Global CCS Institute

Melbourne Members’ Meeting 2011

Session C – CCS ProjectsSession C – CCS Projects

Presented by Mark Weaver

Clean Energy Division

Australian Government Department of Resources,

Energy and Tourism

ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

• Australia is committed to emission reduction

targets

– By 2020: 5% below 2000 levels

– Proposed: 80% below 2000 levels by 2050

• These targets are a major challenge given our

heavy reliance on fossil fuels

Greenhouse commitments

heavy reliance on fossil fuels

– Coal 77% of electricity and 32% of emissions

– Growing profile of gas/LNG developments

– Improvements in efficiency are important

– However, carbon capture and storage (CCS)

essential to achieve major cuts in emissions

– Responsibilities as a major international energy

supplierENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

CCS puzzle from Australian

Government perspective

Legislative

Certainty

StorageKnowledge &

Collaboration

R&D

Demonstration

Engagement

CCS

ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

Competitive,

low-emission

energy supply

and use

Greenhouse

gas reductions

New industries

Research Development

Commercial

Scale

Incubating Promoting SustainingImagining Demonstrating

Pilot

Scale

Demonstration Deployment

Supported

Commercial

Competitive

Commercial

IMPACT

TECHNOLOGY PUSH MARKET PULL

Government support across the innovation chain

ANLEC R&D

CSIRO

CO CRCNew industries

CCS FLAGSHIPS

NLECI

CO2 CRC

CARBON PRICE

Gorgon LNG

ProjectTo sequester 3.5

MT per year.

CCS Flagships & commercial scale projects

Wandoan /

QLD integrated

CCS projectTo sequester 1 MT MT per year.

Collie South

West HubTo sequester 2.4 MT per

year.

To sequester 1 MT

per year. Capture

project under

review.

CarbonNetTo sequester

1 – 3 MT per year.

ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY

How does CCS Flagships differ from

other programs?

• Staged selection process

• Preparedness to fund early project development stages

• Close involvement in project development

Photo source: Carbon Sequestration Leadership Forum

Lessons learnt from

Government perspective

• Prior estimates of project costs and deployment timeframes –

wildly optimistic

•Development pathway does not sit neatly within a Government

grant program box.

•Do not put the capture plant cart ahead of the storage horse•Do not put the capture plant cart ahead of the storage horse

•All Australian projects involve “greenfield” storage sites

•Accordingly, uncertainty on storage presents the highest risk

Future approaches to

Government support for CCS

• Prioritise expenditure on storage – progress capture options

in parallel

•Keep an open mind on funding/ financing mechanisms

•Keep an open mind on risk allocation and sharing

Challenges ahead

• Storage – community – resource

conflicts

•Building regulatory consistency and

regulator capacity

•Maintaining funding in challenging •Maintaining funding in challenging

economic times

• Implementing market pull

mechanisms

•Building a business model for private

sector investment across the supply

chain

Conclusions

•CCS Flagships Program – necessity required

flexibility

•Domestic and global events present

challenges

• Project development much more

challenging and longer than expectedchallenging and longer than expected

• Progress - particularly proving up storage is

slow

• Proving up storage is Australia’s highest

priority

•Building the business model is essential

• This will test the risk appetite of Governments

and industry

Thank youThank you

ENHANCING AUSTRALIA’S ECONOMIC PROSPERITY