Project by Shengli Oilfield Power Plant

PCC from power plant flue gas + CO2-EOR with storage Dongying, Shandong 30,000 2010

10 Integrated CCUS Project by GreenGen, Huaneng

Pre-combustion capture from coal-based fuel gas of IGCC plant +

CO2-EOR/storage

Binhai, Tianjin 60,000–100,000 2012

11 Integrated CCUS Project by Shenhua Coal-to-Liquid Co., Ltd.

Capture from gasification unit of a coal-to-chemicals plant + saline aquifer storage

Ordos, Inner Mongolia 100,000 2011

48

By Ligang Zheng Research Scientist, Natural Resources Canada

Yewen TanResearch Scientist, Natural Resources Canada

The urgency of developing, demonstrating, and deploying CCS technologies is supported by the recently released Intergovernmental Panel on Climate Change report,

“Climate Change 2013: The Physical Science Basis”.1 Coal is the dominant fuel for electricity production and is responsible for generating about 40% of electricity in the world. Also, out of the cumulative CO2 emissions from fuel combustion, coal was responsible for 43%. Unlike CO2 emissions in the transporta-tion sector, due to its large quantity and concentrated nature, coal for electricity generation is at the center of the global effort to fight climate change.

An example of regulations to curb CO2 emissions is one made by the U.S. Environmental Protection Agency. The rules propose that the limit for carbon emissions from new coal-fired power plants would be 499 kg CO2/MWh on average over a 12-month period. Upon the release of the proposed CO2 emissions rules for new coal-fired power plants, the U.S. EPA further indicated that proposed regulations for existing coal-fired power plants are to be released in June 2014.

As shown in Table 1, even for the best coal-based generation technology, the ultra-supercritical steam cycle, a reduction of more than 30% of the emitted CO2 must be achieved to meet the proposed rules. Other countries also have either already enacted similar regulations or are in the process of discussions. For example, almost exactly one year ago, Canada announced that new and end-of-life coal-fired power plants will have to meet a performance standard of CO2 emission rate at 420 kg/MWh by 1 July 2015.

Table 2 shows the average CO2 emissions rate for electricity generation in select countries. For those countries heavily dependent on coal generation, such as India and China, the emission rates are very high. Clearly, major efforts are needed to develop technologies to address emissions of those existing plants in order to decrease their CO2 emissions.

REDUcIng cO2 EMIssIOns WITH OXy-FUEl TEcHnOlOgy

To reduce CO2 emissions, many innovative ideas have been suggested and a number of technologies have been developed. The best strategy is to employ high-efficiency generation technology whenever possible, since it alone could reduce CO2 emissions by up to 20%, as shown in Table 1. However, to meet the newly proposed CO2 rules for new power plants and to reduce CO2 emissions by existing plants, some of the generated CO2 emissions from coal-fired power plants, even those from ultra-supercritical sources, must be captured and sequestered.

Currently, post-combustion capture (PCC), oxy-fuel combustion, and integrated gasification and combined cycle (IGCC) are the front runners to capture CO2, and major demonstration proj-ects for these three technologies are underway.3 Both PCC and oxy-fuel combustion are based on pulverized coal combustion

Overview of Oxy-fuel Combustion Technology for CO2 Capture

“It would appear that there

are no major technical obstacles

in implementing oxy-fuel

combustion for CO2 capture.”

The major aspects of oxy-fuel combustion, such as air separation, have been available commercially for years.

TEcHnOlOgy FROnTIERs


and yet the two approaches are very different. PPC uses chemical solvents to capture CO2, which is accomplished by adding equipment and processes to the existing power plants. Although PCC imposes very stringent standards on SOx and ash emissions, it does not have a significant impact on opera-tions of the power plant itself, though operating the PCC train adds considerably more complexity. Due to the nature of the technology, it is also the best option for partial CO2 capture.3

Oxy-fuel combustion, on the other hand, significantly changes how the combustion is conducted. It uses oxygen instead of air, thus eliminating nitrogen from the oxidant gas stream and producing a CO2-enriched flue gas. This flue gas is ready for sequestration after water has been condensed and other impurities have been separated out. A simplified schematic of oxy-fuel combustion is presented in Figure 1.

Oxy-fuel combustion for CO2 capture consists of three main components: the air separation unit (ASU) that provides oxygen for combustion, the furnace and heat exchangers where com-bustion and heat exchange take place, and the CO2 capture and compression unit. Due to the large quantity of high-purity oxygen typically required in oxy-fuel combustion, cryogenic air separation is currently the technology of choice for oxygen production. A large portion of the flue gas must be recycled back to the furnace for combustion temperature moderation and gas volume reconstitution to ensure proper heat transfer.

It is interesting to note that the concept of large-scale oxy-fuel combustion was first suggested in 1982—before climate change became a global concern—as a means to obtain CO2 for enhanced oil recovery (EOR). Oxy-fuel combustion has also been employed for productivity enhancement, fuel reduction, and NOx emissions reduction in the glass, aluminum, cement, steel, and incineration industrial sectors. These industrial applications are much smaller in scale compared with power generation and traditionally there was no intention to capture CO2.

Oxy-fuel technology has been developing rapidly since the late

1990s. The successes of in-depth theoretical examination of oxy-fuel combustion and accumulated bench and pilot-scale tests have led to several industrial-scale demonstrations since 2008. This progress is mainly due to the perceived superior-ity of the technology: It is viewed as a simple, but effective. Unlike post-combustion capture, there is no need to add a complicated chemical process to capture CO2. There is also no need for the power generation industry to adopt a completely new process (such as IGCC). The major components of oxy-fuel combustion, that is, coal combustion and air separation, are mature technologies that have been extensively employed, so that the retraining requirements for personnel are minimal.

One of the most noticeable advantages of oxy-fuel combustion is the low NOx emission, thanks both to the use of oxygen for combustion which eliminates nitrogen from air and to the NOx re-burning mechanism with flue gas recycling. More interest-ingly, recent research has shown that integrated emissions control of SOx, NOx, and mercury (Hg) may be possible as part of the oxy-fuel flue gas CO2 capture process.4 This alone could significantly reduce the cost of oxy-fuel combustion tech-nology. Oxy-fuel combustion is also being mentioned as an excellent option for retrofitting the existing fleet of modern pulverized coal-fired power plants for CO2 reduction.5

Pilot-scale oxy-fuel demonstrations have so far confirmed that plant operations can be effectively switched from air-firing to oxy-fuel firing, air infiltration can be effectively limited, a highly enriched CO2 flue gas can be produced for transporta-tion and storage, and significant NOx emissions reduction can be achieved. Based on these successful demonstrations, it would appear that there are no major technical obstacles in implementing oxy-fuel combustion for CO2 capture.

cHAllEngEs FAcIng gHg cOnTROl TEcHnOlOgIEs

Both PCC and oxy-fuel combustion technologies significantly reduce power plant net efficiency by up to 15%, according to

TABLE 1. CO2 emissions rate for various generation technologies

Subcritical PC Supercritical PC Ultra-supercritical PC Subcritical CFB IGCC

kg CO2/MWh 931 830 738 1030 832

Notes: PC is pulverized coal, CFB is circulating fluidized bed, IGCC is integrated gasification combined cycle

TABLE 2. Average CO2 emissions rate for electricity generation2

U.S. China India UK Australia Canada E.U. World

kg CO2 /MWh 528 790 936 470 847 183 243 573

50

the literature, while simultaneously raising capital costs, thus increasing the cost of electricity (CoE) for end users by as much as 100%. For example, in a recent paper6 examining the economic performance of both PCC and oxy-fuel combustion technolo-gies, the authors found that the net efficiency of the PCC power plant decreased from 45% of the reference plant (supercritical 1200 MWe gross) to 30%, while that of the oxy-fuel power plant decreased to 35%. The same paper also showed that the CoE for a PCC plant increased by 65% while that of an oxy-fuel plant increased by 48%. Another paper7 carried out an extensive review of literature on this topic, the results of which are sum-marized in Figure 2, where PCC and oxy-fuel combustion are compared. It is important to point out considerable uncertain-ties are naturally associated with these types of studies. This is mainly due to the complexity of the processes and the fact that no commercial operating plants exist. Based on cost reductions achieved during the commercialization (i.e., learning by doing) of other low-emissions technologies, there is certainly reason to hope that CCS costs can be reduced and net efficiency can be improved, but large-scale demonstrations will be instrumental.

Whereas Kanniche and colleagues6 showed that PCC had significant efficiency loss compared to oxy-fuel, Rubin and colleagues7 showed that the efficiency losses for PCC and oxy-fuel are relatively close with a slight advantage for the oxy-fuel

case. However, efficiency or even CoE should not be the only factor when considering which technology is more appropriate.

One significant advantage of the PCC process is that it can produce very high-purity CO2 ready to be compressed and transported, which is not the case for the oxy-fuel process. The main penalties of PCC are due to the requirement for solvent regeneration and solvent loss. Many research activi-ties are currently addressing these issues.7 PCC is sometimes considered a “messy” technology because of its use of large amounts of chemical solvent and the size of the equipment. The use of chemical solvent also gives PCC an edge in retrofit-ting existing power plants and in building the so-called “CO2 capture ready” power plants. One perceived weakness of PCC technology is that it requires very clean flue gas to minimize solvent loss due to impurity contamination. (This requirement also has ramifications when retrofitting existing power plants with PCC as most of the flue gas cleaning equipment will likely have to be upgraded as well.) Again, this disadvantage can be turned into an advantage because the PCC train can be easily turned off during periods when CO2 capture is not necessary (for example, when the power plant has reached its annual CO2 capture goal) while meeting emissions requirements for other air pollutants. Currently, SaskPower of Canada is retro-fitting a 150-MWe unit at its Boundary Dam location resulting

FIGURE 1. Schematic of an oxy-fuel power plant



in a 110-MWe PCC power plant. Note also that there are several other large-scale PCC-based power plants either under con-struction or being planned around the world.3

MAkIng OXy-FUEl PlAnTs MORE ATTRAcTIvE

The main drawbacks for oxy-fuel combustion are associated with the air separation unit (ASU) and the CO2 purification unit (CPU). Recently, significant progress has been made in developing an efficient CPU to process oxy-fuel flue gas. By its nature, the flue gas coming out of the oxy-fuel process will have some impurities in it, such as H2O, SOx, NOx, O2, and N2. These impurities must be removed or their concentrations reduced before the flue gas can be sent to pipelines to ensure safe transportation of CO2. Recent CPU development has dem-onstrated that the usual air pollutants such as SOx, NOx, and Hg can be completely removed from the flue gas stream so that the CPU acts not only as a CO2 purification unit but also as an emissions control unit. As a result, an oxy-fuel power plant can do away with equipment such as the flue gas desulfuriza-tion (FGD), selective catalytic reducer (SCR), and Hg control devices like activated carbon injection. This can lead to sig-nificant savings on capital investment and improved efficiency of the plant. Compared to PCC, the current state of oxy-fuel technology does not offer as much flexibility. Once a plant is built and optimized for oxy-fuel operation, it is difficult, some-times even impossible, to revert back to a sustained air-firing mode, especially if all the emissions control units have been removed. An oxy-fuel power plant is also not amenable for partial CO2 capture. As such, it requires long-term commit-ment and insurance that a viable CO2 market will exist during the entire life of the plant.

For a typical oxy-fuel power plant, the ASU accounts for almost two-thirds of the loss in efficiency. The ASU also is a major capital investment. As oxy-fuel technology was devel-oped, it became clear that the cost of oxygen production must

be improved to make oxy-fuel technology a viable contender as a GHG control technology. Although innovative technologies based on membranes have been in development in the past decade, notably the ion transport membrane and oxygen transport membrane, they are still far from being able to reliably produce the large amounts of oxygen required for a commercial-scale oxy-fuel plant. It is also not clear how mem-brane-based oxygen production can be effectively used in coal combustion applications.8 It seems that, for the near future, traditional cryogenic air separation will be predominant. This process has long been used in a wide variety of industries, and is highly optimized and reliable. New opportunities for fur-ther optimization arise when the ASU can be integrated in the thermal cycle of the power plant. According to Air Liquide,9 its new cryogenic low-energy oxygen production technology (called Oxy LE) is able to reduce oxygen production costs from the current $200 kWh/t O2 to about $185 kWh/t O2, and with thermal integration (Oxy XLE) the cost can be further reduced to $165 kWh/t O2. Air Liquide estimates that, by 2017, it can reduce the oxygen cost further to $150 kWh/t O2.

Another innovative approach to reduce oxygen cost involves oxygen storage. The basic idea is to operate the ASU during the evening when electricity demand is low and store the pro-duced O2 to be used during the day when ASU usage is kept to a minimum. By combining various innovative ideas, it is possible to considerably reduce the efficiency loss due to O2 production, probably reducing the ASU’s share of efficiency loss from two-thirds to less than one-half, resulting in a low-er net plant efficiency loss from the current 8–10 percentage points to roughly 6–7 percentage points.

Other areas for further improvement to oxy-fuel combus-tion consist of minimizing air ingress, which would lead to increased costs for CPU operation, and developing new high-temperature materials to allow the oxy-fuel plant to operate with higher O2 concentrations, thus reducing the energy requirement for flue gas recycle.

THE cURREnT sTATE OF OXy-FUEl

Globally, three pilot-scale oxy-fuel plants are in operation3; interestingly, all three are quite distinct, thus offering valu-able experience in building various oxy-fuel plants. Vattenfall GmBH has had a 30-MWth newly built PC-fired oxy-fuel plant in operation since 2008 in Schwarze Pumpe, Germany. In Biloela, Queensland, Australia, Callide Power Station has retrofitted a 30-MWth existing PC-fired power plant to operate in oxy-fuel mode. And, in Ciuden, Spain, Endesa has a newly built 30-MWth oxy-fuel plant using circulating fluidized bed combus-tion (CFBC) technology. Despite these different approaches, all three projects are successful in that they can all produce high CO2 concentration flue gases that can be purified for pipeline

0

5

10

15

20

25

30

35

40

45

50

Net plantefficiency (%)

w/o CCS

Net plantefficiency (%)

with CCS

Additional energyinput (%) per net

kWh output

Reduction in net kWhoutput (%) for

a fixed energy input

Subcritical PC, PCC

Supercritical PC, PCC

Supercritical PC, oxy-coal

FIGURE 2. Techno-economic analyses of PCC and oxy-fuel technologies

52

transportation. Even though most R&D work has been focused on PC-fired oxy-fuel plants, Endesa successfully showed that a CFBC is just as capable. The Australian project showed that it is possible to retrofit an existing and rather old power plant for oxy-fuel operation.

Based on the operating experience of these pilot projects, several boiler manufacturers are confident that they can build a reliable, commercial-scale oxy-fuel power plant right now. As a FutureGen 2.0 project, Babcock & Wilcox has started the front-end engineering and design work for a 168-MWe oxy-fuel plant in Illinois, U.S., with the goal of capturing approximately 1.1 million tonnes of CO2 per year, which represents more than 90% of the power plant’s carbon emissions. Foster Wheeler is planning a 323-MWe oxy-fuel CFBC power plant in Compostilla, Spain, and Alstom is planning a 426-MWe oxy-fuel plant in White Rose, UK, as well as a 350-MWe oxy-fuel plant in Daqing, China.10

Another area that is getting more attention recently is the required quality of the CO2 for pipeline transportation. Unlike PCC, which essentially produces a stream of nearly pure CO2, an oxy-fuel plant may produce a less concentrated CO2 due to non-condensable gases. While technologies exist to fur-ther purify the CO2, additional costs and energy penalties are incurred. It is important to know what concentration of CO2 and individual impurities limits are needed for safe pipeline transportation. On the system side, operating the boiler at elevated pressures has received considerable attention due to the increased efficiency it provides.11

In conclusion, oxy-fuel combustion technology is at a point where it is considered near commercial from a technological point of view. What is needed now is a successful large-scale demonstration plant. This step is now being undertaken in several countries such as U.S., UK, and China, albeit cautiously. By further improving the economics of the oxy-fuel combus-tion, for example, by reducing the cost of O2 production and reducing the energy penalty due to both the ASU and CPU, it is

likely that oxy-fuel combustion will overcome the last hurdles and reach full commercialization.

REFEREncEs

1. IPCC (Intergovernmental Panel on Climate Change), Climate Change 2013: The Physical Science Basis, 2013, www.ipcc.ch/report/ar5/wg1/#.UqDC6MRDvvo

2. International Energy Agency, IEA Statistics: CO2 Emissions from Fuel Combustion, 2012 Edition.

3. Global CCS Institute, The Global Status of CCS: 2013, 2013, www.globalccsinstitute.com/publications/global-status-ccs-2013

4. V. White, K. Fogash, Purification of Oxyfuel-Derived CO2: Current Developments and Future Plans, 1st IEA Oxy-fuel Combustion Conference, Cottbus, Germany, 7–10 September 2009.

5. T. Wall, R. Stanger, Industrial Scale Oxy-fuel Technology Demon-stration, “Oxy-fuel Combustion for Power Generation and Car-bon Dioxide (CO2) Capture”, Zheng (editing), Woodhead Publish-ing, U.K., 2011.

6. M. Kanniche, R. Gros-Bonnivard, P. Jaud, J. Valle-Marcos, J.-M. Amann, C. Bouallou, Pre-combustion, Post-combustion and Oxy-combustion in Thermal Power Plants for CO2 Capture, Applied Thermal Engineering, 2010, 30, 53–62.

7. E. Rubin, H. Mantripragada, A. Marks, P. Versteeg, J. Kitchin, The Outlook for Improved Carbon Capture Technology, Prog. Energy Combust. Sci., 2012, 38, 630–671.

8. M. Prosser, M. Shah, Current and Future Oxygen Supply Technol-ogies for Oxy-fuel Combustion, “Oxy-fuel Combustion for Power Generation and Carbon Dioxide (CO2) Capture”, Zheng (editing), Woodhead Publishing, UK, 2011.

9. P. Terrien, R. Dubettier, M. Leclerc, V. Meunnier, Engineering of Air Separation and Cryocap™ Units for Large Size Plants, Third IEA GHG Oxy-fuel Combustion Conference, 2013, Ponferrada, Spain.

10. D.K. McDonald, FutureGen 2.0: Power Block Design and Integra-tion, IEAGHG OCC3 Conference, Ponferrada, Spain, 11 Septem-ber 2013.

11. B. Clements, L. Zheng, R. Pomalis, T. Herage, High Pressure Oxy-fuel (HiPrOx) Combustion System, “Oxy-fuel Combustion for Power Generation and Carbon Dioxide (CO2) Capture”, Zheng (editing), Woodhead Publishing, U.K., 2011.

The authors can be reached at [email protected] and [email protected]



By Magnus MörtbergProduct Management CCS,

Alstom Environmental Control & Carbon Capture Systems

Alstom has developed a comprehensive portfolio of power generation technologies, which allow its customers to generate reliable, environmentally friendly electric-

ity. Currently, one of the greatest challenges to the power sector is reducing the associated greenhouse gas emissions; power generation is one of the biggest sources of man-made carbon dioxide (CO2) emissions, the main anthropogenic greenhouse gas. Innovative low-carbon technologies will be required to enable the power sector to meet the global demand for electricity, while controlling CO2 emissions and thus reducing the impact on climate change. To achieve mean-ingful reductions, it will be necessary to develop technologies that can be applied to both Greenfield projects and the exist-ing fleet through cost-effective retrofits.

Alstom is engaged in the development of a flexible portfolio of carbon capture technologies from theoretical or laboratory-scale to commercial products, applicable to gigawatt-size coal-fired power. The two most advanced technologies for carbon cap-ture are post-combustion capture and oxy-fuel combustion. Alstom’s post-combustion technologies include the Chilled Ammonia Process (CAP) and the Advanced Amine Process (AAP). Examples of second-generation technologies include Chemical Looping Combustion (CLC) and Regenerative Calcium Cycle (RCC). In this article, these processes are described and the advancements to date are highlighted.

POsT-cOMBUsTIOn cAPTURE TEcHnOlOgIEs

chilled Ammonia Process1

Alstom’s CAP (see Figure 1 for a simplified process layout) is designed around the reaction of flue gas CO2 with an ammonia- based solvent at ambient pressure and low temperatures in the absorber. The CO2-laden solution is pumped to the regenerator where the CO2 is released from the solvent at moderately elevated temperatures. Ammonia is a common and widely used chemical; the ammonia reagent in the CAP plant also lends itself to established permitting require-ments, including any waste disposal issues that may arise. The by-product from the CAP facility is a liquid ammonium sulfate stream that has commercial value as a fertilizer. Optionally the ammonia is recovered in a dedicated ammonia recovery unit, and in this case the final by-product is gypsum, a well-known by-product for power plant operators.

A distinguishing feature of the CAP, relative to a host of amine-based technologies, is solvent stability. Ammonia does not undergo the types of oxidative and thermal degradation reactions that are encountered with amines. The latter charac-teristic allows for higher temperature regeneration to produce

Alstom’s CCS Technologies

The Chilled Ammonia Process, currently being tested at the Technology Center Mongstad, Norway, is one of many CO2 capture technologies being developed by Alstom.

“Innovative low-carbon

technologies will be required to

enable the power sector to meet

the global demand for electricity,

while controlling CO2 emissions…”

54

a higher pressure CO2 product, thus reducing compression requirements.

The technology has been verified in several field pilots and validation facilities, which are discussed below. Application of CAP to a coal-fired power plant has been laid out in Alstom’s reference design, which will be the basis of Nth-of-a-kind designs once CAP is being applied commercially. This is a stan-dardized process and mechanical design that can be used for commercial implementation and in a front-end engineering and design (FEED).

CAP Field Pilots and Validation Facilities

Select CAP pilot and validation facilities are discussed below. The validation objectives are intended to confirm and optimize pro-cess performance, mechanical layout, material selections, and process modeling capabilities, and to minimize the energy penalty.

Mountaineer Product Validation Facility, West Virginia, U.S.

A slipstream (i.e., 58 MWth) of flue gas was treated at American Electric Power’s (AEP) Mountaineer power plant using CAP. The flue gas was extracted from a location downstream of an existing wet flue gas desulfurization (WFGD) system. The unit was designed to capture and store approximately 100,000

tonnes CO2/yr and treat approximately 80,000 Nm3/hour of flue gas, or 1.5% of the total plant flue gas flow.

All the operational achievements were confirmed during steady-state operation of the CCS validation plant. The formal testing program for the validation project was successfully completed at the end of May 2011 after a 21-month period. Analysis of the operating results has been used to validate the predictions of Alstom’s process simulation models as well as show the robust-ness and competitiveness of the CAP technology.

Technology Center Mongstad (TCM), Norway

TCM, which is owned by Gassnova, Statoil, Shell, and Sasol, is the world’s largest facility for testing of carbon capture tech-nologies. The center is located next to the Mongstad Refinery on the west coast of Norway. The installation of CAP at TCM was a natural step following the successful application of CAP at AEP’s Mountaineer plant.

The unique location of TCM, next to the refinery, provides interesting opportunities in terms of gases to be treated. The plant at TCM is designed to treat both refinery off-gas from an oil residue cracker unit and the exhaust from a natural gas turbine-based combined heat and power plant. The unit was designed to capture and store approximately 82,000 tonnes CO2/yr. Testing is currently in progress and expected to be completed by November 2014.


FIGURE 1. Chilled Ammonia Process layoutAlstom ©2013


Advanced Amine Process2

The AAP (see Figure 2 for a simplified process layout) is based on the chemistry of the amine-CO2-H2O system and the ability of amine solution to absorb CO2 at low temperature in the CO2 absorber. The CO2 is released at increased pressures when the solution is heated to moderately elevated temperatures in the CO2 regeneration vessel.

The AAP technology has been verified in several field pilots and validation facilities and its implementation to a coal-fired power plant has been laid out in Alstom’s reference design of AAP and in a FEED.

Several pilot-scale tests have been completed using the AAP on coal-fired power plant flue gas in order to scale up the process for commercialization. For this reason, during the pilot and valida-tion testing, one of the parameters studied was the long-term impact of oxygen and trace contaminants present in the flue gas on the solvent stability.

Charleston Pilot Plant, West Virginia, U.S.

Between 2009 and 2011 Alstom Power and Dow Chemical joint-ly operated a carbon capture pilot plant located at Dow’s South Charleston facility in West Virginia, U.S. The pilot plant treated an exhaust slip stream from a coal-fired utility boiler and the pilot was designed for Dow’s UCARSOL™ FGC 3000 amine solvent.

The pilot plant is designed to capture 1800 tonnes CO2/yr.

The principal objective of this pilot was to gain both amine sol-vent management and process system operating experience on coal-fired flue gas for an extended duration. One important goal was to obtain the operational data necessary to validate simulation models that could later be used to predict the per-formance of much larger demonstrations. As the design of the Charleston pilot plant offered a wide range of process con-figurations, various improved flow schemes were examined in comparison to a conventional, basic flow scheme. Process performance parameters such as CO2 capture efficiency, amine solvent and flue gas flow rates, and thermal duties of different flow schemes were examined.

EDF Pilot Plant, LeHavre, France

Another AAP pilot plant is located at EDF’s LeHavre facility in France. This power plant has three boilers and the AAP pilot plant treats an exhaust slipstream from Boiler 4, a hard coal-fired boiler with an electricity production rate of 600 MWe gross.

The pilot plant is designed to capture 25 tonnes CO2/day from the flue gas exiting the boiler. A nominal 5000 Nm3/hour slip stream (i.e., 5 MWth) of exhaust gas is withdrawn from the WFGD exhaust stack and directed to the pilot plant. The scrubbed flue gas stream and the CO2 product stream are both returned to the main exhaust duct leading to the plant chimney.

FIGURE 2. Advanced Amine Process layoutAlstom ©2013

56

The process configuration is based on a proprietary design, jointly developed by Dow and Alstom, to provide minimal energy consumption, robust performance, and improved solvent management capabilities. Testing began in July 2013 and is expected to continue until March 2014. One important aspect of this pilot project is it will include transient operation to study the potential effects of load following in coal-fired power stations using AAP to remove CO2.

OXy-FUEl cOMBUsTIOn3

Based on years of developing boilers as well as air quality control systems, Alstom is a natural fit to be a global leader in oxy-fuel combustion technology development. Oxy-fuel combustion technology is based on two main components: an oxy-boiler for steam generation and a gas processing unit (GPU) for removing and purifying the CO2 from the flue gas stream. During the oxy-fuel combustion process the fuel is burned in an atmosphere of recirculated flue gas admixed with almost pure oxygen. Due to the lack of atmospheric nitrogen, the resulting flue gas consists largely of CO2 and water vapor as well as other fuel-specific flue gas components. A layout of Alstom’s oxy-fuel process is shown in Figure 3. This process consists of the following unit operations:

• Air separation unit (ASU) for oxygen production

• Combustion in an oxy-fuel boiler• Flue gas conditioning • Gas processing unit for CO2 separation• CO2 compression

Alstom’s oxy-fuel technology has been verified in several field pilots and validation facilities and its implementation to a coal-fired power plant has been laid out in Alstom’s reference design of the oxy-fuel boiler technology for the power plant and the GPU for removing and purifying the CO2 from the flue gas stream.

Several pilot plants have been operated to provide important new findings, in particular in the area of the overall operation of the oxy-fuel combustion plant, i.e., safe handling of oxygen, start-up, shutdown, change from air-firing to oxy-firing, dynamic behavior of the system, etc. The observations made and expe-riences gained have further substantiated the knowledge of the combustion process and firing technology in order to improve the equipment design.

Schwarze Pumpe, Germany

Vattenfall’s 30-MWth Schwarze Pumpe pilot, 75,000 tonnes CO2/yr, was the site of the world’s first large-scale testing of the entire oxy-fuel combustion technology chain (i.e., ASU, oxy-boiler including indirect firing system, flue gas cleaning


FIGURE 3. Oxy-fuel plant layout*Example Only, different options are possible for the secondary recirculation positioning

Alstom ©2012


components, and CO2 purification plant constructed on site). As a technology partner of Vattenfall, Alstom designed and built the boiler, burner, and ESP (electrostatic precipitators), and participated in the comprehensive test program of the pilot. The 30-MWth pulverized coal-fired boiler and the firing system with a single burner (arranged on the top of the fur-nace) were designed to allow for a maximum of operational flexibility (i.e., 100% load can be operated both at air and at oxy-fuel firing conditions). The pilot plant produced its first liquefied CO2 in 2008.

Alstom Boiler Simulation Facility (BSF), Connecticut, U.S.

Alstom’s BSF is a 15-MWth tangentially-fired pilot facility at Alstom’s Windsor, CT, location. The BSF is an atmospheric pressure, balanced draft, combustion test facility designed to replicate the time-temperature-stoichiometry operating condi-tions of typical utility boilers. From September 2009 through November 2012, under a joint Alstom–U.S. Department of Energy development program, Alstom conducted a comprehen-sive test program with eight oxy-fuel combustion test campaigns firing five different coals, gaining considerable knowledge about the firing characteristics of different coals in oxy-fuel combus-tion conditions and the associated boiler equipment.

Alstom Mobile Gas Processing Unit, Sweden

Alstom has designed and built a mobile gas processing unit (GPU) with a capacity equivalent of 0.3 MWth, designed to purify CO2 from oxy-fuel combustion. The GPU technology is an integral part of the oxy-fuel combustion technology allow-ing Alstom to offer the complete oxy-fuel chain including coal preparation, combustion, power generation, flue gas treat-ment, and CO2 purification and removal. Since 2011 Alstom has performed an extensive validation program on the pilot. The CO2 compression pilot is equipped with a four-stage recip-rocating compressor (max 40 bar), intercoolers, and separators after each stage. A gas mixing system is provided to generate synthetic flue gas for multiple flue gas configurations, in order to validate the various GPU concepts possible for large-scale projects. An eight-channel on-line gas analyzer monitors key parameters in the GPU process. The purification pilot includes driers and equipment for cryogenic purification.

sEcOnD-gEnERATIOn TEcHnOlOgIEs

Besides the above-mentioned first-generation carbon capture technologies, Alstom is developing different second-gener-ation technologies as well, which are in an earlier stage of development but hold promise for the future in respect of

FIGURE 4. Chemical looping combustion plant layoutAlstom ©2012

58

significantly reduced energy penalties and the associated cost of electricity. Whereas first-generation technologies are commercially available today, second-generation technologies are still in the early phases of product development and pilot plant operations.

chemical looping combustion

CLC is a technology that significantly reduces the energy pen-alty associated with CCS since there is no need for a traditional cryogenic air separation unit; instead a solid oxygen carrier provides oxygen during coal combustion. Evaluations made by Alstom show that CLC could offer one of the lowest costs for coal-based electricity with CO2 capture.

The CLC system (see Figure 4 for a process layout) oper-ates with two reactors: an air reactor, where a solid sorbent adsorbs oxygen from air and is then conveyed to the fuel reactor. In the fuel reactor, oxygen is released and combustion with the fuel (e.g., coal) occurs in a nitrogen-free atmosphere. Subsequently, the sorbent is recycled to the air reactor closing the loop. The oxygen carriers can be metal oxides or limestone based, both of which are inexpensive commodities. Given the early development stage of the technology, there is still a need for process verification and optimization.

The CLC process has several benefits that result in a lower energy penalty compared to first-generation CCS technologies. The reactor technology development benefits from Alstom’s vast experience in designing and constructing CFB (circulating fluidized bed).

The CLC technology is being developed and there are two pilots in operation:

• ÉCLAIR 1-MWth pilot at Darmstadt University, Germany, RFCS funded

• 3 MWth at the Alstom Windsor Lab, CT, sponsored by U.S. DOE

Regenerative calcium cycle

The RCC technology (see Figure 5 for a process layout) is a new post-combustion system with potential application for both power generation and the industrial sector, such as cement pro-duction or iron and steel production. The RCC process utilizes two reactors. In the carbonator, CO2 from the flue gas reacts with lime (CaO) forming limestone. In the second reactor, the calciner, the limestone is converted back into lime and pure CO2 is released which can then be easily captured. The benefit of using limestone is its low price and abundant availability.

Evaluations made by Alstom show that RCC could offer one


FIGURE 5. Regenerative calcium cycle plant layoutAlstom ©2012


of the lowest costs for generated electricity for coal power with carbon capture. The reduction in costs can be attributed to the excess energy produced in the CO2 capture process. This excess energy can be used for power production as well, meaning there no loss of net electrical output, which is posi-tive for retrofits of existing power stations and an added value for industrial applications.

The RCC technology is currently under development with one pilot in operation:

• 1 MWth at University of Darmstadt, Germany, RFCS funded

cOMMERcIAl APPlIcATIOns

Alstom has developed reference designs for a commercial-scale steam power plant equipped with first-generation carbon capture technologies (i.e., post-combustion capture and oxy-fuel combustion) and is able to offer these technolo-gies at full scale today.

An integrated approach has been taken to the commercial reference plant design, considering the performance and trade-offs of all different plant components and process scenarios. Alstom, as a plant integrator and supplier of major subsystems to steam power plants, is able to apply an inte-grated approach to plant design optimized for overall plant performance and cost of electricity.

Applying a global approach to plant design allows for:

• Integration of flue gas cleaning strategies• Optimization of the arrangement and plant layout• Optimization of heat integration between the different

components• Optimization of safety margins on each component to

improve power plant performance

Through this optimization, significant increases in net plant efficiency are achieved.

cOnclUsIOn

Alstom has developed a portfolio of leading first-generation CCS technologies (CAP, AAP, and oxy-fuel) that have been proven at pilot plant size (up to 58 MW) and are ready to help drive the development of the CCS market for power plants and industrial applications. The stability and performance of these first-generation CCS technologies have been confirmed in pilot plants and are being commercially offered today.

Alstom’s technologies for CCS can easily be implemented for carbon capture and utilization as well; they offer a good fit for industrial applications such as enhanced oil recovery, urea production, and methanol production.

The development of the CCS market is currently characterized by large-scale pre-commercial applications, but requires tech-nologies that have been proven and are ready for scale-up. Alstom has the know-how required for scaling up CCS technolo-gies and implementing them in power plants.

In order to further improve the CCS technologies, large-scale demonstration projects are needed to enable additional cost and performance improvements. This requires financial support mechanisms for both the capital expenditure and operation expenditure involved in building and operating such plants.

The performance of first-generation technologies will further improve as the market matures and more units are built; potential improvements include reduced energy penalties and improved cost of electricity. Second-generation technologies will be needed to deliver a step change in cost and perfor-mance. Alstom is taking a long-term perspective by investing in development with R&D programs on CLC and RCC for power and industry, both of which potentially offer the benefit of very low energy penalties.

Alstom has a long history as a technology developer and has structured a R&D process capturing and developing concep-tual ideas whose feasibility is confirmed in lab-scale activities and further validated and fine-tuned through field pilot and validation units before commercial deployment. This strong development effort has made Alstom a leader in CCS technol-ogies for power and industry.

REFEREncEs

1. J. Askander, R. Agarwal, J. Luk, S. Lanka, R. Hiwale, K. McCar-ley, M. Pontbriand, G. Lombardo, Chilled Ammonia Process at Technology Center Mongstad–First Results, Proceedings of Pow-erGen Europe 2013, 2013, pennwell.websds.net/2013/vienna/pge/papers/T2S7O3-paper.pdf

2. C. Edvardsson, L. Czarnecki, D. Theophile, O. Deruelle, F. Cho-pin, C. Schubert, E. Klinker, Recent Developments on Advanced Amine Process Technology and Pilot Plant Operation, Proceed-ings of PowerGen Europe 2012, 2012.

3. F. Kluger, P. Moenckert, G. Stamatelopoulos, A. Levasseur, Al-stom’s Oxy-Combustion Technology Development—Update on Pilot Plants Operation, Proc. 35th Int. Tech. Conf. Clean Coal & Fuel Systems, 2010, 1, 24–35.


60

By Wu Xiuzhang Deputy Chief Engineer, Shenhua Group

Chairman, China Shenhua Coal to Liquid and Chemical Co., Ltd.

The Chinese government places great importance on the issues of greenhouse gas emissions and climate change. On the eve of the 2009 Copenhagen conference, the gov-

ernment of China put forth a target of reducing CO2 emissions per unit of GDP in 2020 by 40–45% compared to 2005. In the “Outline of the 12th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China”, China stated its plan to “significantly reduce the intensity of energy consumption and the intensity of carbon dioxide emis-sions, effectively controlling greenhouse gas emissions”, which highlighted China’s conviction and determination to combat climate change.

Shenhua Group is one of the largest coal-based integrated energy suppliers in the world. In recent years, there have been significant improvements in the coal-to-liquids and coal-to-chemicals sector. These improvements have led the way for strategic energy security projects, such as domestically producing petroleum alternatives and developing clean coal technology in China and the world. While actively promoting petroleum alternatives and clean coal technologies, Shenhua Group is also paying close attention to major issues such as CO2 emissions and climate change, and is actively exploring

the development of a coal-based low-carbon energy system for China. One major step in this development is the compre-hensive (i.e., capture and storage) CCS project at its Ordos direct coal liquefaction facility.

InTRODUcTIOn TO ccs

CO2 capture and storage consists of the three major processes of capture, transportation, and storage. Presently several capture approaches have been commercialized in various industries, such as solvent absorption, adsorption, membranes, and the cryogenic separation method. Liquid amine absorption is the most advanced capture technology. For large-scale CO2

transportation, pipelines are generally used. CO2 storage includes options such as geological storage, mineral sequestration, biological seques-tration, and resource production [i.e., enhanced oil recovery (CO2-EOR) and enhanced coalbed methane recovery (CO2-ECBM)]. As current estimates show that geological storage has the greatest capacity, discussions involving CCS often refer to geological storage.

Since the 1970s, regions such as the U.S. and Europe have gradually mastered CO2 utilization (called CCUS) for CO2-EOR, including CO2 flooding theory, displacement process, monitoring, anti-corrosion technology, and simulation abilities.

In the past two decades, researchers have also made progress related to CO2-ECBM in the areas of coal adsorption theory, storage mechanisms, replacement simulations, and engineer-ing technology.

Currently, deep salt/saline aquifer storage (DSR) is one of the most prominent storage methods. Its features include


Shenhua Group’s Carbon Capture and Storage Demonstration

“While actively promoting

petroleum alternatives and clean

coal technologies, Shenhua Group

is also … actively exploring the

development of a coal-based low-

carbon energy system for China.”

The Shenhua CCS demonstration project, located in Ordos, Inner Mongolia, is China’s first deep saline aquifer storage project with a capacity of 100,000 tonnes CO2/yr.


huge storage volumes and the ability to achieve permanent storage. In Europe, North America, Australia, and Japan, in-depth research is being carried out on deep salt/saline aquifer storage mechanisms, potential assessment techniques, geo-chemical effects, safety and risk assessments, monitoring techniques, and other important aspects.

In China, there have been demonstrations of both CCUS and CCS. China’s National Petroleum Corporation (CNPC) and Sinopec have successively launched CO2-EOR campaigns in the oil fields of Jilin, Zhongyuan, Shengli, Jiangsu, Daqing, Changqing, etc., and have gained notable research achieve-ments. China Huaneng Group and China Power Investment Corporation have built prototypes to capture CO2 from flue gas in Beijing, Tianjin, and Shanghai, and in Chongqing, respectively. China United Coalbed Methane Co., Ltd. has been conducting CO2-ECBM pilot experimental projects in two wells. Shenhua Group’s salt/saline aquifer storage demonstration project in Ordos, the focus of this article, has been operating since 2011.

OvERvIEW OF THE sHEnHUA ccs DEMOnsTRATIOn PROJEcT

Shenhua’s 100,000 tonnes CO2/yr CCS demonstration proj-ect, which is currently in operation, is located in Ejin Horo Banner of Ordos City, Inner Mongolia. It is currently China’s first pilot project for deep salt/saline aquifer storage, as well as China’s first entirely coal-based CCS demonstration proj-ect. The project channels some of the CO2 exhaust discharged

from Shenhua’s direct coal liquefaction plant to a storage site located about 11 km to the west.

After several years of research, Shenhua Group developed a high-concentration CO2 purification (i.e., capture) technology. Shenhua also selected the CO2 transport method, and developed the potential storage assessment technology and transport simu-lation technology for saline aquifer storage. In addition, storage safety assessment techniques, warning techniques, and super-vision techniques were brought into the operation. By building, running, tracking, and monitoring the demonstration project, comprehensive evaluations have been carried out, which in turn have led to a comprehensive package for CO2 capture, transport, storage, and supervision techniques, building a CCS R&D plat-form, and forming a CCS R&D team.

shenhua ccs Demonstration Technologies

CO2 Capture Process

The first step of the CO2 capture process is to compress the CO2 from the gasification unit in the direct coal liquefaction pro-cess. The pressurized CO2 then is subjected to desulfurization and deoiling, temperature swing adsorption (TSA) dehydra-tion, freezing, liquefaction, distillation, and deep refrigeration. Thereafter, the processed CO2 is sent to a tank that is then loaded onto a platform truck to be delivered to the storage area. The CO2 capture process is shown in Figure 1.

Trucks are used to deliver 100,000 tonnes CO2/yr to the Shenhua CCS project storage site.

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CO2 Storage

Cryogenic liquid CO2 is transported by trucks to the storage site, where it is then unloaded to a low-temperature buffer tank. When a certain storage level is reached in the tank, the storage pump is activated to inject the cryogenic liquid CO2 warmed by the heater into the first injection well. During the injection process, there is continual heat exchange with the stratum, and the supercritical state is reached after injection.

The Shenhua project adopted a sequestration plan that encompasses multilayered injection and layer-by-layer moni-toring. This provides the opportunity to measure important parameters to assess the movement and spread of supercriti-cal CO2 in different strata. In the injection process, the injection is monitored at every layer by the monitoring equipment of the corresponding layer in the first monitoring well. The monitoring equipment in the second monitoring well mainly monitors potential leakage of CO2 in the storage process; it is a form of safety monitoring. In addition, the area is assessed for stratigraphic changes through vertical seismic profile (VSP) earthquake monitoring conducted annually. A diagram for Shenhua’s CO2 storage project is shown in Figure 2.

Feasibility and Security Storage Measures

To ensure that the single-well 100,000 tonnes CO2/yr injection rate can be safely maintained even in the stratum with low porosity and low permeability, the Shenhua CCS demonstra-tion project fully utilizes all potential storage layers and carries out different forms of fracturing on three of the five layers. By increasing the injection interface, the impact of the low-porosity, low-permeability stratum on the injection has been reduced.

To prevent leakage of injected CO2 along the wellbore, special materials are used in the casings and injection pipes, and throughout the drilling process; at the same time, gas seal tests are conducted on every casing interface as well as every injection pipe interface. The cement slurry of intermediate casings and production casings are also returned to grade level and checked for adequate assurance of cementing quality.

The control of key parameters such as injection tempera-ture and injection pressure is crucial for geological storage. Differing from reported experiences overseas, in this project the injection temperature is based on the supercritical state of the CO2 entering the stratum, and is adjusted based on the

FIGURE 1. Flow chart of Shenhua’s CO2 capture process

CO₂ tank

Gas-liquidseparator

CO₂ Compressor

Oilremoval

cleanup

Filter

heater

Heat exchangerCO₂ liquefaction

CO₂purification

towerCO₂ cooler

pump

CO₂feed gas

Desulfurization unit



fluctuations in the injected amount. The injection pressure is based on the principle that the inlet pressure of the most shallow injection layer should be less than 80% of the fracture pressure of that stratum; this provides an adequate safety margin to ensure that no fissure appears at the storage layer, which could affect the seal of the cap rock.

Project Monitoring System

The key to the success of CCS lies in the injectivity of the stra-tum and the reliability of the storage. In China, there is a lack of engineering practice in the field of saline aquifer storage. Therefore, in addition to the previously mentioned tech-nologies, the Shenhua project has incorporated a series of comprehensive monitoring systems.

The Shenhua CCS demonstration project employs an approach utilizing one injection well and two monitoring wells. The first monitoring well is used to monitor the temperature and pressure changes in each storage layer, while the second mon-itoring well is used to monitor the pressure and temperature changes in the aquifer above the regional cap rock. Water samples are also regularly drawn from the second monitoring well for laboratory analysis to promptly detect any potential leakage in the regional cap rock.

The grade-level monitoring system is mainly comprised of air, soil, surface water, and ground deformation monitoring systems, all of which continuously monitor the injection site. Through a series of engineering techniques and practices, the feasibility and leak-proof security of the injected CO2 has been successfully demonstrated in the Shenhua CCS demonstration project.

Recent Progress

There has been some important recent progress in the project, which is summarized below:

1. In July 2013, the second monitoring well was used to com-plete a second VSP earthquake test, and a comparative study is currently being carried out with the 2011 monitor-ing results.

2. In August 2013, the “First Large-Scale Exploration of Car-bon Dioxide Capture and Geological Storage in China”, a monograph of the Shenhua CCS project, was officially pub-lished.1

3. On 27 September 2013, the third production test was completed, and a comparative study of the three tests, which includes those from 2011 and 2012, is currently being conducted.

4. As of late October 2013, a total accumulated amount of 154,000 tonnes of CO2 have been injected. At the start of 2012, the injection rate reached or exceeded the design value.

Investment and cost Analysis

According to investment and operating cost calculations, under current conditions the full cost of capturing and storing each tonne of CO2 is 273 RMB/tonne CO2 (US$45/tonne CO2), including the construction cost of 88 RMB/tonne CO2 (US$14/tonne CO2) and operating cost of 185 RMB/tonne CO2 (US$30/tonne CO2). Once industrial scale is reached, storage and transport costs will be reduced by using pipelines for trans-port; the total cost for CCS can be further reduced to achieve commercially acceptable standards.

seven Major Breakthroughs

The Shenhua CCS project is the first of its kind and has resulted in a new CCS technology and increased knowledge related to storage. Seven major breakthroughs deserve mention:

1. The project is currently the world’s first and only comprehen-sive demonstration project that combines CO2 capture from coal-to-chemicals and deep saline aquifer storage. It is Asia’s first comprehensive CCS demonstration project that com-bines capture, purification, compressed storage, injection, low-permeability geological storage, as well as monitoring.

2. This is the first project tailored to geological storage of CO2 in low-porosity, low-permeability saline aquifers, whereby CO2 is injected into a saline aquifer and fractures have been used to enhance permeability. This is an important investigation because China’s geology is characterized by similar storage sites.

CO₂ tank

Heater

Injection pumpMonitoring

well 1

Injection well

Monitoringwell 2

FIGURE 2. Schematic diagram of CO2 storage

64

3. In addition to storage in the saline formation, the project has achieved the storage of CO2 in limestone, thus expanding the scope of CCS applications and providing new solutions for CO2 storage from emission sources in other regions.

4. Under the project, new approaches to determine the suit-able injection temperature, injection pressure, and other important parameters have been developed for CO2

injec-tion into low-porosity, low-permeability saline aquifers.

5. The project pioneered multilayered injection and layer-by-layer monitoring, providing the best injection solutions for a range of strata that could be encountered during large-scale, industrialized CCS in China.

6. The project has adopted and implemented simulation tech-

nology for the transport and spreading of CO2 in fractured media as well as simulation technology for the transport and spreading of CO2 under multilayered injection.

7. The project successfully demonstrated synchronized implementation and completion of industrial production, learning, and research. At the same time, the multidisci-plinary, multifield, and multi-industry management has formulated a successful management model for the devel-opment of the CCS industry.

sIgnIFIcAncE OF THE sHEnHUA ccs DEMOnsTRATIOn PROJEcT

The Shenhua CCS demonstration project has been highly val-ued by industry, both domestic and international, as well as many ministries and commissions within China. It has succes-sively been listed as a development project by the Ministry of Science and Technology, the National Energy Administration, and the China Geological Survey under the Ministry of Land and Resources; it is also a China-U.S. international cooperation project and has been recognized by many other key national scientific research groups. It was also subsidized by the Ministry of Environmental Protection due to its environmental and public benefits.

The Shenhua CCS demonstration project has successfully demonstrated the entire CCS chain, indicating Shenhua has created several major breakthroughs in key CCS technolo-gies. When the project is under normal operations, the annual reduction of CO2 emissions is equivalent to the total volume of CO2 absorbed and stored by 274 hectares of broadleaf forest. The successful implementation of Shenhua’s CCS demonstration project has uncovered China’s storage potential through active exploration of CO2 geological storage capacity. It has promoted the status of R&D and the CCS-related demonstration work of the country, and laid a foundation for enhanced CCS and CCUS. CCS will have a profound impact in the fight against climate change.

REFEREncEs

1. Carbon Dioxide Capture and Geological Storage: The First Mas-sive Exploration in China, 2013: Science Press.

This monitoring well is utilized in layer-by-layer monitoring.



By Peta AshworthGroup Leader, Science into Society, Division of Earth Science and Resource Engineering, Commonwealth Scientific and Industrial

Research Organisation (CSIRO)

With the release of the Fifth Report from the Inter-governmental Panel for Climate Change, the need to contain global greenhouse gas emissions has

never been more apparent.1 However, across the world a concerted approach toward mitigating these emissions is less than evident. Although individual governments are imple-menting a range of strategies to try to achieve an emissions reduction,2 it has become apparent that the scale and rate of progress mean that the chances of limiting climate change to 2°C are almost impossible. With a need for secure and afford-able energy, and given the projections for the continued use of fossil fuels, without carbon capture and storage (CCS) as part of the energy portfolio the outlook is quite bleak for climate change mitigation efforts. Therefore researchers and policy makers working in the field of climate change mitigation

continue to examine the potential of CCS as a key technology to reduce emissions at a large scale.3 Given the slow progress of CCS deployment, however, there remains limited public awareness of the potential contribution of the technology to mitigating the rate of CO2 emissions. This lack of awareness, combined with some perceived risks of CCS, and, in some instances, philosophical opposition to CCS, has led to some opposition from local communities concerning CCS projects. Although not limited to CCS projects, community opposition is a challenge that will need to be overcome if there is to be ongoing deployment of commercial CCS projects in the future.

The recently released “Global Status of CCS: 2013” report by the Global CCS Institute suggests there are currently 65 large-scale integrated CCS projects at some stage of development around the world, of which 12 are operational.4 Although the recommendations in the report focus on deployment of demonstration projects, improved policy support, dealing with regulatory uncertainty, the need for strong funding sup-port, and the development of transport infrastructure—public support for CCS remains a critical factor for attainment of any of these goals. To that end, over the past few years there has been a concerted effort to document the experiences arising from CCS projects in relation to public perception and accep-tance. Drawing from those case studies and a range of social science research, this article suggests a number of factors that should be considered by CCS developers to engage collab-oratively with potential host communities to help overcome opposition.

Overcoming Opposition to CCS through Developer–Community Collaboration

sOcIETy & cUlTURE

“Community opposition is a

challenge that will need to be

overcome if there is to be ongoing

deployment of commercial CCS

projects in the future.”

Advancing CCS projects requires effective collaboration with the local community.

66

DEFInIng cOllABORATIOn

It is worth defining what is meant by collaboration and why it might be important in the context of CCS deployment. In its most basic form, collaboration has been defined as

working with each other to do a task to achieve shared goals. It is a recursive process where two or more peo-ple or organisations work together to realise shared goals, for example, an endeavour that is creative in nature—by sharing knowledge, learning and building consensus.5

This definition not only highlights the importance of work-ing together, it recognizes the importance of identifying the potential for developing shared goals and potential community- specific issues to be addressed. It also recognizes that the process is not a one-off linear process but one that requires multiple iterations over time. Such attributes are critical for developing meaningful partnerships to allay concerns, partic-ularly when working with communities to deploy new energy technologies such as CCS, but apply equally to other technolo-gies like wind, geothermal, and nuclear.

FAcTORs TO EnHAncE PROJEcT DEPlOyMEnT

Recently, the international comparative case study conducted by Ashworth et al. examined the communication and outreach activities of five CCS projects across the U.S., Australia, and the Netherlands.6 The researchers found there were five critical success factors that, if present, seemed to contribute to suc-cessful project deployment:

1. Extent to which key government and project team mem-bers are aligned

2. Deployment of communications experts as part of the project team from the outset

3. Consideration of the social context 4. Degree of flexibility in the project5. Competition involving community self-selection

Some of these are explored below.

Alignment of governments across scales

Time and time again it has been demonstrated that having all levels of government—national, state, and local—positively aligned with the project is important when it comes to the deployment of energy technologies. Without such alignment it has become evident that projects are unlikely to proceed. More recently, this has been witnessed with public opposi-tion to wind, unconventional gas, and even nuclear energy. It is important that project developers take the time to develop this alignment across governments before progressing too far into engaging with communities. When such alignment is lack-ing, it is much easier for opponents to find an ally within one of the government levels and therefore slow down the project deployment or even have it stopped altogether.

communications Experts as Part of the Project Team

In addition to utilizing credible communicators, including experts, studying successful project case studies revealed that such projects enmeshed the communications experts as part of the core project team. They also ensured that com-munications was seen as an integral part of the project, with a communication plan developed and designed from the out-set. Enabling such integration across a team helps to identify potential areas of weakness in the deployment plan while building greater cohesion among the project team, rather than tacking on communications at the end.

sOcIETy & cUlTURE

Effectively communicating with community stakeholders can help dissuade misconceptions about CCS projects.


Importance of social context

The social context in which a project operates has also been deemed important for successful project deployment. What has transpired previously within a community—its history—combined with cultural and economic context helps shape the opinions of those that live and work within the community. These factors, combined with any current issues, frame how a proposed project will be received. Understanding the social context is some-thing that was often overlooked by earlier projects. However, the work of Wade and Greenberg7 identified that if time and effort were invested in characterizing the social conditions, as much as the technical and geological characteristics, it is likely that projects would be more easily deployed over time. Developing knowledge of the social context helps project developers to more ably identify potential community-specific issues to be addressed in order to begin the process of true collaboration.

Degree of Flexibility

Having some degree of flexibility in a project can also be essential to its success. Flexibility can be defined in many ways, but a key component is having enough flexibility in the project to be able to take into account different community needs as concerns are raised. For example, a project may be having difficulty with certain stakeholders. Because of stake-holder uncertainty it may be deemed too risky to move to the next stage. Project communicators and other project experts will have to make themselves available to deal with concerns being raised and, if necessary, delay the project till their

concerns are overcome or met in some way.

FAcTORs TO EnHAncE cOllABORATIOn

Procedural Justice

To understand what is important to communities and stake-holders that may be affected by development of a new CCS project, the early work conducted by three U.S. Department of Energy’s (DOE’s) Regional Carbon Sequestration Partnerships is particularly relevant. Working across five communities, the researchers set out to understand community perspectives of CCS. Bradbury et al.8 found that many of the concerns raised by participants were directly related to issues of procedural justice. For example, participants wanted to know whether the process of deployment would be fair, whether they could have a say in the process, and if anyone would listen to their concerns. More specifically, participants expressed a desire to have one point of contact if anything went wrong and to further understand what benefits they might expect from the project. There was also a concern in relation to whom the project developers were, what their preceding reputation had been, and if the project developer along with government could be trusted to manage the project to ensure nobody or nothing would be harmed. Ultimately, could they trust the project developers to take care of their needs and those of the wider community?

Trusting Relationships

Trust is often raised in the context of new projects, particu-larly when there may be some uncertainty or perceived risk about the project, as is the case with the early deployment of CCS. Trust is fundamental for any successful relationship, personal or professional. From the perspective of developing a new project, organizations must take into account a number of considerations in order to establish relationships of trust between the community and the developer. Terwel9 and col-leagues have spent several years researching the topic of trust and ways to improve organizational trust within the communi-ties in which they operate. Their research demonstrated that an organization’s perceived competence and integrity will impact on how it is viewed within a community which, in turn, will affect how CCS is viewed. For example, their experiments showed that people tended to be more positive toward CCS when they trusted the organization to be highly competent. Linked to building competence is the use of a credible expert to communicate information about the project in an unbiased and easy-to-understand manner. Experts will be judged not only on their expertise, knowledge, and ability to be accurate, but also their perceived motivation to be truthful.10 If these attributes are perceived to be present, this will increase overall trust in the messages being communicated about the project.

The project developers and communication team must be viewed as trustworthy by the community.

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BRIngIng IT All TOgETHER

Many of the key points outlined above are not innovative in relation to new project requirements—they really constitute the underpinnings of any respectful relationship. However, from the number of projects that have failed or are indefinitely stalled, it seems that project developers often overlook the important factors mentioned above: in particular, attending to the issues of procedural justice and developing trust that can help to improve collaboration with affected stakeholders. Ensuring activities are not just one off and allowing community stakeholders the opportunity to provide input and respond to the information being offered to them is particularly important if project developers are committed to collabo-rating. Concurrently, project developers can also respond, provide more information, and demonstrate some flexibility in their project delivery to respond and adapt to stakeholder demands. Such a process assists to develop a working rela-tionship that moves toward real collaboration. However, although meaningful collaboration with communities for CCS deployment will enhance the likelihood of effective deploy-ment, each project will be different, and therefore it remains critical for CCS project developers to be attentive to the needs of the communities in which they are operating.

REFEREncEs

1. IPCC, Climate Change 2013: The Physical Science Basis, Working Group 1 Contribution to the Fifth Assessment Report of the In-

sOcIETy & cUlTURE

tergovernmental Panel on Climate Change, 2013, www.ipcc.ch/report/ar5/wg1/#.UnBUu_lOO3Y

2. UN Framework Convention on Climate Change, Report of the Conference of the Parties on its Fifteenth Session, Held in Co-penhagen from 7 to 19 December 2009, Addendum. Part Two: Action Taken by the Conference of the Parties at its Fifteenth Session. FCCC/CP/2009/11/Add.1, United Nations Office at Ge-neva, Switzerland, 2009.

3. J. Rogelj, D.L. McCollum, A. Reisinger, M. Meainshausen, K. Ri-ahi, Probabilistic Cost Estimates for Climate Change Mitigation, Nature, 2013, 493 (7430), 79–83.

4. Global CCS Institute, The Global Status of CCS: 2013, 2013, www.globalccsinstitute.com/publications/global-status-ccs-2013

5. Collaboration, en.wikipedia.org/wiki/Collaboration, (accessed 10 October 2013).

6. P. Ashworth, J. Bradbury, S. Wade, C.F.J. Ynke Feenstra, S. Green-berg, G., Hund, T. Mikunda, What’s in Store: Lessons from Imple-menting CCS, Int. J. Greenhouse Gas Control, 2012, 9, 402–409.

7. S. Wade, S. Greenberg, Afraid to Start Because the Outcome is Uncertain? Social Site Characterisation as a Tool for Informing Public Engagement Efforts, Energy Procedia, 2008, 1 (1), 4641–4647.

8. J. Bradbury, I. Ray, T. Peterson, S. Wade, G. Wong-Parodi, A. Feld-pausch, The Role of Social Factors in Shaping Public Perceptions of CCS: Results of Multi-State Focus Group Interviews in the U.S., Energy Procedia, 2009, 1, 4665–4672.

9. B. Terwel, F. Harnick, N. Ellemers, D. Daamen, Going Beyond the Properties of CO2 Capture and Storage (CCS) Technology: How Trust in Stakeholders Affects Public Acceptance of CCS, Int. J. Greenhouse Gas Control, 2011, 5 (2), 181–188.

10. S. Fiske, Motivated Audiences: Belief and Attitude Formation about Science Topics, Princeton Institute for International and Regional Studies Seminar on Communicating Uncertainty: Sci-ence, Institutions, and Ethics in the Politics of Global Climate Change, 2 October 2013, webshare.princeton.edu/users/piirs/pdf/RCU%20Fiske%2010-3-13.pdf

status of High-Efficiency coal-Fired Power Plants

CCS and increasing power plant efficiency go hand in hand. The current average global efficiency of coal-fired power plants is approximately 33%, but plants can

be built to operate at much higher efficiencies using readily available technologies. In fact, ultra-supercritical plants are commercially available today and can operate at efficiencies of 45%, which reduce CO2 emissions by ~25% compared to plants operating at the global average. The world’s most efficient coal-fired power plant is the 400-MWe Unit 3 at Nordjylland Power Station (near Allborg, Denmark), owned by Vattenfall, which operates at almost 45% efficiency (HHV).

Research is ongoing in several countries to develop advanced ultra-supercritical (AUSC) power plants, which may result in coal-fired power plants with efficiencies of greater than 50%, although the International Energy Agency Clean Coal Centre projects that commercial AUSC plant deployment won’t occur until 2031. Because CCS has yet to be deployed at the

commercial scale, improving energy efficiency is a low-hanging fruit that can immediately reduce CO2 emissions while prepar-ing plants for the efficiency loss from the application of CCS.

Nordjylland Power StationPhoto: Jacob Hylling Poulsen


global

The UN Climate Change Conference was held in Warsaw, Poland. See the article on page 13 for details.

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Movers & Shakers

Anglo American was recognized for leadership in climate change performance by the Carbon Disclosure Project 2013.

CONSOL Energy has entered into an agreement to sell all five of its West Virginia longwall mines to a subsidiary of Murray Energy.

Orica Limited recently announced that Nick Bowen will be joining the company as the Executive Global Head Mining Services.

Peabody Energy has announced that Executive Vice Presi-dent Eric Ford will retire as of 31 January 2014.

International Outlook

china

The China National Coal Association (CNCA) recently an-nounced that China’s annual coal consumption is expected to reach 4.8 billion tonnes by 2020. Liang Jiakun, CNCA Vice President, said the coal industry still has growth potential as coal remains a principal energy source that cur-rently accounts for more than 60% of the country’s primary energy. Even so, the coal industry faces increasing challenges as China is placing a greater emphasis on environmental protection and economic restructuring and transforming economic growth patterns. China has been accelerating efforts to restructure the coal industry by shutting down small coal mines, with the total number of mines reduced from 24,800 in 2005 to 14,000 in 2012.

United kingdom

The Confederation of UK Coal Producers (CoalPro) released a new press release that renewed its calls to recognize the large role coal plays in the UK’s energy mix; nearly 40% of UK electricity was coal-fueled in 2012.

United states

The U.S. government announced that it will restrict funding for coal-fired power plants abroad. In the world’s most impov-erished countries, the U.S. will support funding for coal-fired power plants if there are no other efficient or economical al-ternatives. For less impoverished countries, carbon capture is a requirement to obtain U.S. funding for coal-fired power plants.

Corrigendum: Issue 3, pages 36 and 37, corrections are noted with red text:

Page 36: SNG production has been limited to North Dakota up to now, with 4.4 Mm3/day capacity. Coal-to-SNG units are being constructed in Korea (1.9 Mm3/day) and in China (with four units totaling 86 Mm3/day capacity all of which are complete or nearly complete). India is active as well, with a coal gasification plant to be operational in 2013 to replace imported natural gas.

Page 37: These investments in production units are comple-mented with important supporting capital expenditures, such as a new CTL devoted catalyst production facility with an annual 48,000 tons capacity (12,000 tons in phase 1, under construction) and the pre-approved Xinjiang-Guangdong-Zhejianga pipeline crossing China from west to east for transporting SNG with an 82 Mm3/day capacity.

Recent Select Publications

Climate Change 2013: The Physical Science Basis – Working Group 1 of the UN Intergovernmental Panel on Climate Change – The Fifth Assessment Report proposed a carbon budget to meet the International Energy Agency’s 2°C Scenario; at current rates the budget will be exhausted in the next 30 years.

Southeast Asia Energy Outlook – IEA – This report projected that energy demand will increase by at least 80% by 2035 and that coal would be the fuel behind much of this growth.

The Global Status of CCS: 2013 – GCCSI – This report provides the status of CCS projects globally. For more infor-mation see the cover story on page 4.

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Conference Name Dates Location Website

Coaltrans UK Feb. 5–7 London, U.K. www.coaltrans.com/ EventDetails/0/6630/Coaltrans-UK.html

World CTX 2014 Mar. 25–28 Beijing, China www.worldctx.com

Power-Gen India & Central Asia May 5–7 New Delhi, India www.power-genindia.com

Clearwater Clean Coal Conference Jun. 1–5 Clearwater, FL, U.S. www.coaltechnologies.com

Power-Gen Europe Jun. 3–5 Cologne, Germany www.powergeneurope.com

Coal-Gen Aug. 20–22 Nashville, TN, U.S. www.coal-gen.com/index.html

International Pittsburgh Coal Conference Oct. 6–9 Pittsburgh, PA, U.S. www.engineering.pitt.edu/pcc

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Key Meetings & Conferences

Globally there are numerous conferences and meetings geared toward the coal and energy industries. The table below highlights a few such events. If you would like your event listed in Cornerstone, please contact the Executive Editor at [email protected]

There are several Coaltrans conferences globally each year. To learn more, visit www.coaltrans.com/calendar.aspx

inaugural WCA Leadership & Excellence Awards 2013 at an awards ceremony on 18 November. The awards were launched to recognize outstanding achievement and inno-vation in the international coal industry and its value chain, with the aim to help drive further environmental and safety improvements and innovation across the industry.

The winners were chosen from a list of quality applications from companies and organizations working in the field of coal mining, coal use, or coal technologies, including non-WCA members and companies not producing coal.

The winning entries worked to enhance safety performance, reduce environmental impacts, manage water, worked along-side local communities, and looked to a future where technol-ogies can reduce emissions from the use of coal to near zero.

Poland’s Deputy Prime Minister and Minister of Economy, Janusz Piechociński, also attended the awards ceremony, giving a speech and presenting a special award to a Polish mining equipment company FAMUR. This award was given in recognition of their contribution to promoting excellence in the coal industry in Poland.

Further information on the WCA Leadership & Excellence Awards can be found at: www.worldcoal.org/awards2013. The winning projects are highlighted on the following pages.

Polish Ministry of Economy, Warsaw, Poland

From the WCA

Alpha Natural Resources, one of the world’s largest suppli-ers of coal, joined the WCA as a new member. In addition, the WCA has also welcomed the Queensland Resources Council (QRC), a non-profit industry association in Australia, as its newest Associate Member.

Winners of Inaugural WcA leadership & Excellence Awards Announced

At the recent International Coal & Climate Summit in Warsaw, hosted at the Polish Ministry of Economy, the World Coal Association announced the winners of the


Mining is a water intensive indus-try and coal is often found in regions of the world where

water is scarce. As with all resource extraction, coal mining tends to be clus-tered around resource rich areas, such as the Mpumalanga Highveld in South Africa. In this area, mining and agricul-ture are the largest users and compete for water resources.

Mining influences not only the amount of surface and groundwater available for other users, but also impacts water chemistry. eMalahleni, Mpumalanga, is one of the fastest growing urban areas in South Africa. It is a municipality of 510,000 people in a water-stressed region in the northeast of the country and has faced considerable difficulties in meeting increased demand for drink-ing water.

Research has shown that in the Mpumalanga Highveld, more water is stored in underground mines than in the three surface dams that feed the area and these underground stores do not evaporate. As a result, what was formerly a liability is now regarded as a significant untapped resource.

Anglo American has invested almost US$100 million in a water reclamation plant to treat underground water from its mining operations in the Witbank coalfield. The plant currently treats 25–30 million liters a day. Some of this is used in its mining operations but the bulk of it supplies 12% of the city’s daily water needs.

In July 2011, the company approved investment to increase treatment capacity to 50 million liters a day, with a peak capacity of 60 million liters a day. This second phase should be opera-tional before the end of 2013. To date, the water reclamation plant has treated 30 billion liters of water and supplied 22 billion liters to the eMalahleni Local Municipality.

The second phase has been designed to manage water from five coal mines, some of which have reached the end of their lives. This includes mines owned by a competitor company. Anglo American Thermal Coal is moving beyond seeking solutions purely for its own mines—the goal is a holistic way of dealing with the water problems of the entire region.

Ten years of research and working with various partners has also resulted in the plant moving towards being a near-zero waste facility. Besides the plant having an >99% water recovery and very low

brine volumes, the 200 tons of gyp-sum by-product that is produced daily at the plant can be turned into a low-cost, high-quality construction material. Following rigorous testing and approval, it has been used to construct 66 afford-able houses for local Anglo American employees, with an additional 300 houses currently under construc-tion. In addition, the plant offers an opportunity to further stimulate local employment through the establish-ment of a community-based enterprise that will manufacture and distribute these gypsum-based products to local builders. The remainder of the gypsum not used in this process is now sold to the cement and agricultural industries, eliminating solid waste disposal at the plant.

The project is replicable—and is being evaluated as a water treatment solution by six of Anglo American’s ten Thermal Coal operations. It has already been replicated by a private mining company, Optimum Coal Holdings, who commis-sioned a 15 million liters a day plant in June 2010 to the east of eMalahleni. Four other projects in the Witbank coal-fields are in various stages of project development based on the same model as the eMalahleni plant.

www.angloamerican.com

Excellence in Environmental PracticeCompany: Anglo American Thermal CoalProject: eMalahleni Water Reclamation Project, South Africa

World Coal AssociationLeadership & Excellence Awards 2013


Winner

2013

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Alstom has created a portfolio of sustainable technologies to drive reductions in emissions from

electricity generation, including coal-fired generation. Data from 2002–2011 shows that Alstom’s environmental measures, on new plants and retrofits, have saved a total of 207 million tonnes of CO2 annually. This covers 1445 proj-ects undertaken by Alstom in all areas of energy, comparing actual emissions of an Alstom plant in the first year of its operation to the standard emissions of the local plant type that it replaces.

Alstom has taken two approaches to reduce the amount of coal burnt per kWh:

• Increasing the efficiency by upgrad-ing temperatures and pressures in advanced boilers and steam tur-bines

• Developing the co-combustion of coal with biomass.

The state of the art in efficiency is exemplified by the Rheinhafen Dampf-kraftwerk 8 (RDK 8) in Karlsruhe, Germany. RDK 8 is one of the first bituminous-fired power plants in the world that will run on ultra-supercritical steam parameters of 600°C/620°C and 275 bar. The efficiency of this 912-MW power station, a turnkey project com-missioned in 2012, reaches more than 46% and 58% if district heating is con-sidered. Burning less coal, RDK 8 also

produces 40% less CO2 emissions than a coal-fired power plant built in the 1980s.

The state of the art in co-firing of bio-mass with coal is shown by the Drax power station in the UK. A system designed to burn biomass in each of the six 660-MW units provides 10% of the electricity produced by the plant, leading to a reduction of two million tons per year in the emission of CO2 and making Drax the single largest renew-ables installation in the UK.

Alstom has pursued a vast R&D program in CO2 capture technologies, following two paths: post-combustion capture and oxy-fuel combustion. Three pilot plants operating the Chilled Ammonia post-combustion process have com-pleted their tests: Karlshamn in Sweden and WE Energy in the U.S., both with 5 MW, and AEP Mountaineer in the U.S., with 58 MW. A pilot plant with 2 MW using the Advanced Amines process has completed tests at Dow Chemical in the U.S.

Following pilot tests, a project to develop an oxy-fuel power and carbon capture and storage demonstration of up to 450 MWe has been announced by Alstom, Drax, and BOC. The proposal, named the White Rose Carbon Capture and Storage Project, is seeking funding from the UK Department of Energy and Climate Change and from the European NER 300 program. It will also have the potential to co-fire biomass. Playing an important role in establishing a CO2

transportation and storage network in the UK Yorkshire area, it will generate low-carbon electricity to supply over 630,000 households, while capturing approximately 90% of all CO2 emissions produced by the plant. The CO2 will be transported through the National Grid’s pipeline for storage in the North Sea.

Alstom is also focusing on second gen-eration capture processes, in particular Chemical Looping Combustion, which has a much lower energy penalty than the first generation processes. It is being tested in a 3-MWth pilot plant at Alstom in the U.S., funded by the US DOE, and in another of 1 MWth in Darmstadt, Germany, partially funded by the EU Research Fund for Coal and Steel.

Alstom has the largest portfolio of Air Quality Control Systems, tackling par-ticulate emissions, SOx and NOx and mercury. Reductions of more than 90% for NOx and 99% for SO2 have been achieved. Large amounts of water demanded by thermal power plants are also becoming a serious concern. Alstom is building the two largest air-cooled coal power plants in the world: Kusile and Medupi, in South Africa, with twelve 800-MW supercritical turbine islands with air-cooled condensers. Removing more than 90% of the sul-fur oxide generated in the boilers with an Alstom wet flue gas desulfurisation system, these power stations will be the most environmentally friendly in sub-Saharan Africa.

www.alstom.com/power/

Excellence in Low-carbon TechnologiesCompany: AlstomProject: Driving Reductions in CO2 whilst Meeting Essential

Production Capacity Needs, Global



Winner

2013

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Over recent years, GE has pion-eered an effort to significantly improve IGCC project econom-

ics by focusing on improving the plant availability and reliability in the early years of operation. This crucial window of time is commonly referred to as the “time to maturity” and is defined as the time between commissioning to stable operation. Duke Energy’s Edwardsport IGCC Power Plant (618 MWe of net power in a two-Radiant Syngas Cooler train configuration) is GE’s latest and possibly the most complex coal power

plant in the world today.

The plant combines multiple advanced technologies including air separation, gasification, acid gas removal, sulfur recovery, CO2 compression, combined cycle power generation and includes several system improvements in com-parison to previously launched RCSs as well as integration to increase plant reliability.

The IGCC plant achieved a number of start-up milestones:

• The plant produced clean syngas within five minutes and met gas tur-bine fuel specifications on the first gasifier light-off attempt.

• By the third start-up attempt, the plant made power from the gas tur-bines fueled on clean syngas.

• Within three weeks of the initial start-up, the plant achieved full IGCC mode on its first attempt.

• Both gasification trains and gas tur-bines successfully ran in unison on the first attempt.

• On 7 June 2013, the customer declared “Commercial Operation.”

This early success means the site is well on the way to meeting the goal of reaching mature plant availability as originally orchestrated. The project is a combination of several advanced coal-to-power technologies which reduce environmental impact and also provide shorter time-to-maturity of power plant operation due to system improvements and integration.

www.ge.com

Leadership on Innovative Coal TechnologiesCompany: GE Power & Water, GasificationProject: Duke Energy Edwardsport IGCC Power Plant: System

Improvements and Integration for Reliability, USA



Winner

2013

74

The Shenhua Group is the largest coal producer in China, producing 460 million tonnes in 2012–13%

of total coal production in China. The Shenhua Group has 64 coal mines—these include mines with capacities over 10 Mtpa and mines with capaci-ties of 0.6 Mtpa. There are mines with good safety conditions and mines with hazardous risks of gas, floods, and spon-taneous combustion. Shenhua operates coal mines with high coal-seam thick-ness over seven meters and mines with low coal-seams of 0.9 meters.

Since the conditions vary significantly, it is difficult to control the risks. Shenhua took a number of steps to improve safety performance, including establishing a modern safety management philoso-phy and corporate culture, actively exploring and applying a Coalmine Risk Pre-control Management System, raising investment on safe produc-tion and technological innovation, and training employees to improve their competence.

Shenhua put forward its modern safety management philosophy to foster a bal-anced corporate culture on safety. In

2007, Shenhua launched the ‘Theory on Internal and External Factors to Cause an Accident’. Shenhua established and optimised a complete risk pre-control management system/safety manage-ment model. This model is based on identifying sources of danger and assessing risks.

The key in the system is to find the unsafe behavior and take measures to pre-control it.

Meanwhile, a system on intrinsically safe production was developed. With this system, any accident can be pre-vented and controlled, a new pathway to build a safe, modern, efficient coal mine is explored, a competent team is formed and the culture in safety is fos-tered at Shenhua.

Shenhua increased investment in safety, including production and management techniques. In the past three years, Shenhua’s investment on safety at coal mines grew by 35% annually. In 2012, the investment in coal mine safety was over RMB 5.412 billion (US$872.9 million).

With such efforts, the safety perfor-mance at Shenhua’s coal mines has been improving. In 2012, 45 coal mines at Shenhua realised a continuous run-ning of 1000 days without accident, 23 coal mines have 2000 days, and six coal mines have a safe running of 3000 days.

Employees are trained to improve their

safety competence in operating equip-ment. In 2012, the training on safety at Shenhua was 285,800 man-hours. This level of training has meant that unsafe behavior is avoided and people’s aware-ness of safety is improved. Shenhua’s practice on safety is proven to be suc-cessful and the safety performance in production is among the best in the world. From 2005 to 2012, the accumu-lated coal production at Shenhua was 2.7 billion tonnes, while the fatality rate per million tonnes was 0.02, lower than the average of other major coal produc-ing countries (the average in the U.S. in 2011 was 0.04).

In 2012, the fatality rate at the Shenhua Group was 0.0034, the best record in Shenhua’s history. Shenhua created a record of 0 fatalities when 370 mil-lion tonnes of coal were consecutively produced.

Based on the Shenhua Group’s experi-ence with the coal mine risk pre-control management system, the Management Standards on Coalmine’s Intrinsic Safety (Standards No. AQ/T1093-2011) was published and it became the first stan-dard on safety management for the coal industry in China. Shenhua’s practice on safety is promoted and applied, which leads to better safety standards in the coal industry in China; the fatality rate nationwide per million tonnes of coal decreased from 2.69 in 2005 to 0.374 in 2012.

www.shenhuagroup.com.cn/english

Leadership on Mining SafetyCompany: Shenhua GroupProject: Coal Mining Safety Practice, China



Winner

2013

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vOlUME 1 AUTHOR InDEX

Author(s) Title Page(s)

Volume 1, Issue 1, Spring 2013Zhang Xiwu Preface to the Inaugural Issue of Cornerstone 1–2Gu Dazhao Engagement to Support the Critical Importance of Coal 3Fatih Birol Coal’s Role in the Global Energy Mix: Treading Water or Full Steam Ahead? 6–9Fred Palmer Social Development Through Coal Energy 10–11Armond Cohen Mission Possible: An Environmentalist Looks at Coal and Climate 12–14

Robert Beck How the Energy Policy of the United States Is Keeping New Coal-Fired Power Plants at a Standstill 15–18

Huang Qili The Development Strategy for Coal-Fired Power Generation in China 19–23Li Xing, Chen Junqi China’s Changing Energy Mix: An Interview with Fan Bi 24–26Aleksandra Tomczak Minamata Convention on Mercury – What Does It Mean for Coal? 27–30Roger Bezdek U.S. Energy Subsidies in Perspective 31–36Edward Rubin Climate Change, Technology Innovation, and the Future of Coal 37–43Howard Herzog, Jan Eide Rethinking CCS – Moving Forward in Times of Uncertainty 44–50

Robert Williams Coal/Biomass Coprocessing Strategy to Enable a Thriving Coal Industry in a Carbon-Constrained World 51–59

Chen Yinbiao Clean and High-Efficiency Coal-Fired Power Generation in the Shenhua Group 60–64

Volume 1, Issue 2, Summer 2013Gregory Boyce Fueling the Future with 21st Century Coal 4–10

Xie Heping, Liu Hong, Wu Gang China’s Coal Industry Must Follow the Path of Sustainable Production Capacity 11–15

Robin Batterham The Critical Importance of Innovation for the Future of Coal 16–19Nicholas Newman The Challenges of European Energy Infrastructure Finance 20–23

Li Xing, Chen Junqi Pollution Control of Coal-Fired Power Generation in China: An Exclusive Interview with Wang Zhixuan 24–28

Benjamin Sporton The Rio Summit: Waking Up to the Three Pillars of Global Poverty, Energy Access, and Coal 29–32

Nancy Lamontagne What Will New U.S. DOE Leadership Mean for Energy? 33–36Geoff Giordano Profile of Gina McCarthy 37–41Nikki Fisher Healthy Business 42–44

Les Deman North American Shale Gas Production: A Bright Dawn for the Global Energy Trade or a Gloomy Monday? 45–49

Emily Medine Relationship between U.S. and International Coal Pricing 50–53

Robert Williams Toward Market Launch of Coal/Biomass Coproduction Technologies with CCS 54–60

Gu Dazhao Water Resource Protection Technology for Coal Mining in Western China 61–65Lesley Sloss Unblotting the Landscape 66–69Holly Krutka, Li Jingfeng Case Studies of Successfully Reclaimed Mining Sites 70–74

76

Author(s) Title Page(s)

Volume 1, Issue 3, Autumn 2013

Zhang Yuzhuo Clean Coal Conversion: Road to Clean and Efficient Utilization of Coal Resources in China 4–10

Benjamin Sporton The World Bank Decision on Coal Funding Must Be Made to Work 11–14

Nikki Williams Energy Literacy: Why Telling the Story of Coal in Australia Is Important to Its Long-Term Success 15–19

Robin Batterham Winning Public Support for the Future of Coal 20–23Nicholas Newman German Federal Energy Policy: Party Platforms 24–27Hubertus Bardt, Jennifer Striebeck The Future of Lignite in European and German Energy Policies 28–31Serge Perineau Coal Conversion to Higher Value Hydrocarbons: A Tangible Acceleration 32–37Han Yue, Dong Juan, Chi Dongxun Energy Players in the 2013 Fortune Global 500 38–40Daniel Gros, Jonas Teusch Does Coal Have a Long-Term Future in Europe? 41–43Shu Geping Shenhua’s DCL Project: Technical Innovation and Latest Developments 44–48Weng Li, Men Zhuowu, Bu Yifeng The Momentum of Chinese-Derived Indirect Coal-to-Liquids Technologies 49–53

Holly Krutka What Would It Take for an Environmental NGO to Accept CTL: An Exclusive Interview with Brad Crabtree from the Great Plains Institute 54–56

Cy Butner, Elaine Cullen, Charles Fairhurst, Elizabeth Eide Emerging Workforce Issues for the U.S. Energy and Mining Industries 57–63

Gwenne Henricks Caterpillar’s Approach to the U.S. STEM Workforce Gap 64–66

Volume 1, Issue 4, Winter 2013

Geoff Giordano Carbon Capture and Storage Advancement Is Urgent: An Exclusive Interview with Brad Page, Head of the GCCSI 4–8

Wojciech Kość COP19: The Cobblestone Road to Paris 9–12Milton Catelin Review of the International Coal & Climate Summit 13–16

Brad Wall Keeping Coal Alive on the Canadian Prairies: Carbon Capture and Storage at Work in Saskatchewan 17–20

Kurt Walzer, Pam Hardwicke, John Thompson

Beyond Roadmaps to Deployment: Ensuring CCS Is a Component of Mid-century CO2 Emissions Control 21–26

Nicholas Newman Implications of EU ETS Reform Proposals 27–30Ben Yamagata A Roadmap for the Advancement of Low-Emissions Coal Technologies 31–35

Vello Kuuskraa, Phil DiPietro CO2 Enhanced Oil Recovery: The Enabling Technology for CO2 Capture and Storage 36–41

Ren Xiangkun, Zhang Dongjie, Zhang Jun

China’s Policies for Addressing Climate Change and Efforts to Develop CCUS Technology 42–47

Ligang Zheng, Yewen Tan Overview of Oxy-fuel Combustion Technology for CO2 Capture 48–52Magnus Mörtberg Alstom’s CCS Technologies 53–59Wu Xiuzhang Shenhua Group’s Carbon Capture and Storage Demonstration 60–64

Peta Ashworth Overcoming Opposition to CCS through Developer–Community Collaboration 65–68

vOlUME 1 AUTHOR InDEX

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