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Carbon Capture and Storage
CCS Supply Chain Capacity Constraints
Chris Hendriks; Pieter van Breevoort, Joris Koornneef and Alexander Hulsman, Paul Noothout, Erika de Visser (Ecofys), Mohammed Abuzahra, John Gale (IEAGHG)
23 May 2011
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“Prediction is very difficult, especially about the future.“
Attributed to Niels Bohr / Mark Twain
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Consequences of supply constraints
Delayed deployment Higher prices
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Examples of supply chain constraints
Solar panel price increase in 2006-2008 Pigment colour (Japan) Rare Earth element (e.g. neodymium) Coal-fired power plants (China)
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The ETP BLUE Map Scenario
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Projects in the CCS Roadmap by 2050
Total number of installations is 3,400
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IEA Roadmap - developments of CCS in the power sector
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Development of coal-fired power capacity in the BLUE Map scenario
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Volume of oil/NG versus CO2
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Methodology
Identify ‘long-list’ main components (equipment & materials and service & skills) required for CCS operations Restricted to currently known main technologies
Construct ‘short list’ of items with potential constraints Experts interviews, literature
Assess the required capacity needed per component Construction of ‘indicators’ to assess constraints
Quantify and qualify the indicators Provide overall risk assessment
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Five indicators
Annual market growth Supplier concentration Technological maturity Resource availability Exogenous demand
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Indicators and values
Annual market growth
Supplier concentration
Technological maturity
Resource availability
Exogenous demand
<1% Open market
Commercially proven High Driver
1% - 5% Oligopoly Demonstration phase Medium Neutral
>5% Monopoly R&D phase Low Barrier
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Visualisation: Spider Diagram
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Spider Diagram (2)
Technological maturityCommercially
Demonstration phase
R&D phase
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Spider Diagram (3)
Annual market growth for CCS
Supplier concentration
Technological maturityExogenous demand
Resource availability >5% annual growth
1-5% annual
<1% annual growth
Commercially
Demonstration phase
R&D phase
Abundant
Medium
Low
Barrier
Neutra
Driver
Monopoly
Oligopol
Open
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Interpretation of the indicators
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Assessment for solvents
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3Annual market growth for CCS
Supplier concentration
Technological maturityResource availability
Exogenous demand
Indicator Annual market growth for CCS
Supplier concentration
Technological maturity Resource availability
Exogenous demand
(3) <1% Open market Commercially proven High Driver
(2) 1-5% Oligopoly Demonstration phase Medium Neutral
(1) >5% Monopoly R&D phase Low Barrier
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Patents
Over 9,000 patents identified as relevant for post combustion capture
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Key message Solvent
Medium risk: high future demand for solvents and limitations in the flexibility of the market vertical supply chain integration and
interdependency Research is also still needed to optimise the solvents
of CO2 capture
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Pipelines: pipeline market
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Pipelines
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3Annual market growth for CCS
Supplier concentration
Technological maturityResource availability
Exogenous demand
Indicator Annual market growth for CCS
Supplier concentration
Technological maturity Resource availability
Exogenous demand
(3) <1% Open market Commercially proven High Driver
(2) 1-5% Oligopoly Demonstration phase Medium Neutral
(1) >5% Monopoly R&D phase Low Barrier
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Key message pipelines
Medium to high risk: Pipe laying capacity faces competition with the oil and
gas industry The current market for very large scale pipelines is small The scale and amount of pipelines needed for CCS may
temporarily fill order books of pipeline laying companies and increase prices. This can result in major delays in pipeline projects
Pipeline laying and manufacturing for CCS is mature
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Technical personnel
Assessing storage sites will be labour intensive and requires skilled engineers
Experienced personnel will retire soon, but seniors are important
High competition from oil and gas sector
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Key messages Technical personnel
Individual reservoirs have to be assessed, drilled and monitored by, often experienced, geo-engineers and petroleum engineers
Shortages of technically skilled personnel are most likely to appear, particularly petroleum engineers and geo-engineers A substantial part of the workforce will retire in the
coming decade In Europe and the USA, the number of engineers that
graduate annually is insufficient to meet expected demand
CCS-activities will face severe competition with oil and gas extraction activities
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Main conclusions
For capture, supplier concentration is the main risk Meeting global demand for compressors and large
scale CO2 pipelines will be challenging task; long lead time and high upfront investment may impose constraints
Oil and gas extraction will compete severely with CCS activities
Supply constraints may be considerably less with strong policy commitments on CCS guaranteeing the market
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Summary
