overview of the teesside collective industrial ccs project

Overview of the Teesside Collective Industrial CCS

Project and respective insights for the Cement Industry

Tim Dumenil

SCCS Workshop - Industrial CCS: Constraints and

Opportunities for the Cement Industry

28th August 2015

Agenda

Introduction

Why Teesside & Why Industrial CCS (ICCS)

Project Objectives and Overview

Infrastructure Requirements

ICCS Value Chain & Support Mechanism

ICCS Business Case Output

Next Steps for Teesside

Insights for the Cement Industry

2

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Why Teesside & ICCS?

Image Source: Teesside Collective


TVU Objectives

5


System Capacity

5 mTpa or

15 mTpa

Storage Solution

Bunter 154km

Captain 433km

Teesside Overview

5 major elements to capture, transportation & storage of 2.8 mTpa of CO21) Capture, 2) Gathering, 3) Boosting, 4) Offshore Transport, 5) Storage

A

B

C

D

E

Image Source: Amec Foster Wheeler


Estimating Infrastructure needs

Multiple sources of CO2 supply

CO2 volumes variable

Longevity of the businesses

Importance of timing of an acceptable ICCS investment mechanism

7

9.7

2.30.3

12Mt CO2 currently emitted

Tier 0, > 1000ktpa

Tier 1, > 50ktpa

Tier 2, > 5ktpa


Business Case Output


Teesside ICCS is technically & economically viable:

Scenario discounted capex cost ranges £0.8-£2.1bn

Over 20 years the entire ICCS Chain for the Reference Scenario requires undiscounted financial support of £5.4bn (£1.5bn PV7) equating to £95/T for 56.5mT CO2 stored. (13% IRR. 7% Discount Rate)

Capture 47%, Gathering 3%, Offshore 50%

Trebling the infrastructure only requires an additional 8% of support (£104m)

Financial Support

(£/T over 20 years)

Excluding Return Undiscounted PV7

Ammonia 25.5 8.4

Steel 30.5 10.1

Hydrogen 34.8 12.4

PET 116.7 42.8

Including Return Undiscounted PV7

Ammonia 37.4 10.5

Steel 45.3 12.7

Hydrogen 61.6 17.5

PET 214.9 61.6

ICCS Value Chain – initial thoughts

9

Disaggregated model Each emission site will require a capture facility, which may be operated by

the process company, or someone else

Onshore transportation of gases is commonplace & many interested players

Offshore transportation of gases is also commonplace but fewer players

Very few players in storage domain

Several variations all with multiple players, which adds commercial complexity

Onshore TransportationCapture 1

Offshore Transportation

Storage

Capture 2

Capture 3

Capture 4

CO2

Contracts


Commercial Support Mechanism

10

Image Source: Societe Generale

Three options for a Funding Mechanism reviewed:

a Storage Mechanism Payment

a CO2 CfD Emitter Mechanism

a hybrid


Next Steps

11


Ambitious Schedule

“Bridge Phase” to secure funding and support for transition from Concept Study to Pre-FEED

Establishing an agreed Funding Mechanism solution with HMG is key

Additional emitters, i.e. new Power CCS project, to help fill 15 mTPa infrastructure and deliver significant scale efficiencies

Teesside Conculsions

12

ICCS technically and economically viable… but…

Full Chain Costs: 50% Capture, 50% Transport & Storage

Lots done and known on capture. Storage??

Commercially more complex versus a single full chain power station project

Multiple sources, vastly differing scales, cross-chain liabilities

Increased risk of commercial carbon leakage

Multiple players add complexity to risk allocation & financing

Maintaining the “polluter pays” principle

Financial support needs may be significant. ICCS needs a commercial mechanism that is attractive to global corporations


Cement Industry: CCS is core to Carbon Strategy

13

4 levers for CO2 emission reductions Energy efficiency 10%

Alternative fuels (biomass) 24%

Clinker substitution 10%

Carbon Capture and Storage 56%


Image Source: IEA and MPA

Cement Industry: CCS is core to Carbon Strategy

14


Anticipated CCS Beachheads

CCS Progress

Capture via 2 options √

Oxyfuel at €50/T CO2

Storage??

Scale of Factory

1-2 mT

10 mT

Regional Solutions

Cost of Cement

Image Source: ETI and MPA

Tim Dumenil

Creative Spirit and Energy Consultant

Management Consultants for the Energy Transition Carbon Capture & Storage – Oil & Gas Transition – Emerging Energy Systems

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overview of the teesside collective industrial ccs project

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