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© Vattenfall AB
Launching of the second European Climate Change Programme (ECCP II)
Lars StrömbergVattenfall AB
Stockholm/Berlin
Stakeholder Conference Brussels
24th October 2005
© Vattenfall AB 2
Who’s got the problem ?
© Vattenfall AB 3
ECCP I - experiences
CO2 free power plant
2000-07-16
Lars Strömberg Vattenfall AB© Vattenfall AB 4
Cost and Potential of options to reduce CO2 emissionsPrincipal example
Cost for carbon dioxide avoidance
[EUR/ton CO2]
0
50
100
Potential[Percent]
0 20 40 60 80 100
Hydro
Solar
Wind
Biofuel
Reforestation
CO2 sequestration
Coal to gas
Coal to coal
Oil to gas
Late change coal
The picture will look different when different time perspectives are adopted
Picture is from 2000
© Vattenfall AB 5
Reductions of CO2 – What ECCP 1 gave
• The ECCP 1 work identified a number of measures which could to be taken.
• Without agreement among all, it was concluded that almost 30 % reduction could be reached at a cost below 50 €/ton CO2
– Change from coal to gas
– Introduce more efficient coal power technology
– Wind power
– Biofuels, especially in the heat sector
– More CHP
© Vattenfall AB 6
Cost and Potential of options to reduce CO2 emissions until 2010 Derived from ECCP Energy Supply Preliminary report.
Cost for carbon dioxide avoidance
[EUR/ton CO2]
0
50
100
Potential[Percent]
0 20 40 60 80 100
Solar
Wind
CO2 sequestration
Methane mines
Biomass heat
Coal to gas
Biomass heat
CHPCoal to Coal
© Vattenfall AB 7
Reductions of CO2 – What we have learned (2)
• Now, after 4 years we have learned a few things:– We will remain to be dependant on fossil fuels for a long time– Change from coal to gas has not happened
• Due to high gas prices and lack of long time confidence– Building new efficient coal - yes
• Several large plants have been built and at least seven large units under way.
– Wind power has severe limitations• Cost lies about 70 – 90 €/MWh• When capacity (MWs) exceeds about 10 % in an area, the system
cannot take any more, need for extra transmission and reserve power
• 39 000 MW wind leads to that conventional power can only be reduced 2 500 MW according to one study
© Vattenfall AB 8
Reductions of CO2 – What we have learned (3)
– Biofuels are used, especially in the heat sector.
• All district heat and CHP is using biofuel in Sweden today (140 TWh fuel)
• To maintain competitiveness for bio fuels, it is necessary to keep CO2 tax in parallel with the trading system, at a level of 75 €/ton of CO2
• Biofuel usage has reached its limit in Sweden. 45 % of the fuel is imported from Russia, Baltic states and Canada !
– CHP is built wherever possible
• Few opportunities left
© Vattenfall AB 9
Reductions of CO2 – What we have learned (3)
• Carbon Capture and Storage CCS has gained much recognition and development is going fast.
– Many countries have recognized CCS as a powerful tool and have introduced it in their plans to fulfill their environmental goals
• The USA, UK, Australia, France, Germany among many others
– CCS does cost 20 – 25 €/ton CO2
• ECCP 1 assumed 50 €/ton of CO2
– Storage capacity exceeds the remaining fossil fuel reserves
– Storage in geological formations is available all over the world, all over Europe, off-shore and on-shore
– CCS will not be available in a large scale until 2015 –2020
• ECCP 1 assumed before 2010
– CCS can probably reach half of the mitigation necessary to reach our long term goals of 60 – 80 % of reduction until 2050
© Vattenfall AB 10
Emission Trading
Emission Trading sets the commercial framework for new technology in Europe
© Vattenfall AB 11
European CO2 trading system Sept. 2005
© Vattenfall AB 12
Allocations in the European trading system
-100 -50 0 50 100 150 200 250 300 350 400
Total
Public Power and Heat
Pulp and Paper
Metals
Oil and Gas
Cement, Lime, Glass
Other
Mio. t CO2
In total 12 000 units is included in the trading system. In the National allocation plans 2 100 Mton/year or 6300 Mtons for three years have been distributed. This is the roof set for emissions. The deficit is calculated to 180 Mton for 3 years. The power industry has a deficit of 360 Mton. Other sectors have an overallocation.
© Vattenfall AB 13
Marginal cost vs. Reduction of CO2 emissions in EUR/ton CO2Source: ECOFYS Economic evaluation of sectorial reduction objectives for climate change
The price in Sept 2005 is about 24 €/ton CO2 ???
© Vattenfall AB 14
Capture and storage
Capture and storage of CO2
© Vattenfall AB 15
The CO2 free Power Plant principle
• The principle of capture and storage of the CO2 under ground
The CO2 can be captured either from the flue gases, or is the carbon captured from the fuel before the combustion process.
The CO2 is cleaned and compressed. Then it is pumped as a liquid down into a porous rock formation for permanent storage.
© Vattenfall AB 16
Storage and transport
CO2 free power plant
© Vattenfall AB 17
Storage of CO2 in a Saline Aquifer under the North Sea
The Sleipner field. Oil and gas production facilities. (Source: STATOIL )
CO2-injection into the saline aquifer
Utsira.(Source:STATOIL)
© Vattenfall AB 18
Storage Capacity, saline aquifers
There exists more
storage capacity
within Eorope (and
in the world) than
the remaining fossil
fuels
Source:
Franz May,
Peter Gerling,
Paul Krull
Bundesanstalt für Geowissenschaften und Rohstoffe, Hannover
© Vattenfall AB 19
CO2 Transport and storage Schweinrich structure
Two pipeline transport routes are possible
Both routes can be designed to follow existing pipeline corridors >90%
Structure can contain 1,4 billion ton of CO2, equivalent to about emissions from 6000 MW their whole lifetime
Berlin
© Vattenfall AB 20
Reservoir simulation – 40 year model
Due to buoyancy, the CO2 strive against the top of the formation
The CO2 spreads in the whole reservoir
Conclusion: It is possible to inject 400 Mt CO2
Injection at flanks
© Vattenfall AB 21
Geological structure modelling. Schweinrich
10 years 200 years 500 years
2000 years 5000 years 10000 years
© Vattenfall AB 22
Capture
CO2 free power plant
© Vattenfall AB 23
Post-combustion capture
This technology is already commercially available in large scale (500 MW). It is at present the most expensive
© Vattenfall AB 24
Pre-combustion capture
This technology needs development. Might be competitive. The gasifier exists in demo plants.
The turbine is in the lab stage.
Produces Hydrogen as an intermediary product
© Vattenfall AB 25
O2/CO2 combustion is the preferred option at present
At present the most competitive and preferred technology for coal.
It needs development, pilot and demo plants to get design data
© Vattenfall AB 26
0
10
20
30
40
50
60
70
IEA G
HG PF 20
04 n
o ca
ptur
e
IEA G
HG PF 20
04 p
ostco
mb.
IEA G
HG PF 20
20 n
o ca
ptur
e
IEA G
HG PF 20
20 p
ostco
mb.
Mits
ui 20
04 P
F no
captur
e
Mits
ui 20
04 O
2/CO2
PF
Mits
ui 20
20 P
F no
captur
e
Mits
ui 20
20 O
2/CO2
PF
IEA G
HG IGCC 2
003 n
o ca
pture
IEA G
HG IGCC 2
003 p
re-c
omb.
IEA G
HG IGCC 2
020 n
o ca
pture
IEA G
HG IGCC 2
020 p
re-c
omb.
ENCAP PF L
ignite
Oxyfu
el W
FGD
Oxyfu
el with
out W
FGD
IEA G
HG 200
4 NGCC n
o ca
pture
IEA G
HG 200
4 NGCC p
ostc
omb.
IEA G
HG 202
0 NGCC n
o ca
pture
IEA G
HG 202
0 NGCC p
ostc
omb.
Mits
ui 20
04 N
GCC no ca
ptur
e
Mits
ui 20
04 O
2/CO2
NGCC
CO
E [
EU
R/M
Wh
e]
CO2 penalty 30EUR/T
CO2 penalty 20EUR/T
CO2 penalty 10EUR/T
COE
Hard Coal Natural gasLignite
Total generation cost of electricity with CO2 penalty
© Vattenfall AB 27
0
10
20
30
40
50
60
IEA GHGPF 2004
postcomb.
IEA GHGPF 2020
postcomb.
Mitsui 2004O2/CO2 PF
Mitsui 2020O2/CO2 PF
IEA GHGIGCC 2003pre-comb.
IEA GHGIGCC 2020pre-comb.
OxyfuelWFGD
OxyfuelwithoutWFGD
IEA GHG2004 NGCCpostcomb.
IEA GHG2020 NGCCpostcomb.
Mitsui 2004O2/CO2NGCC
CO
E [
EU
R/M
Wh
]
COE penalty
COE origninal
Hard Coal Natural gasLignite
Generation cost with and without CO2 capture
© Vattenfall AB 28
Electricity generation costs
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Ele
ctr
icit
y p
rod
uc
tio
n c
os
t E
UR
/MW
h
Fuel andconsumables
Fixed O&M +additional op costsRunning O&M
Capital costsEUR/MWh
CC CO2 capt.PF oxyfuelCCPF
© Vattenfall AB 29
Generation costs incl. CO2 costs (20 €/ton)
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Ele
ctr
icit
y P
rod
uc
tio
n c
os
t E
UR
/MW
h
CO2 penalty
Fuel andconsumablesFixed O&M +additional op costsRunning O&M
Capital costsEUR/MWh
PF CC PF oxyfuel CC CO2 capt.
© Vattenfall AB 30
Avoidance costs of CO2
0,0
10,0
20,0
30,0
40,0
50,0
60,0
Avoidance cost €/ton CO2
CO2 penalty
Fuel and consumables
Fixed O&M + additional op costs
Running O&M
Capital costs EUR/MWh
PF with CO2 capture Gas CC with CO2 capt
Avoidance costs
2000-07-16
Lars Strömberg Vattenfall AB© Vattenfall AB 31
Cost and Potential of options to reduce CO2 emissionsPrincipal example
Cost for carbon dioxide avoidance
[EUR/ton CO2]
0
50
100
Potential[Percent]
0 20 40 60 80 100
Hydro
Solar
Wind
Biofuel El
CO2 Capture and Storage
Coal to gas
Oil to gas
New efficient coal
New Picture 2005 including recent knowledge
Savings
Biofuel Heat
© Vattenfall AB 32
• Carbon capture and storage from Coal fired Power plants can be done at a cost close to 20 €/ton CO2
– Capture at about 15 €/ton of CO2– Storage at lower than 2 €/ton CO2– Transport depending on distance and volume, but 5 €/ton of CO2 for
large plants on shore
• More than enough storage capacity on shore and off shore is at hand in saline aquifers
• Technology choice is not yet made. Oxyfuel is preferred technology in Vattenfall at present
• The commercial choice stands between Gasfired CC without CCS, taking the penalty of CO2 emission, and Coal fired plants with CCS
Conclusions from analysis - Reduction of CO2
Lars Strömberg 2003 07 05
Vattenfall AB
Corporate Strategies
© Vattenfall AB 33
Taking responsibilty
• Lord Oxburgh, former chairman of Shell Transport and Trading:
"CCS is absolutely essential if the world is serious about limiting greenhouse gas emissions“
• The new report from the Intergovernmental Panel on Climate Change (IPCC) concludes:
“CCS could achieve more than half of the emissions reductions necessary to mitigate climate change up to 2100”
Vattenfall agrees with this. We also believe CCS is needed to fulfill our climate goals
© Vattenfall AB 34
Back up
CO2 free power plant
© Vattenfall AB 35
The Climate Change
• The Climate Change problem is for real
• EU ministers have agreed on, that we have to reduce the emissions to maintain a reasonable CO2 concentration in atmosphere
– 15 – 30 % until 2030
– 60 – 80 % until 2050
• A radical solution is necessary. We cannot wait
© Vattenfall AB 36
CO2 storage cost
Fictive cost calculations using tool developed in EU-funded GESTCO project:
Storage at Schweinrich of 10 Mton CO2 per year over 40 years:
© Vattenfall AB 37
CO2 transport cost:
Transport to Schweinrich from Schwarze Pumpe power plant:
Distance 320 km
10 Mton CO2 per year over 40 years:
© Vattenfall AB 38
Pilot Plant
CO2 free power plant
© Vattenfall AB 39
Construction area
© Vattenfall AB 40
Boxberg IV
Why Oxy-fuel technology ?
We work with all three (four) technologies, but:
• Oxyfuel technology is the technology giving lowest costs at present
• It is suitable for coal and have relatively little development work left
• We can build on our good experience with present PF technology
© Vattenfall AB 41
Analysis of some technology options
CO2 free power plant
© Vattenfall AB 42
CO2 Free Power Plant: Technology ChoiceThe ultimate technology choice is not clear yet. Several technologies will probably be applied to different commercial situations.
• Post combustion capture. – At present the most expensive option but commercially available in large size. – Can be applied to existing plants.– Needs no demo. Optimization of existing options needed.
• Pre combustion capture.– The most complicated technology. IGCC demos have not been successful– Produces hydrogen as integrated intermediate fuel for the power process, from coal or
gas.– Development need for the gas turbine run on hydrogen – Lab tests + pilot + demo
• CO2/O2 (oxy-fuel) capture– The most preferred option at present– Technology straight forward and builds on the modern supercritical coal fired boilers– Tests in technical scale positive. Needs pilot plant and demo plant
• Chemical Looping technology is the most interesting long term option.– Lab experiments very encouraging.
© Vattenfall AB 43
• Specific data for the plants
Options for reduction of CO2
Lars Strömberg 2003 07 05
Vattenfall AB
Corporate Strategies
PF CC PF oxyfuel
CC with capture
Specific Investment costs €/kWe
1000 550 1425 938
Additional investment mio €
140 100
Power output MW 900 500 720 405
Energy penalty MW 180 95
Efficiency % 45 60 36,5 49
© Vattenfall AB 44
• Common data used for the four plants:
Options for reduction of CO2
Coal Price 50 $/ton ~ 5,7 €/MWh
Gas price 13 €/MWh
Depreciation time 25 years
Interest rate 10%
© Vattenfall AB 45
The Problem
• Fossil fuels are needed– Analysis show that fossil fuels will remain as major energy source
in 2030 ( 85 %)
• The top priority is to introduce renewable energy sources in the energy system
– All analysis show that renewable energy sources will play a large role, but not large enough and soon enough
• In several countries nuclear power is decommissioned
• No renewable energy source not known today can play a significant role in 25 years from now, i.e. 2030
• Emissions from fossil fuels must be reduced
© Vattenfall AB 46
Schwarze Pumpe power plant
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