hydrogen energy – challenges and opportunities
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Hydrogen Energy – Challenges and Opportunities
Lewis Castle College
September 2007Graeme Miller
The Stabilisation Wedge
Emission trajectory to achieve 500ppm
Emission trajectory BAU
Princeton wedges:technology options for GHG stabilization
1 GtC Slices of the Stabilisation Wedge
how big is a wedge?Examples of Lower Carbon Slices Scale for 1GtC Reduction by 2050
Increased energy efficiency across the economy
2 billion gasoline/diesel cars achieving 60 mpg
Fuel switching natural gas displacing coal for power
1400GW fuelled by natural gas instead of coal
Solar PV or Wind replaces coal for power
1000x scale up PV, 70x scale up for wind
Biofuels to replace petroleum based fuels
200x106 ha growing area (equals US agricultural land)
Carbon Capture and Geological Storage
CO2 captured from 700 1GW coal plants; storage = 3,500x In Salah/Sleipner or CCS applied to 5% of new power growth
Carbon Free Hydrogen for transport 1 billion H2 carbon free cars; H2 from fossil fuels with CO2 capture and storage or from renewables or nuclear
Nuclear displaces coal for power 700 1GW plants (2x current)
Biosequestration in forests and soil Increased planted area and/or reduce deforestation
2020 Base Case
the energy sector emissions challenge The power sector is already the largest contributor of CO2
Growth in coal-fired generation is projected to be the single largest contributor of new GHG emissions over the next fifteen years
CO2 Emissions By Sector
Source: IEA World Energy Outlook, 2004
2004
21%
41%38%
0%5%
10%15%20%25%30%35%40%45%
TransportPower Heat
2020
22%
44%
34%
TransportPower Heat
Power capacity up 48% to 5800GW
Overall Capacity
Gas increases 87% Coal increases 43% Oil increases 12%
Fossil Fuels
Nuclear stays flat
Hydro increases 29%
Renewables increase 234%
Low-Carbon
increasing suite of low carbon options are available Technological
advances will continue to close the existing gaps
Pricing carbon would dramatically shift this picture
As the R&A industry demonstrates capability, carbon-constrained policies likely to be more acceptable to policy-makers
Source: BP Estimates, Navigant Consulting
Levelised costs of electricity generation
Low/Zero carbon energy source
Renewable energy source
Fossil energy source
Cost
of
Ele
ctr
icit
y G
en
era
tion
9%
IR
R
($/M
Wh
)
0
25
50
75
100
125
150
175
200
225
CC
GT,
gas
$4
/mm
btu
Coal
$4
0/t
on
ne
Hyd
rog
en
Pow
er
Gas
Hyd
rog
en
Pow
er
Coal
Nu
cle
ar
On
sh
ore
W
ind
Off
sh
ore
W
ind
Bio
mass
Gasifi
cati
on
Wave /
Tid
al
Sola
r (R
eta
ilC
ost)
cost of CO2 mitigation (above today’s economics)
CO2 reduction options ($/te)
Source: European Commission Report (Jan 2004) , DoT, DTi (2003) , BP Analysis
CO
2 r
educt
ion c
ost
s ($
/tC
O2)
Power Generation
(Fixed Sources)
Transport
(Mobile)
0
200
400
600
800
1000
1200
1400
1600
OnshoreWind
Hydrogenfor Power
(C&S)
Nuclear OffshoreWind
Wave Solar PV HybridVehicles
Biofuels Hydrogenfor Tpt.
climate change – BP’s journey
19
97
19
98
19
99
20
00
BP acknowledges need for precautionary action to cut GHG emissions after exiting the Global Climate Coalition.
BP predicts $1 bn revenue in its solar business in 2007
BP sets target to cut emissions from operations to 10% below 1990 levels by 2010
BP begins funding the Carbon Mitigation Initiative at Princeton University, exploring solutions to climate change
BP initiates the CO2 Capture Project with other companies and governments, studying methods of capturing and storing carbon dioxide at power plants
BP’s solar business moves into profit and announces plans to double production. On track to meet 1997 revenue prediction
BP launches carbon dioxide capture and storage project at gas field in Algeria
BP announces plans for world’s first commercial hydrogen power station.
BP launches Alternative Energy
20
01
20
03
BP achieves its 2010 target 9 years early, having reduced GHG emissions by energy efficiency projects and cutting flaring of unwanted gas
Based on work at Princeton, BP sets out range of technology options to stabilize GHG emissions over 50 years, including increases in solar, wind, gas-fired power and carbon capture and storage
20
02
20
04
BP announces plans to build wind farm at Nerefco, Netherlands
20
05
the technology blocks are available today
Coal GASIFIER
WGSH2S & CO2
Removal
CO2
Compression
H2 GT HRSG ST Power
CO2 Storage
Coal Handlin
g
SRU
ASU
Pipeline
SLAG Handlin
g
IGCC plant with CCS
Gas REFORMER
WGSH2S & CO2
Removal
CO2
Compression
H2 GT HRSG ST Power
CO2 Storage
AIR
Pipeline
NGCC plant with CCS
Thus capturing and Storing the Carbon requires significant investment above conventional power plant
Capital costs. CCS adds a substantial amount of processing equipment upstream of the power generation block, approximately doubling the capital cost of plant
– Reforming or gasification
– Air Separation in the case of coal in IGCC
– Water gas shift
– Acid Gas removal (CO2 separation)
– CO2 compression
– Pipeline and injection
Operating costs. The increased plant complexity increases the manpower required to operate and maintain the plant, with consequent increase in operating and maintenance costs
Fuel costs. The extra processing units have a substantial net requirement for power, thereby reducing the net export power from the plant and consequently the overall thermal efficiency of the plant
Actual project costs appear to be significantly above some publicly quoted estimates
Source Estimate (cost per tonne of CO2 abated) ($2007)
Generic estimates
IPCC 35 - 80 for PC
23 - 80 for IGCC
McKinsey/Vattenfall (for 2030) 40
Project estimates
Statoil 96
BP c. 70-110
Notes:
• All estimates are against plant using same fuel without CCS. Costs per tonne would be likely to be higher (potentially more than double) if a coal plant with CCS were compared with CCGT without capture. The cost of abatement would depend on the gas price.
• Estimates exclude the value of EOR and other products e.g. steam sales. BP estimate allows $10/tCO2 for transport and storage.
• Statoil based on publicly quoted cost of €61/tCO2, assumed to be per tonne captured.
Source: Published data and BP estimates.
This is consistent with the pattern that has been observed for other technologies
Initial costs of FGD were higher (by a factor of at least 2 to 3) than earlier estimates
Costs of projects reduced towards originally estimated levels over a period of decades.
Similar patterns to that shown for FGD are found for, SCR, CCGT and LNG plant
Source: IEA
Such a trend for CCS would imply that a substantial premium over the carbon price will be required for some years
$/tCO2
Years
Carbon price
Cost of CCS
Cost of CCS can be supported by carbon
price alone from some time over the period
2020 to 2040?
Current required premium
over carbon price
Cost to 2030 assuming current spend
0
5
10
15
20
25
30
Europeanhealthcare
budget
Globalinvestment in
energyinfrastructure
US defencebudget
One percent ofOECD GDP
Global cost ofcommercialisingCCS (additionalto carbon price)
$ t
rillio
n (
20
07
)But….. The sums required are not large compared with benchmarks
Note: data is indicative only
DF1 – Peterhead, Scotland
technology elements
Uses proven reforming technology to manufacture syngas from CH4 (BP Trinidad)
Uses proven shift reaction to generate H2 and CO2
Uses proven amine capture technology to capture and remove CO2 (BP Algeria)
Hydrogen fired CCGT proven and warranted by vendors
Duplex steel well completions of Miller proven capable of handling Co2
Uses proven reforming technology to manufacture syngas from CH4 (BP Trinidad)
Uses proven shift reaction to generate H2 and CO2
Uses proven amine capture technology to capture and remove CO2 (BP Algeria)
Hydrogen fired CCGT proven and warranted by vendors
Duplex steel well completions of Miller proven capable of handling Co2
Proven Technology
SteamShift
ConversionCO2
CaptureCCGT
CH4
H2+CO H2+CO2
CO2
H2
Air
H2O
CatalyticReformer
Steam + H20
All technology proven at this scale around the world
‘UK Average’ Source: "Note on the UK Government’s Proposed Approach to allocation of EU ETS allowances to the Electricity Generating Industry (Incumbents) for Phase II", DTI March 2006.
876
723
430 404 368 343
43
491
0
100
200
300
400
500
600
700
800
900
gCO2 /kWh
net electricity generation
UK AverageCoal
UK AverageOil
UK GridElectricityAverage
E Class CCGT UK ProvenCCGT
Technology - FClass
Baglan Bay - HClass CCGT
Peterhead DF1
Generating Type
CO2 Emission Comparison for Reference Generating Plants
CO2 Captured
CO2 to atmosphere
comparison with other UK power
DF1 project specific benefits
Delivers as much power as the UK’s current wind farms generate
Generates 475 MW of base load low carbon power and will not require redundant systems in reserve
Stores 1.8 million tonnes of CO2 pa in the first UK re-use of a reservoir for CCS
50-60 mmbbls Enhanced Oil Recovery (EOR)
Creates 1000 direct engineering and construction jobs over the next 4 years and 150+ permanent skilled jobs
DF2 – Carson, California
DF2 Significance
Will generate 500MW of clean electricity.
Will generate enough clean electricity to power 325,000 Southern California homes.
Will capture 4 million tonnes per annum of CO2 – equivalent to removing 800,000 cars from the roads.
Will be the world’s largest hydrogen fired power generation facility in the world.
Use of petcoke potentially enabling clean coal technology and major change in US security of energy supply.
DF3 – Kwinana, Western Australia
some observations
• The world needs to move fast to address the climate change problem
• CCS will be an important part of the solution
• But costs are currently high relative to carbon prices, and likely to remain so
• Hundreds of billions of dollars of additional incentives may be required before CCS is commercial on the basis of the carbon price alone (as for other clean generation technologies)
• Some implications for the business
– This is going to be a major industry with many, many opportunities
– Governments and regulatory bodies are the customers for these projects: we need to give the customers what they want
– “Follow the money”: choice of projects will be largely determined by where there is a supportive policy and regulatory framework
– Cap and trade is only a small part of the story for at least the next ten years
Background Context
UK CO2 Sources
Total UK emissions c. 560 million tonnes (Mt) CO2
Emissions from industrial point sources = 283 Mt CO2
Of the 20 largest emitters, 17 are power plant, 3 are integrated steel plant and 1 is a refinery /petrochemicals plant
Emissions from 20 largest power stations = 132 Mt CO2
– If emissions from these could be reduced by 85-90%, UK emissions would be reduced by 18-20%
UK Storage sites
Oil fields
Gas fields
Gas/condensate fields
Saline-water-bearing reservoir rocks (saline aquifers)
Coal seams
EXISTING MARKETS
Alabama
ArizonaArkansas
California
Colorado
Connecticut
Delaw are
Florida
Georgia
Idaho
IllinoisIndiana
Iow a
KansasKentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Missouri
Montana
NebraskaNevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
W. Virginia
Wisconsin
Wyoming
North Dakota
Mississippi
McElmo Dome Sheep Mountain
Bravo Dome
Terrell, Puckett,M itchell, Grey Ranch
Plants
LaBarge
J ackson Dome
Great Plains Coal Plant
CURRENT CO2 SOURCES and PIPELINES
1561185 Ft/In
PETRA 12/1/99 10:10:02 AM
Permian BasinLouisiana/Mississippi
Canadian
Wyoming
US CO2 Markets
DF1 EOR Monitoring – CO2 Model
Storage model to provide assurance of long term storage integrity after site closure
CO2 storage model
– Covers full volume of potential migration
– Important physico-chemical processes for CO2 over thousands of years
– CO2 location, saturation, pressure, temperature from calibrated reservoir model
Kms of impervious rock impede vertical water flow (<5 cm per 1000 yrs)
rock types
Water flowvectors very few Cells with
>50m/My Upwards Water Flow
Mol Fraction CO2 in 2100
Lo Hi
Miller outlineat surface
4 km
U.K.U.K.
potential market for CCS 2005 to 2030
Source: IEA, DTI, BAH analysis
WorldWorld
Retrofit
New Capacity
Replacement
climate change problem - discussed for a long time
Event Date Years ago
Warming effect of gases in the atmosphere first recognised (Fourier)
1827 180
Measurement of radiative absorption of CO2 and water vapour, suggestion that ice ages due to changing greenhouse gas concentrations (Tyndall)
c.1860 150
Estimate that doubling of CO2 concentrations would lead to temperature rise of 5-6C (Arrhenius) - but serious objections from other scientist
1896 111
First estimates of warming due to fossil fuel burning – objections remained
c.1940 67
Beginning of measurements of CO2 concentration in Hawaii
1957 50
Detailed computer models showing resolution at regional level
Late 1970s
c.30
Increasingly wide range of observational and modelling evidence
1980s-date
0-25
Many people have commented on the issue over the years
"We would then have some right to indulge in the pleasant belief that our descendants, albeit after many generations, might live under a milder sky and in less barren surroundings than is our lot at present." Arrhenius (1896)
“Human beings are now carrying out a large scale geophysical experiment" Revelle and Seuss (1957)
“ scenarios suggests that warming would bring drier conditions to most of the US, across Europe and over the great grain growing regions of the USSR … And yet, no serious effort is being made to curtail the destruction of our dwindling reserves of tropical forest … or to require fossil-fuel power station to scrub carbon from the gases they release.” New Scientist magazine (1980)
“We will work to cut down the use of fossil fuels, a cause of … the greenhouse effect … No generation has a freehold on this earth. All we have is a life tenancy—with a full repairing lease”. Margaret Thatcher (1988)
A policy response has emerged slowly over the last 20 yearsEvent Date Years
ago
Increasing expressions of concern by politicians of wide ranging political views
Mid-Late
1980s
c.20-25
IPCC established (First Assessment Report published two years later)
1988 19
EU discusses carbon/energy tax equivalent to $10/bbl oil
1990-1995
c.15
UNFCCC (Rio convention) 1992 15
Kyoto Protocol agreed 1997 10
EU ETS Directive enters into force 2003 4
EU ETS begins 2005 2
carbon emissions per year
1950 2000
2050
0
14
7
Billion of Tonnes ofCarbon Emittedper Year
Historicalemissions
StabilizationTriangle
Flat path
At LeastTripling
CO2
Avoid Doubling
CO2