When will CCS be commercially

viable?

Presentation to CCS in Next Decade

London, 20 June 2011

Joan MacNaughton

© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Key Messages

• CCS essential and affordable on both gas and coal.

• Fossil power with CCS costs no more than renewables.

• Alstom will have a commercial offering by 2015.

• CCS deployment needs further financial support:

– (national) feed-in tariffs; and

– (EU) more funding and financing for demonstration projects

• EU industry has led in this high technology area. But others including China are making faster progress on demonstrations.

• If we do not accelerate, we will lose a huge industrial growth opportunity.

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

The need for CCS on coal and gas

• IPCC 2007: Max GHG 450 ppm for +2°C MAX

• Must decarbonise power generation

• CCS necessary because:

2035: fossil still 50%

Fossil will remain strong until ~2050

IEA : -2,7 GtCO2 CCS in 2035

EU Power Emissions: 42% from coal, 56% from gas

Source: IEA – WEO 2010

3

© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

The need for CCS on coal and gas

450CPS

671

EUROPE - MtCO2

Current Policies Scenario

and 450 Scenario to 2035

COAL

104

495

130

450CPS

GAS

CCS needed on both coal and gas, but will it be competitive?

4

Source: IEA – WEO 2010

© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Total LacqFrance - 30 MWth

Oxy - Gas

Vattenfall Schwarze PumpeGermany - 30 MWth

Oxy - Lignite

Vattenfall JänschwaldeGermany - 250 MWe

Oxy - Lignite

Dow Chemical Co. USA, West Virginia

Advanced Amines - Coal

AEP MountaineerUSA - 58 MWth

Chilled Ammonia - Coal

Coming

TCM MongstadNorway - 40 MWth

Chilled Ammonia - Gas

TransaltaCanada - >200 MWe

Post - Coal

Alstom BSF WindsorUS - 15 MWthOxy - Coals

CET - Getica (Turceni)Romania – >250MWe

Chilled Ammonia - Lignite

Selected for receiving EEPR fundingSelected by Alberta and Federal Canadian funding

Selected by US DOE to receive CCPI Round 3 funding

EDF – Le HavreFrance – 5 MWth Adv.

Amines - Coal

PGE BelchatowPoland – 260 MWe Adv.

Amines - Lignite

Pre-commercial Projects

AEP MountaineerUSA – 235MWe

Chilled Ammonia - Coal

Alstom activity on pilots and demonstrations 1st and 2nd generation CCS

RFCS EU - Darmstad Germany – 1 MWth

Chemical looping - Coal

DOE/Alstom WindsorUS – 3 MWth

Chemical looping - Coal

Drax - SelbyUK - 426 MWe

Oxy – Hard Coal

2nd GEN

2nd GEN

NER300 appl.

NER300 appl.

NER300 appl.

NER300 appl.

Operating

5

© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

• 90 % CO2 Capture and 99% CO2 Purity demonstrated

• Feasibility of integrated capture – transport – storage established on a power

plant

• Energy penalty < 20%, and will approach 15%

• Solid base for design and cost control

• Oxy and Post have good potential

14%

15%

16%

17%

18%

19%

20%

2010 2015 2020 2025 2030 2035

CCS OXY

CCS PCC

15%

CCS PLANT – ENERGY PENALTY

% AGAINST MWe net REF PLANT

Hardcoal CCS commercial plant size - Europe

Source: Alstom

Pilots show that CCS works

6

© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Total LacqFrance - 30 MWth

Oxy - Gas

Vattenfall Schwarze PumpeGermany - 30 MWth

Oxy - Lignite

Vattenfall JänschwaldeGermany - 250 MWe

Oxy - Lignite

Dow Chemical Co. USA, West Virginia

Advanced Amines - Coal

AEP MountaineerUSA - 58 MWth

Chilled Ammonia - Coal

Coming

TCM MongstadNorway - 40 MWth

Chilled Ammonia - Gas

TransaltaCanada - >200 MWe

Post - Coal

Alstom BSF WindsorUS - 15 MWthOxy - Coals

CET - Getica (Turceni)Romania – >250MWe

Chilled Ammonia - Lignite

EDF – Le HavreFrance – 5 MWth Adv.

Amines - Coal

PGE BelchatowPoland – 260 MWe Adv.

Amines - Lignite

Pre-commercial Projects

AEP MountaineerUSA – 235MWe

Chilled Ammonia - Coal

RFCS EU - DarmstadGermany – 1 MWth

Chemical looping - Coal

DOE/Alstom WindsorUS – 3 MWth

Chemical looping - Coal

Drax - SelbyUK - 426 MWe

Oxy – Hard Coal

2nd GEN

2nd GEN

NER300 appl.

NER300 appl.

NER300 appl.

NER300 appl.

Operating

CCS Experience: 13 Pilot/Demonstrations

Component Manufacturer

Alstom Know-how for a

grounded CCS Cost Study

A comprehensive study of those costs

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

0

1 0

2 0

3 0

40

5 0

6 0

7 0

8 0

9 0

1 0 0

42€

CCSREF

2015 2030

Transport

&Storage

Fuel Cost

CCS/Coal REF

Capex & Opex

43€

65€

55€

CCSREF

Euro / MWh net

REF

2015 2030

GAS - EUROPE

84€

49€ 50€

73€

CCSREF CCS

HARDCOAL - EUROPE

Source: Alstom – PCC

CCS/Gas REF

Capex & Opex

+71%

+46%

+49%+33%

0

1 0

2 0

3 0

40

5 0

6 0

7 0

8 0

9 0

1 0 0

42€

CCSREF

2015 2030

Transport

&Storage

Fuel Cost

CCS/Coal REF

Capex & Opex

43€

65€

55€

CCSREF

Euro / MWh net

REF

2015 2030

GAS - EUROPE

84€

49€ 50€

73€

CCSREF CCS

HARDCOAL - EUROPE

Source: Alstom – PCC

CCS/Gas REF

Capex & Opex

+71%

+46%

+49%+33%

Cost increase <50% by 2030 for both Coal and Gas

Cost of CO2 avoided: 37 €/t for coal and 49 €/t for gas in 2030

CCS essential and affordable on both gas and coal

CCS Cost of

Electricity Impact

is lower on gas

than on coal !

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

8465

0

100

200

300

400

Nuclear

Hydro

Geo

ther

mal

CCG

T CCS 2

015

Ons

hore

Win

d

PC Hard

coal C

CS 201

5

Offs

hore

Win

d

Solar

PV

Solar

Ther

mal

€ / MWh CoE - Low Carbon technologies Europe in 2011-2016 period

Reference case

Source : Alstom analysis 2011. CCS 2015 costs, including on shore T&S and CO2 price (Flue Gas Recirculation case for CCS

Gas CC, average Amine/Oxy for CCS Hardcoal)

CoE for CCS on Coal and Gas fired power competitive

even without including the system costs of intermittent generation

Fossil power with CCS costs no more than renewables

Cost of CCS Gas < Onshore Wind < CCS Coal

CCS < Offshore Wind and Solar

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Funding, financing and/or FITs needed in short/medium term. Including for

current demonstration projects.

Funding: further EU and national support needed

CCS can be

commercially

viable by ~ 2025

Significant

economic gap

exists before then

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Global market for CCS is huge. EU industry will lose out to Asian

competitors if we don‟t deliver CCS fast in Europe.

Selected for funding

12

19

19

2

7

2

3

Asia

China

India

Russia & CIS

Europe

MEA

NAM

LAM

Global Power Market in next 5 years

64 Nr of CCS projectsSource: GCCSI

Wind

Hydro

Nuclear

Coal

Gas

Solar

Other renewable

Huge industrial opportunity

CCS MARKET

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Huge industrial opportunity – will we take it?

Global

• IEA Roadmap: 2020: 100 projects. 2050 – 3,400. Approx 110 p.a.

• GCCSI: Govts supporting 25 large scale projects. $11.7 bn allocated

to specific large-scale demos.

UK

• Four „demos‟ by 2020.

• Up to 18 GW investment through 2020s (Source: Poyry)

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Policy Conclusions

• CCS demonstration programmes essential to deliver the necessary learning. Delays directly affect when CCS becomes deployable without subsidy.

• Demonstration projects need further financial support. 50% limit on existing EU funding may cause some projects not to proceed. EU and EIB together should be ready to take on greater share of risk of demo projects.

• In particular, CCS needs ongoing (eg feed-in tariff) support to put it on an equal footing with other low-carbon energy technologies.

• Progressive tightening of EU ETS could well deliver a carbon pricemaking CCS commercially viable sometime in 2020s and certainly by2030, allowing progressive elimination of subsidies.

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© ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Key Messages

• CCS essential and affordable on both gas and coal.

• Fossil power with CCS costs no more than renewables.

• Alstom will have a commercial offering by 2015.

• CCS deployment needs further financial support:

– (national) feed-in tariffs; and

– (EU) more funding and financing for demonstration projects

• EU industry has led in this high technology area. But others including China are making faster progress on demonstrations.

• If we do not accelerate, we will lose a huge industrial growth opportunity.

• ……. THE CLOCK IS TICKING

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