Economic Modeling and
Assessment of CCS
Implementation in Europe
Vice-director
Vice
director
Institute of Physical Energetics
Dr.phys. Gunta Šlihta
November 3, 2010
Overview of the Presentation
EMACE project objectives, structure
and
d partners
t
 Main
a activities
act t es in the
t e project
p oject
 Examples from the project results
 Main results of the project

FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
EMACE Project Objectives


Assessment of CCS feasibility in participating countries, identification of
potential target plants for CCS implementations and their classification in
terms of perspective CCS realisation
Identification of prerequisites for future CCS integration by scenarios
development and modelling:
 Assessment of energy
energy-environmental
environmental policies impact to CCS
penetration (ETS, CO2 and energy taxes, GHG emissions caps, etc.)
 Estimation of economic parameters of CCS penetration and analysis
of their sensitivity
y (including
(
g technical and economical parameters
p
of
different CCS technologies and their development scenarios, energy
resources and prices and their uncertainty)
 Modelling of development scenarios of energy supply systems, CCS
i t ll ti
installations
included,
i l d d up to
t year 2030 iin all
ll participating
ti i ti
countries.
t i
Development of reference scenario and 3-4 scenarios of CCS
penetration, and their optimisation modelling
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
EMACE Project Objectives



The dissemination of project outcomes to selected target
groups, such as energy market actors, environment and
energy strategy planners, decision makers, and possible
investors in CCS technologies, as well as to the general
p
public
Support to the European and national environmental and
energy policies by providing adequate information to foster
both R&D activities and CCS commercial deployment
Enhancement of regional and national level capacities in
the field of CCS R&D activities
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
WP1
Project Coordination and
Management
Leader: Institute of Physical
Energetics
WP3
WP2
CCS Database creation
Leader: Centre for Research and
T h l
Technology
H
Hellas
ll
Institute for Solid Fuels Technology
and Applications
WP4
Modeling and
Economic assessment of
CCS
Leader: Instituto Superior
Tecnico/Center for Innovation,
Technology and Policy Research
Dissemination: Promoting platform
for CCS penetration
Leader:
L
d
IInstituto
tit t Superior
S
i
Tecnico/Center for Innovation,
Technology and Policy Research
Greece
Greece
Portugal
Latvia
T h i lU
Technical
University
i
it
of Crete - Department
of Mineral Resources
Engineering y of Solid
Laboratory
Fuels Beneficiation
and Technology
Centre
C
t ffor Research
R
h
and Technology
Hellas
Institute for Solid
gy and
Fuels Technology
Applications
I tit t S
Instituto
Superior
i
Tecnico/Center for
Innovation,
Technology and
y Research
Policy
IInstitute
tit t off Ph
Physical
i l
Energetics
WP2: CCS Database Creation
Main Results




Classification of information on national energy
supply system and its structure (total installed
capacit CHP sha
capacity,
share,
e unit
nit availability
a ailabilit factors
facto s etc.)
etc )
Evaluation of potential target plants for CCS
technologies in partner countries (with the
emphasis
h
to the
h power plants);
l
)
Database on CCS target plants in terms of
technical and economical p
parameters ((the
database serve as a support tool for the input for
WP3: Modelling and Economic Assessment of CCS)
Database includes information about 39 power
plants, including 27 coal power plants
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Major industrial
CO2 sources in
mainland Portugal
characterized by
clusters
l t
(CO2
emissions higher
than 0
0.1
1 Tg per
year, data based
year 2006))
on y
Stationary
CO2
emissions
i i
iin
relation to
potential
storage
basins in
Greece
WP2: CCS Database Creation
Example: CO2 Storage in Latvia
WP2: CCS Database Creation
Example: CO2 Storage in Latvia



Latvia has at least 16 structures that are
suitable for CO2 storage.
storage
Initial estimations show that the
combined
bi d capacity
it ffor storage
t
in
i 16
structures could contain 400 Mt CO2
There are 3 potential CO2 storage
structures that are located up to 40km
from the potential coal power plant in the
city of Liepāja
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
WP 3: Modelling and
Economic Assessment of CCS
Identification of prerequisites for future CCS
integration
g
by
y scenarios development
p
and
modelling;




Modelling of development scenarios of energy supply
systems CCS installations included,
systems,
included up to year 2030;
Assessment of energy-environmental policies impact
to CCS penetration (ETS, CO2 and energy taxes, GHG
emissions caps,
caps etc.);
etc );
3 modelling exercises were carried out for the
gy supply
pp y systems
y
in Portugal,
g , Greece and
energy
Latvia with different modelling approaches and
tasks
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
WP 3: Modelling and
Economic Assessment of CCS



Technical and economical parameters of national energy
systems were described and EU and national legislation in
the fields of energy and environment were formalised for
the implementation in the structure of the model
Technical and economical parameters of different CCS
g
were included in the structure of the model as
technologies
a separate unit
Two modelling tools were used and applied to carry out
the exercise:


Portuguese and Greek team used TIMES model for the
analysis of the energy system in Greece and Portugal;
Latvian team used MARKAL model for the analysis of the
energy system in Latvia;
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Scope and Approach of Modelling




Focus on the CCS technologies in the power
generation sector (industry as CCS technology user
excluded from modelling exercises);
The base year of the models is 2005 with the horizon
until the year 2040 and resolution of one year period
of time;
Each fossil fuel power plant is interpreted as an
individual technology since they are the focus of this
st d incl
study,
including
ding possibilit
possibility of retrofitting
et ofitting with
ith capture
capt e
technologies;
The techno-economic data interpreting supply side
t h l i are iinstalled
technologies
t ll d capacity,
it ttechnical
h i l lif
lifetime,
ti
electrical efficiency, availability factor, capital costs,
fixed costs and variable costs.
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Greece





Business-as-usual scenario (BAU)
Scenario A: The lignites/hard coal power plants that are
already licensed to be built,
built are assumed to have CCS.
CCS
Scenario B: CCS will be available for the power plants in the
first scenario plus all the power plants from 2015 onwards that
are approved and that use Lignite/ hard coal/ Mazut. The
power plants without license and without a defined year for
starting will be considered not to have CCS.
Scenario C: CCS will be available to all power plants that are
licensed,, including
g the NG p
power p
plants. The p
power p
plants
that are not licensed yet are assumed NOT to have the CCS
technology installed.
Each of these main scenarios has 3 sub-scenarios with
different taxations and permit prices for CO2 emissions
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Greece
Limits for CO2 emissions
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia

CCS technology unit with applicable
configuration and structure has been created in
th database
the
d t b
off Latvia-MARKAL.
L t i MARKAL Separate
S
t
modelling has been carried out for the power
plant with CCS technologies and two options for
the
h CO2 transportation
i
and
d storage:



Storage in Latvia (transportation via pipelines and
storage in the geological structures)
Transportation to the port via pipelines and export with
ships
Analysis
y
of possible
p
technical and economical
parameters of different CCS technologies were
carried out using the available international
scientific information sources
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia





Analysis of the CCS technologies in the Latvian energy
supply system included a set of scenarios that contains
actual factors of energy and environmental policy:
Base-scenario does not include any policy restrictions
Renewable energy sources policy - scenario (RES40CCS)
includes policy targets provided by the EC Directives and
Latvian Action Plans concerning 2020 and further
implications and development up to 2030
Scenarios with different CO2 tax rates in 2020 ((20,, 21,, 25,,
30 un 40 EUR/t CO2) - TAX”M”;
EU GHG emission reduction targets in 2020 and further
development for 2030 are described by the scenarios
EBNDCCS un EBNDCCS1
EBNDCCS1.
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia:
Development of GHG Emissions in
Selected Scenarios
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia:
Development of GHG Emissions in
Selected Scenarios



The results for the impact assessment of GHG emission
reduction policy and technologies confirm that:
Most effective scenarios for the reduction of GHG
emissions include the use of CCS technologies
While the current targets of GHG emissions in 2020 can be
reached by legislative support to the renewable energy
sources and energy efficiency measures, the
implementation of CCS technologies is more favourable to
reach further targets for reduction of GHG emissions
Scenario with tax rate 40 EUR/t CO2 in 2020 and
renewable energy sources policy - scenario build the next
group of scenarios. Renewable energy sources policy is
more effective in the period until 2020,
2020 however both
scenarios show similar values for the reduction of GHG
emissions in 2030.
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia:
Amount of Stored CO2 in Selected
Scenarios
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia:
Operation of CCS in Selected Scenarios


Analysis of most suitable time for the
implementation of CCS technologies, the amount
off captured
t
d and
d stored
t
d CO2 per year shows
h
that:
th t
According to the targets of GHG emissions set by
scenarios ((EBDNCCS un EBDNCCS1)) CCS
technologies come in the market after 2015 and
work with full capacity after 2025
Scenario with tax rate 40 EUR/t CO2 in 2020
foresee that CCS technologies come in the
market after 2015 and work with lesser capacity
than the previous scenarios (EBDNCCS un
EBDNCCS1). CCS technologies work with almost
full capacity only after 2030
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling
M
d lli
C
Case St
Study
d R
Results
lt in
i Latvia:
L t i
Marginal Cost of CO2 Abatement with CCS Technology
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Modelling Case Study Results in Latvia:
Marginal Cost of CO2 Abatement with CCS Technology


Results of modelling show that the
current development of CCS technologies
and the price level could lead to the cost
level of CO2 abatement in the amount of
100 EUR/t CO2
F th commitments
Further
it
t for
f the
th reduction
d ti
off
GHG emissions could lead to the cost
l
level
l off CO2 abatement
b t
t iin th
the amountt off
200 EUR/t CO2
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Conclusions on the modelling results



Applying TIMES and MARKAL model tools, case studies
about Greece,, Portugal
g and Latvia examine different
scenarios regarding the perspectives of using CCS
technologies to mitigate the GHG emissions
CCS technologies are important instrument to mitigate
GHG emissions in the future (2030-2050)
The application
pp
of different model tools and various
defined scenarios has let to similar results on the
perspective of CCS technologies. CCS technologies
become economically feasible in the scenarios where
price/tax is above 50EUR per tonne of CO2 emitted.
FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
WP 4: Dissemination
Publications in popular and scientific
magazines
i
and
d journals
j
l iin national
ti
l
scale
 Presentations in science-business
meetings in national scale
 Meetings with relevant national
public authorities and presentation
of main results in the project
p j

FENCO-ERA NET Project EMACE
Economic Modeling and Assessment of CCS Implementation in Europe
Thank you for your attention!
Institute of Physical Energetics
Aizkraukles 21, LV-1006,
Ri
Riga,
L
Latvia
t i
http://www.innovation.lv/fei
Dr. Gunta Shlihta
Tel.: +371 67552011
Tel.: +371 67558680
Fax: +371 67550839
E
E-mail:
il [email protected]
f i@ di l
Dr. Gaidis Klavs
Tel.: +371 67558681
Fax: +371 67550839
E-mail: [email protected]