CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES View of a Generator Eckhardt Rümmler London, 15th September 2008

CARBON CAPTURE AND STORAGEFINANCING CHALLENGES AND OPPORTUNITIES

View of a Generator

Eckhardt RümmlerLondon, 15th September 2008

Seite 2CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG

Contents

E.ON strategy for future energy markets

Taking the existing to the next level: High efficiency power plants

Building a bridge to the future: „Capture Ready”

R&D at E.ON: the low carbon fossil fuel development portfolio

Page 3CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG

The European energy sector contributes with 1,400 Mt CO2

approx. 6 % to the global CO2 emissions

Others 14,2%

USA 21,7%

EU-25:14,8%

China 14,2%

Australia 1,3%

S. Korea 1,7%

Rusia 5,8%

Canada 2,1%

Africa 3%

S America 3,2%

Near East 4,2%

India 4,2%

Rest Asia 4,9%

Japan 4,7%

∑ approx. 24.000 Mt

Source: UNFCCC

ManufacturingIndustries

Trans-portation

Residential and Commercial

Source: UNFCCC GHG Inventory

CO2 emissions are not a EU but a worldwide

issue

EnergyIndustries: 37%

Global distribution of CO2 emissions 2003

EU CO2 emissions by sectors


WEC: Fossil fuels will have a role for some time to come

Sources: http://www.worldenergy.org“Energy Policy Scenarios to 2050” (WEC, 2007)“The energy industry unveils its blueprint for tackling climate change” (WEC statement 2007)

Electricity generation

0

2000

4000

6000

8000

10000

12000

2005 2020 2035 2050

EJ

Coal Gas Oil Biomass and wastes Nuclear hydro+geothermal Wind, solar


01000

2000300040005000

600070008000

900010000

2005 2020 2035 2050E

J Coal Gas Oil Biomass and wastes Nuclear hydro+geothermal Wind, solar


0

2000

4000

6000

8000

10000

12000

2005 2020 2035 2050

EJ



0

2000

4000

6000

8000

10000

12000

2005 2020 2035 2050

EJ


In a recent WEC study four scenarios have been evaluated to characterize the global fuel mix of the future:In all four scenarios, coal is still needed in the year 2035 and in the year 2050 to produce electricity.

Accessib

ilit

y

Accep

tab

ilit

y

By 2035, the number of people withoutaccess to modern energy services can behalved from two to one billion.

By 2050, this number can be halved againto 500 million.

By 2035, stabilise CO2 emissions and initiate the process of absolute carbon emission reductions.Over the succeeding decades to 2050, steadilyreduce CO2 emissions without compromising theuniversal availability of commercial energyservices.

versus

Consequence: Clean energy technologies like CCS will be a key element for an increasingly robust portfolio of advanced power generation, leading to a truly low carbon world and

maintaining the WEC 3 A´s of Accessibility, Affordability and Acceptability.

WEC

Clim

ate

Sta

tem

en

t

http://www.worldenergy.org/


E.ON’s European generation portfolio is dominated by nuclear power and hard coalGeneration E.ON European Market Units 2007

E.ON Europe

UK

nuclear hard coal lignite gas /oil hydro renewable

44%

55%

29%

29% 7%

1%

5%29%

Sweden

3%

67%27%

Germany

5%

25%

8%

0%

6%

56%

Spain

18%4%

67%

Italy75%

18%

Russia85%

15%

Netherlands

35%

65%

France100%


E.ON is setting itself challenging CO2 reduction targets

Options for future generation

1990

0.72

2006 Target2030

- 50 %

0.49~ 0.36

in t/MWh

E.ON’s specific CO2 emissions

generation today 50% reduction of CO2

emissions compared to 1990 Until 2030 reduction

down to 360 g/kWh

nuclear

gas /oil

renewablesincl. hydro

coal

Development of new technologies

within innovate.on initiative

maintain shareof nuclear

increase share ofrenewable energy

introduce CCS

increase efficiency


Contents






Fuel type: Natural gas Power (electr.): 340 MW,

later 530 MW

Efficiency: > 60% Location: Irsching Using existing infrastructure Start of test phase: End 2007 End of test phase: Mid 2009 Increasing power to 530 MW End of second test phase:

2011

Gas plant Irsching 4

Hard coal plant 50plus

Fuel type: Hard coal Power (electr.): > 500 MW

Efficiency: > 50 % Location:

Wilhelmshaven Investment: > 1 billion € Material sciences until 2010

700°C-technology makespost-combustion capture competitive

Constructions starts in 2010 Production begins in 2014


Contents






Pre Combustion Capture

Availability,Process integration

E.ON‘s CCS Technology Projects – a Selection Post Combustion Capture Improved scrubbing

processes and integration

CO2 storageGeological research, legal frameworkCO2 pilot in Germany, 30 MWel, 2014

ADECOSOxyCOAL-ACOxyfuel Test rig UK

Test rigsSmall pilots, 201030 MWe pilot, 2014

COORIVAFeasibility KillingholmeFutureGen, 2012

OxyfuelOptimisation steam generator design

O2/CO2 Flame

HOW will a promising technology roadmap look like ?


CO2-Avoidance Cost of developed Technologies by 2020

OxyfuelUSC with cryogenic air separation

Post-combustion captureMEA scrubbing1) and alternative processes2)

Pre-combustion captureIGCC with CO shift und CO2 scrubbing

CO2-avoidance cost [€/t ]

2)

5020 30 40

1)

(in

cl.

transp

ort

& s

tora

ge)

CO2-Price > 35 €/t ‚necessary‘ to make CCS economicaly viable All Technologies have significant cost reduction potential Winning technology not visible today Post Combustion Capture needs advanded processes to be competetive


E.ON‘s Commitment to Capture Readiness

Capture Readiness = technical feasibility for future CCS retrofit

Ensure all E.ON new built coal-fired power plants to be “capture ready”

Push R&D activities on the way to optimise CCS processes

Take final decision once competetive technology enters the market

System

Component Integration

Available supply and disposal capacities

Infrastructure

Assigned space for CCS components

Cooling of CO2 scrubber ensured

CO2 transport and storage

Detailed concept for long-term operation

capture readyOptimum degree of readiness must be found to mitigate risks:

efficiency loss restricted technology choice large early investments

none max? limited retrofitability time constraints


Contents






CCS Roadmap via Post CC and Storage by 2020

2008 20202010 2012 2014 2016 2018

2nd Generation Post Combustion Capture

Demo Size500 MWel

ca. 5 Pilot Plants 0 – 5 MWel

assessment,selection

Large Pilot30 + X MWel

optimization,scale-up

Demo Storage> 3 Mill. t/a

CO2 Storage in saline aquifers

optimization,scale-up

screening, exploration,engineering, construction

Pilot Storage~ 0.3 Mill. t/a

UK Competitionup to 300 MWel

Possible intermediary step


BerlinAmsterdam

Karlshamn

HeydenWilhelmshaven

London

7 MWel

2009

5.5 MWel

2009/10

7 MWel

2009/100.05 MWel

2009

3,0 MWel

2008

0.5 MWel

Mai 2008

w. Electrabel 1 MWel, 2009

Maasvlakte

Kopenhagen

Phase I of E.ON’s broad programme to develop 2nd generation post combustion capture with world market leaders ongoing

R&D CCS-budget with a commitment of about 100 Mio. Euro

UK Government CCS Competition entry

Kingsnorth


Key Challenge: Overcoming the Economical Barrier

Research & DevelopmentPhase

DemonstrationPhase

Lack of Technological Maturity

ImplementationPhase

Economic Viability

2010

20-4

0

€/t

Diversified and Prioritised R&D

2015 2020

Range ofCO2 MarketValue

Fin

an

ce G

ap

Limited Time Period

CO2 Avoidance

Cost

10-12 EU CCSDemo Plants

need 6-10 €bn financial support


Contents






Diversified portfolio High efficiency power plant

Maintain E.ON’s diversifiedgeneration portfolio- Renewable energy sources- Efficiency- CCS- Nuclear

High priority No regret strategy Active development Demonstration in 2014

CCS technology

Capture Readiness forall new build power plants

Active R&D push for CCS

Foresighted technology radar

Further E.ON activities: Assess landscape of

available technologies Diversified R&D approach

E.ON pursues a manifold strategy to reduce the CO2 footprint

Documents

CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES View of a Generator Eckhardt Rümmler London, 15th September 2008