CtL/CtG - Boundary Conditions and
Chances of Implementation
Dr. Frank Schwendig – RWE Power AG
RWE Power
Dr. Schwendig
2010-05-03
PAGE 1
Starting point
CtL/CtG is economic when oil
price is higher than 80 $/bbl
RWE Power
Dr. Schwendig
?
2010-05-03
PAGE 2
Analysed CtL/CtG products
Products
~ 580 m³ H2
~ 180 m³ CH4 (SNG)
1 t lignite
Gasification
Gas
conditioning
~ 270 kg Methanol
CO2 to
atmosphere
or storage
~ 140 l Fuels
From RWE‘s perspective, i. e. - power producer with own lignite mines
- experience with coal gasification
- Germany
RWE Power
Dr. Schwendig
2010-05-03
PAGE 3
Basis for investigations:
Project development for
450 MW IGCC/CCS Hürth power plant
⇒ Based on large-scale project
⇒ Realistic information about plant technology
and for economic evaluations
RWE Power
Dr. Schwendig
2010-05-03
PAGE 4
Criteria for chances of realization
Market
> Market volume, market share of production
> Demand for product, space for additional production
> Market entrance conditions
> Necessary infrastructure
> …
Costs
> Production costs
> Market price
> Production costs of alternatives
> …
RWE Power
Dr. Schwendig
2010-05-03
PAGE 5
Market conditions - summary
H2
-
Almost no open market
-
Low future potential (example: 10 % of H2 produced in IGCC/CCS
Hürth sufficient for complete bus fleet of Berlin)
-
Only for special cases and small amounts (slip steam)
CH4 (SNG, synthetic natural gas)
-
Unrestricted market (20 million tons per year of lignite cover
some 4.6 % of Germany’s natural gas demand)
-
Existing infrastructure
-
Optimum market conditions
RWE Power
Dr. Schwendig
2010-05-03
PAGE 6
Market conditions - summary
Methanol
25.000
capacity
20.000
-
Worldwide over capacity
-
Price risks
15.000
10.000
5.000
2000
2000
2200
3000
2950
2000
2001
2002
2003
2004
4000
4500
2005
2006
5500
7000
8000
demand
0
Cumulative Demand Grow th
2007
2008
2009
Cumulative Net Capacity Grow th
Fuels (Diesel)
-
Unrestricted market (20 million tons per year of lignite cover
some 3 % of Germany’s motor fuel consumption)
-
Existing infrastructure
-
Market access possibly problematic
-
Good market conditions
Best market conditions for SNG
RWE Power
Dr. Schwendig
2010-05-03
PAGE 7
Main costs drivers
> Fuel (coal) price
> Plant price
> Emission trading system ⇒ carbon price or CCS
RWE Power
Dr. Schwendig
2010-05-03
PAGE 8
Correlation between coal/gas/oil prices
„ Coal
„ Gas
„ Oil
High oil prices alone do not help because of simultaneously high coal prices
RWE Power
Dr. Schwendig
2010-05-03
PAGE 9
RWE’s Rhenish lignite mining area
offers a coal (lignite) resource which is independent from
world market and offers stable fuel costs
Key Data
- Surface mining
~ 92 M t/a
- 3.4 bn t approved lignite reserves
- Further potential: 35 bn t resources
A 46
Garzweiler:
1.3 bn t coal reserves
A61
A44
th
ou
-S
th y
or a
N ailw
R
Cologne
-
A4
Inden:
0.5 bn t coal reserves
Land recultivation
Surface Facilities
Approved mining claim
Power stations
Hambach:
1.6 bn t coal reserves
RWE Power
Dr. Schwendig
2010-05-03
PAGE 10
Development of plant prices
„ Plants
„ Oil
When oil prices seemed to be attractive for CtL/CtG, plant
prices were also high (price driver is a booming economy)
⇒ Realization of a project when plant price is low together
with a perspective of high oil prices
RWE Power
Dr. Schwendig
2010-05-03
PAGE 11
Emission trading system
CtL/CtG leads to CO2 emissions, i. e. to costs for CO2 certificates
CH4 (SNG)
Split of product costs
Share of CO2 costs
- depending on carbon price
- depending on CO2 intensity and
transfer of C into product respectively
Basic product costs w/o ETS
Emission trading is a significant cost driver for CtL/CtG products
RWE Power
Dr. Schwendig
2010-05-03
PAGE 12
Emission trading system
CtL/CtG leads to CO2 emissions, i. e. to costs for CO2 certificates
H2
Split of product costs
Share of CO2 costs
- depending on carbon price
- depending on CO2 intensity and
transfer of C into product respectively
Basic product costs w/o ETS
Emission trading is a significant cost driver for CtL/CtG products
RWE Power
Dr. Schwendig
2010-05-03
PAGE 13
Conclusion
CtL/CtG in Germany
> SNG offers best market opportunities followed by diesel;
otherwise rather limited applications
> Coal source independent from world market price needed
> Realization of project, when plant prices are low
> Emission trading sets the hurdle for economy significantly
higher
RWE Power
Dr. Schwendig
2010-05-03
PAGE 14