Launching of The Second European Climate Change Programme (ECCP II)

Launching of the second European Climate
Change Programme (ECCP II)

Stakeholder Conference Brussels
24th October 2005
Lars Strmberg
Vattenfall AB
Stockholm/Berlin
Vattenfall AB
Whos got the problem ?
Vattenfall AB
CO2 free power plant
ECCP I - experiences
Vattenfall AB
Pi
ct
u
Cost and Potential of options to reduce CO2 emissions re
Principal example
Cost for carbon dioxide

avoidance
is
fro
Solar
[EUR/ton CO2]
Wind
100
Hydro
Biofuel
Late change coal
Reforestation
CO2 sequestration
Oil to gas
50
Coal to coal
Coal to gas
Potential
[Percent]
0
0
20
40
60
80
The picture will look different when different time

perspectives are adopted
200007
Vattenfall AB
100
20
00
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
Vattenfall AB
Change from coal to gas

Introduce more efficient coal power technology
Wind power
Biofuels, especially in the heat sector
More CHP
5
Cost and Potential of options to reduce CO2 emissions until 2010

Derived from ECCP Energy Supply Preliminary report.
avoidance
Solar
[EUR/ton CO2]
100
Wind
Coal to Coal
CHP
Biomass heat
CO2 sequestration
Coal to gas
50
Biomass heat
Potential
[Percent]
0
0
20
40
60
Methane mines
Vattenfall AB
80
100
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

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

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
Emission Trading
Emission Trading
sets the commercial
framework for new
technology in Europe
Vattenfall AB
10
European CO2 trading system Sept. 2005
Vattenfall AB
11
Allocations in the European trading system

Intotal12000unitsisincludedinthetradingsystem.IntheNationalallocationplans2100Mton/yearor6300
Mtonsforthreeyearshavebeendistributed.Thisistheroofsetforemissions.
Thedeficitiscalculatedto180Mtonfor3years.Thepowerindustryhasadeficitof360Mton.Othersectorshave
anoverallocation.
Other
Cement, Lime, Glass
Oil and Gas
Metals
Pulp and Paper
Public Power and Heat
Total
-100
-50
50
100
150
200
Mio. t CO2
Vattenfall AB
12
250
300
350
400
Marginal cost vs. Reduction of CO2 emissions in EUR/ton CO2

Source: ECOFYS Economic evaluation of sectorial reduction objectives for climate change
The price in Sept 2005 is about 24 /ton CO2 ???
Vattenfall AB
13
Capture and storage of CO2
Capture and storage
Vattenfall AB
14
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
15
Storage and transport
Vattenfall AB
16
Storage of CO2 in a Saline Aquifer under the North Sea
CO2-injection into
the saline aquifer
Utsira.
(Source:STATOIL)
The Sleipner field. Oil and gas production facilities. (Source: STATOIL )
Vattenfall AB
17
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 fr
Geowissenschaften und
Rohstoffe, Hannover
Vattenfall AB
18
CO2 Transport and storage Schweinrich structure
Berlin
Vattenfall AB
19
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
Reservoir simulation 40 year model
Vattenfall AB
Injection at flanks
20
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
Geological structure modelling. Schweinrich
Vattenfall AB
10 years
200 years
500 years
2000 years
5000 years
10000 years
21
Capture
Vattenfall AB
22
Post-combustion capture
This technology is already commercially available in
large scale (500 MW). It is at present the most expensive
Vattenfall AB
23
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
24
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
25
Total generation cost of electricity with CO2 penalty
Vattenfall AB
26
Generation cost with and without CO2 capture
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27
Electricity generation costs

60,0
Electricity production cost EUR/MWh
50,0
Fuel and
consumables
Fixed O&M +
additional op costs
Running O&M
40,0
30,0
Capital costs
EUR/MWh
20,0
10,0
0,0
Vattenfall AB
PF
CC
PF oxyfuel
28
CC CO2 capt.
Generation costs incl. CO2 costs (20 /ton)

60,0
Electricity Production cost EUR/MWh
50,0
40,0
CO2 penalty
Fuel and
consumables
Fixed O&M +
additional op costs
Running O&M
30,0
20,0
Capital costs
EUR/MWh
10,0
0,0
Vattenfall AB
PF
CC
PF oxyfuel
29
CC CO2 capt.
Avoidance costs of CO2

60,0
Avoidance costs
50,0
40,0
Avoidance cost /ton CO2
CO2 penalty
Fuel and consumables
Fixed O&M + additional op costs
Running O&M
Capital costs EUR/MWh
30,0
20,0
10,0
0,0
PF with CO2 capture
Vattenfall AB
Gas CC with CO2 capt
30
Cost and Potential of options to reduce CO2 emissions

Principal example

avoidance
New Picture 2005 including recent knowledge

Solar
[EUR/ton CO2]
Wind
100
Biofuel El
Hydro
Savings
New efficient coal
Biofuel Heat
Oil to gas
CO2 Capture and Storage
50
Coal to gas
Potential
[Percent]
0
0
200007
Vattenfall AB
20
40
60
31
80
100
Conclusions from analysis - Reduction of CO2

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
Lars Strmberg
AB
VattenfallVattenfall
AB
Corporate Strategies
2003 07 05
32
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
33
Back up
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34
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
35
CO2 storage cost

Storage at Schweinrich of 10 Mton CO2 per year over 40 years:
Fictive cost calculations using tool developed in EU-funded GESTCO project:
Vattenfall AB
36
CO2 transport cost:

Transport to Schweinrich from Schwarze Pumpe power plant:
Vattenfall AB
Distance 320 km
10 Mton CO2 per year over 40 years:
37
Pilot Plant
Vattenfall AB
38
Construction area
Vattenfall AB
39
Boxberg IV
Why Oxy-fuel technology ?
We work with all three (four)
technologies, but:
Vattenfall AB
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
40
Analysis of some
technology options
Vattenfall AB
41
CO2 Free Power Plant: Technology
Choice
The 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
42
Options for reduction of CO2

Specific data for the plants
Specific Investment
costs /kWe
PF
CC
PF
oxyfuel
CC with
capture
1000
550
1425
938
140
100
720
405
180
95
36,5
49
Additional
investment mio
Power output MW
900
500
Energy penalty MW
Efficiency %
Lars Strmberg
AB
VattenfallVattenfall
AB
Corporate Strategies
45
60
2003 07 05
43
Options for reduction of CO2

Common data used for the four plants:
Coal Price
50 $/ton ~ 5,7
/MWh
Gas price
13 /MWh
Depreciation time
25 years
Interest rate
Vattenfall AB
10%
44
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
Vattenfall AB
Emissions from fossil fuels must be reduced

45
Schwarze Pumpe power plant
Vattenfall AB
46

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Launching of The Second European Climate Change Programme (ECCP II)

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Launching of the second European Climate

Change Programme (ECCP II)

Whos got the problem ?

CO2 free power plant

Cost for carbon dioxide

The picture will look different when different time

Reductions of CO2 What ECCP 1 gave

The ECCP 1 work identified a number of measures

Change from coal to gas

Cost and Potential of options to reduce CO2 emissions until 2010

Reductions of CO2 What we have learned (2)

Reductions of CO2 What we have learned (3)

Reductions of CO2 What we have learned (3)

European CO2 trading system Sept. 2005

Allocations in the European trading system

Cement, Lime, Glass

Oil and Gas

Pulp and Paper

Public Power and Heat

Marginal cost vs. Reduction of CO2 emissions in EUR/ton CO2

The price in Sept 2005 is about 24 /ton CO2 ???

Capture and storage of CO2

Capture and storage

The CO2 free Power Plant principle

The CO2 can be captured either

CO2 free power plant

Storage and transport

Storage of CO2 in a Saline Aquifer under the North Sea

Storage Capacity, saline aquifers

CO2 Transport and storage Schweinrich structure

Two pipeline transport routes are

Both routes can be designed to

Structure can contain 1,4 billion ton

Reservoir simulation 40 year model

Due to buoyancy, the CO2

The CO2 spreads in the

Geological structure modelling. Schweinrich

CO2 free power plant

O2/CO2 combustion is the preferred option at present

At present the most competitive and

Total generation cost of electricity with CO2 penalty

Generation cost with and without CO2 capture

Electricity generation costs

Electricity production cost EUR/MWh

Generation costs incl. CO2 costs (20 /ton)

Electricity Production cost EUR/MWh

Avoidance costs of CO2

PF with CO2 capture

Gas CC with CO2 capt

Cost and Potential of options to reduce CO2 emissions

Cost for carbon dioxide

New Picture 2005 including recent knowledge

New efficient coal

CO2 Capture and Storage

Conclusions from analysis - Reduction of CO2

More than enough storage capacity on shore and off shore is at

"CCS is absolutely essential if the world is serious about

CCS could achieve more than half of the emissions