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CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES View of a Generator Eckhardt Rümmler London, 15th September 2008
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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
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Page 3CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG The European energy sector contributes with 1,400 Mt CO 2 approx. 6 % to the global CO2 emissions Source: UNFCCC Manufacturing Industries Trans- portation Residential and Commercial Source: UNFCCC GHG Inventory CO 2 emissions are not a EU but a worldwide issue Energy Industries: 37% Global distribution of CO 2 emissions 2003 EU CO 2 emissions by sectors
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Page 4CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG WEC: Fossil fuels will have a role for some time to come Sources: http://www.worldenergy.orghttp://www.worldenergy.org “Energy Policy Scenarios to 2050” (WEC, 2007) “The energy industry unveils its blueprint for tackling climate change” (WEC statement 2007) 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. Accessibility Acceptability By 2035, the number of people without access to modern energy services can be halved from two to one billion. By 2050, this number can be halved again to 500 million. By 2035, stabilise CO 2 emissions and initiate the process of absolute carbon emission reductions. Over the succeeding decades to 2050, steadily reduce CO 2 emissions without compromising the universal availability of commercial energy services. 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 Climate Statement
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Page 5CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG E.ON’s European generation portfolio is dominated by nuclear power and hard coal Generation E.ON European Market Units 2007 E.ON Europe UK nuclearhard coallignitegas /oilhydrorenewable SwedenGermany SpainItalyRussia Netherlands France
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Page 6CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG E.ON is setting itself challenging CO 2 reduction targets Options for future generation 1990 0.72 2006 Target 2030 - 50 % 0.49 ~ 0.36 in t/MWh E.ON’s specific CO 2 emissions generation today 50% reduction of CO 2 emissions compared to 1990 Until 2030 reduction down to 360 g/kWh nuclear gas /oil renewables incl. hydro coal Development of new technologies within innovate.on initiative maintain share of nuclear increase share of renewable energy introduce CCS increase efficiency
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Seite 7CARBON 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
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Seite 8CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG 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 sciencesuntil 2010 700°C-technology makes post-combustion capture competitive Constructions starts in2010 Production begins in2014
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Seite 9CARBON 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
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Seite 10CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG Pre Combustion Capture Availability, Process integration E.ON‘s CCS Technology Projects – a Selection Post Combustion Capture Improved scrubbing processes and integration CO 2 storage Geological research, legal framework CO 2 pilot in Germany, 30 MW el, 2014 ADECOS OxyCOAL-AC Oxyfuel Test rig UK Test rigs Small pilots, 2010 30 MW e pilot, 2014 COORIVA Feasibility Killingholme FutureGen, 2012 Oxyfuel Optimisation steam generator design O 2 /CO 2 Flame HOW will a promising technology roadmap look like ?
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Seite 11CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG CO 2 -Avoidance Cost of developed Technologies by 2020 Oxyfuel USC with cryogenic air separation Post-combustion capture MEA scrubbing 1) and alternative processes 2) Pre-combustion capture IGCC with CO shift und CO 2 scrubbing CO 2 -avoidance cost [€/t ] 2) 50203040 1) (incl. transport & storage) CO 2 -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
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Seite 12CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG 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 CO 2 scrubber ensured CO 2 transport and storage Detailed concept for long-term operation capture ready Optimum degree of readiness must be found to mitigate risks: efficiency loss restricted technology choice large early investments nonemax ? limited retrofitability time constraints
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Seite 13CARBON 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
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Seite 14CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG CCS Roadmap via Post CC and Storage by 2020 2008 2020 20102012 201420162018 2 nd Generation Post Combustion Capture Demo Size 500 MW el ca. 5 Pilot Plants 0 – 5 MW el assessment, selection Large Pilot 30 + X MW el optimization, scale-up Demo Storage > 3 Mill. t/a CO 2 Storage in saline aquifers optimization, scale-up screening, exploration, engineering, construction Pilot Storage ~ 0.3 Mill. t/a UK Competition up to 300 MWel Possible intermediary step
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Seite 15CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG Berlin Amsterdam Karlshamn Heyden Wilhelmshaven London 7 MW el 2009 5.5 MW el 2009/10 7 MW el 2009/10 0.05 MW el 2009 3,0 MW el 2008 0.5 MW el Mai 2008 w. Electrabel 1 MW el, 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
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Seite 16CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG Key Challenge: Overcoming the Economical Barrier Research & Development Phase Demonstration Phase Lack of Technological Maturity Implementation Phase Economic Viability 2010 20-40 €/t Diversified and Prioritised R&D 20152020 Range of CO 2 Market Value Finance Gap Limited Time Period CO2 Avoidance Cost 10-12 EU CCS Demo Plants need 6-10 €bn financial support
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Seite 17CARBON 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
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Seite 18CARBON CAPTURE AND STORAGE FINANCING CHALLENGES AND OPPORTUNITIES 15th September 2008 E.ON AG Diversified portfolioHigh efficiency power plant Maintain E.ON’s diversified generation portfolio - Renewable energy sources - Efficiency - CCS - Nuclear High priority No regret strategy Active development Demonstration in 2014 CCS technology Capture Readiness for all 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 CO 2 footprint
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