ZEP
Technology Platform
Zero Emission Fossil Fuel Power Plants
The cost of technology - designing a cost estimation process
- Cost estimations
- Representative CCS cases
- Common issues across CCS Chain
Basis for discussion at Kick-off 14th September
Vattenfall Research and Development AB/Clas Ekström
7th September 2009
Cost estimations (1)
Collect and calibrate costs
•
Collect input from EU-financed projects, available studies and TTech
members
•
•
•
•
CAPEX/Investment Costs
OPEX excluding fuel costs
Adjust to consistency with the selected, representative CCS cases and
basic assumptions
Perform calculations of total yearly costs from:
•
•
•
Yearly Capital Costs (from CAPEX, Interest rate, Economic lifetime)
Yearly OPEX excluding fuel costs
Yearly fuel costs (for Power Plants and Capture)
Accuracy:
•
•
Depends on accuracy in studies used
At the best corresponding to accuracy in (pre-)feasibility studies;
~+/-30% (?)
Cost estimations (2)
90
(from total yearly costs and yearly net
electricity production)
•
70
EUR/MWh
For Power plants and capture:
Perform calculations also of:
•
Break Even Electricity Selling Price
80
60
50
40
30
10
0
Hard coal
Lignite
Natural Gas
Cost of Electricity =
=Break Even Electricity Selling Price
For Transport and Storage:
Perform calculations also of:
•
Costs per ton transported/stored CO2
For selected complete CCS cases:
Perform calculations also of:
•
Break Even Electricity Selling Price
•
CO2 avoidance costs
No capture
Pre-combustion
Post-combustion
Oxyfuel
20
CO2 avoidance costs for capture
100
80
EUR/t CO2
(from total yearly costs and yearly
transported/stored CO2)
Note:
Power generation cost
without CO2 transport
and storage cost
Note:
CO2 Avoidance cost
without transport and
storage cost
Pre-combustion
Post-combustion
Oxyfuel
60
Power plant and
CCS technology
improvement
potential
40
20
0
Hard coal
Lignite
Natural Gas
CO2 Avoidance Costs
Example from ZEP “WG1 Power Plant and Carbon Dioxide Capture,
Final Report dd. 13 October 2006”
Representative CCS Cases
- Power plants with CO2 Capture
1.
Define reference power plants without CCS
•
•
Selected to be considered as “representative” for European large fossil fuelled power
plants, that are likely to in the future become replaced by or retrofitted with power plants
with CCS.
Such a selection was made in EC-financed “Capture R&D” projects
•
•
ENCAP and CASTOR , and then adapted to and used by DYNAMIS, CESAR, DECARBIT,
CAESAR
As an initial proposal to the meeting, these reference power plants without capture are
proposed as reference power plants for this study:
•
Fired with
•
•
•
•
Natural gas (~400 MW el gross)
bituminous coal (~800 MW el gross, possibly also ~400 MW el gross)
lignite (~1000 MW el gross, possibly also ~400 MW el gross)
State-of-the art power technology
Representative CCS Cases
- Power plants with CO2 Capture
2.
Define Relevant Power plant concepts with CO2 capture
•
Using the reference power plants as starting point
•
“First Generation” capture power plants; technologies that are candidates for EU
Demonstration Project
•
•
•
“2nd Generation technologies
•
3.
Focus on “commercial” plants
Consider demo plants
Technologies to be selected based on ZEP TTech Long Term R&D Plan
The power plant concepts with CO2 capture defines some inputs to
transport and storage:
•
•
•
Estimated CO2 production rates
“Typical/representative” operation cycles + load factors; base-load operation typically
7.500 full-load hrs per year used in EC-financed capture projects
Technical lifetimes; 25 years for Natural Gas Combined Cycle plants, 40 years for
bituminous coal and lignite fired plants used in EC-financed capture projects
Representative CCS Cases
- Transport scenarios - Commercial phase
Commercial phase:
• Identify and describe three (?)
representative transport scenarios with a
minimum transported volume (e g 10 mT
CO2 p a)
• Both Clusters and Point-to-Point
• Trunk-and feed-in pipelines, hub solutions,
river shipping and sea-going ship
transport
• Maximum pipe-line distance 750 km
• Maximum shipping distance 2 000 km
• Evaluate published reports’ cost analyses
• Extrapolate to the identified scenarios
Source: McKinsey, Carbon Capture and Storage: Assessing the Economics
Representative CCS Cases
- Transport scenarios - Demonstrator phase
Demonstrator phase:
• Identify and describe three
representative and different transport
scenarios (point-to-point) each for a
minimum of 2 mT CO2 p a
• Evaluate published reports’ cost
analyses
• Extrapolate to the identified scenarios
• List Demonstrator Candidate Projects
(of relevant size)
•
•
Identify characteristics and stakeholders
Suggested list from Storage Cost Group
• Selection criteria if needed
•
•
What is representative, how many cases if not
all ?
Accessibility of the data
Source: McKinsey, Carbon Capture and Storage: Assessing the Economics
Representative CCS Cases
- Storage Demonstrator phase/Short-Term Scenarios
•
•
•
Starting point is ZEP Demo proposal
Short-term scenarios identified from current and proposed demo
projects : 1 source – 1 sink
Three main parameters to vary  8 cases. To be agreed at kickoff meeting
–
–
–
Depleted field <-> Aquifer
Onshore <-> offshore
Shallow > deep
Representative CCS Cases
- Storage Commercial phase/Long-term Scenarios
To be further elaborated
1.
2.
Both Clusters and Point-to-Point
Cluster analysis – scenario definition based on
emissions (regional) thus capture & transport
1.
3.
For each cluster, identification of geological
formations suitable for storage
1.
2.
3.
4.
4.
Identification of emissions clusters
Source: IEA-GHG / ECN studies
DG TREN call on Europe-wide CO2 infrastructures
Other ?
To identify basic parameters for storage properties
(depth, permeability, porosity…)
Limited information available (DYNAMIS /
GeoCapacity?)
North-Sea basin task force (Poyry)
Other ?
Specify operating boundaries
Consistent technical lifetime, common flowrate,
volume…)
Common Issues across CCS Chain (1)
1.
•
CO2 pressures and quality standard/composition(s)
1st attempt DYNAMIS/ENCAP quality requirements, covering technical and HSE issues for
transport – and to some extent storage - of CO2. For pipeline, ship transport.
Table: Summary of CO2 quality
requirements for pipeline
transport and for EOR.
Elaborated within the DYNAMIS
project
-Due consideration given to existing
regulations pertaining to safety and
toxicity in order to define maximum
limits for the concentration of
chemical components that are likely
to occur in the CO2 stream –
especially in the event of a pipeline
rupture.
-Owing to the risk of hydrate
formation and corrosion,
mechanical integrity of the transport
system is much dependent on the
absence of free water.
-Other impurities should be
excluded mainly for technical
reasons.
-Geological storage itself is not
believed to impose any additional or
more severe quality requirements
--EOR storage may impose more
stringent requirements, due to
interactions with the oil.
Common Issues across CCS Chain (2)
1.
•
•
CO2 pressures and quality standard/composition(s)
The capture concepts developed in ENCAP and other EU-projects are designed so that
these requirements will be met.
CO2 Transport and and Storage Working Groups can assume that CO2 streams from large
power plants will meet these requirements
ENCAP Guidelines (elaborated before DYNAMIS) cover some specific limit values for ship transport and also some
additional components
Common Issues across CCS Chain (3)
1.
CO2 pressures and quality standard/composition(s)
•Required
delivery pressure(s) to transport to be defined by:
•Required
delivery pressure(s) to storage, based on the defined “representative” storage cases. (input to
CO2 transport)
•To define required delivery pressure(s) to transport: Add estimated total “net” pressure losses through
transport chain, as defined by transport cases; transport mode(s) – pipeline, ship - and distances; as
much as possible of required compression and conditioning to be integrated with power plant and
capture.
•1st
attempt as in ENCAP and other projects:
•Pipeline transport conditions:
•CO2 delivery pressure 110 bar
•CO2 delivery temperature max
•Ship
30°C.
transport conditions:
•CO2 delivery pressure 7 bar
•CO2 delivery temperature max -50°C.
Common Issues across CCS Chain (4)
1.
Project timing
1st attempt “typical”
timelines for
realization of
complete CCS
projects, estimated
in a (soon)
publically available
DYNAMIS report,
and by ZEP (“EU
Demonstration
Programme for
CO2 Capture and
Storage (CCS)”)
Common Issues across CCS Chain (5)
5.
Economic boundary conditions/Key assumptions
Interest rates
•
•
•
•
•
In ENCAP and other projects, a combined real interest rate is used taking into account interest rates on loans, equity rate, and
required rate of equity, defined as a weighted average cost of capital = 8.0 % with variations from 4.0 to 12.0 %.
If the inflation rate is assumed to be equal for all costs and income in the project life it can be included in the real terms interest
rate. This has been done in ENCAP and other projects.
As the objective is to evaluate different CO2 capture methods, the comparisons are based on pre-tax and pre-equity payments.
The equity rate is consequently included in the average real term interest rate
As for the equity rate also the corporate tax can be disregarded as the comparisons are based on pre-taxation and pre-equity
payments.
Some countries have special emission taxes on NOx and SO2. As there are no common European emission taxes, emission
taxes are not included in the calculations.
Economic lifetimes
ENCAP and other projects make calculations for:
•
40 years – estimated lifetime for coal fired power plants
•
25 years: Various things not related to the power plant itself, can happen and such things cannot be foreseen. Therefore, there
is a general interest to make sure that an investment can be "sufficiently" profitable also for a not so long period as 40 years say 25 years, even when it is most likely that a plant can generate good incomes for a longer period - 40 years.
•
Do we in ZEP study need to consider credit lifetime20 years if CDM projects??
Common Issues across CCS Chain (6)
5.
Economic boundary conditions/Key assumptions
Fuel prices – possible selections:
a) From current EU-projects (CESAR, DECARBIT, CAESAR), real terms year 2008:
•
Natural gas: 6.5 €/GJ, variations 4 – 9 €/GJ
•
Bituminous coal: 3 €/GJ, variations 1.5 – 4.5 €/GJ
•
Lignite: 1.2 €/GJ, variations 0.6 – 1.7 €/GJ
b) Based on EC Second Strategic Energy Review, Nov 2008:
Select values for year 2020? Base case average oil price scenarios?
•
Natural gas: 8.6 €/GJ, variations 6 - 11 €/GJ
•
Bituminous coal: 2.7 €/GJ, variations 2 – 3.5 €/GJ
$'2005/boe
2005
Oil price scenario
2010
2015
61$/bbl 100$/bbl
2020
61$/bbl
100$/bbl
61$/bbl
100$/bbl
Oil
54,5
54,5
69,7
57,9
83,3
61,1
100,1
Gas
34,6
41,5
46,3
43,4
61,4
46,0
77,5
Coal
14,8
13,7
15,8
14,3
20,3
14,7
24,2
1€ = 1.25$
1 boe (barrel of oil equvalent) = 6.12 GJ
Inflation 2%/year
EC Working Document "Europe's current and future energy position. Demand – resources - investments"
for EU Second Strategic Energy Review, {COM(2008) 781 final}, Nov 2008
€'2008/GJ
2005
Oil price scenario
2010
2015
61$/bbl 100$/bbl
2020
61$/bbl
100$/bbl
61$/bbl
100$/bbl
Oil
7,6
7,6
9,7
8,0
11,6
8,5
13,9
Gas
4,8
5,8
6,4
6,0
8,5
6,4
10,8
Coal
2,1
1,9
2,2
2,0
2,8
2,0
3,4
c) From other public source(s)
•Natural gas: …€/GJ, variations…… €/GJ
•Bituminous coal: …€/GJ, variations…… €/GJ
•Lignite: …€/GJ, variations…… €/GJ
Common Issues across CCS Chain (7)
5.
Economic boundary conditions/Key assumptions
Electricity prices (to calculate electricity costs for CO2 transport and storage)
From public source(s):
•
…..€/MWh el
Currency exchange rates
From current EU-projects (CESAR, DECARBIT, CAESAR):
•
0.683 €/$
•
1.258 €/£
From EC Second Strategic Energy Review, Nov 2008:
•
1.25 $/€
Year for cost levels: 2008??
Load factors (from Power Plant and Capture issues)
Development of markets, financial incentives, financial supports, regulatory
issues etc. that influence demonstration and deployment rates.
Needed? Can it be achieved?
Common Issues across CCS Chain (8)
General approach for all the work:
1.
2.
Make “check list(s)” with relevant cost items
Indicate and select only those who are considered to have significant impact on total
costs for power plants and capture, transport or storage.
Starting points:
•
•
•
•
ENCAP “Reference cases and guidelines for technology concepts” (2008)
CESAR, DECARBIT,CAESAR “Common Framework Definition Document” (2009)
McKinsey study “Carbon Capture & Storage: Assessing the Economics”, Sept 2008, and following study “EU
Demonstration Programme for CO2 Capture and Storage (CCS)”: ZEP’s Proposal”, Nov 2008
DYNAMIS Brochure “Electricity and Hydrogen Production with Near-Zero Emissions with CO2 Capture and
Storage (CCS)” (To be published)