1. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Technologies and Costs of CO 2 Sequestration Jacek Podkanski, Dolf Gielen International Energy Agency Policy and Strategy of Sustainable Energy Development for Central and Eastern European Countries until 2030 Warsaw, Poland, 22-23 November 2005

2. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Carbon Capture & Storage Research, Development, Demonstration and Deployment ● US: FutureGen ● EU: Hypogen ● Canadian Clean Power Coalition ● Australia ● Germany: COORETEC ● UK ● Norway ● France ● Italy ● Japan,… Carbon Sequestration Leadership Forum International Energy Agency Intergovernmental Panel on Climate Change (IPCC) World Energy Council Bilateral Agreements, … Alstom ExxonMobil BP EniTecnologie SpA ChevronTexaco EPRI Shell International RWE AG Total Rio Tinto, Schlumberger,…

3. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Carbon Capture & Storage at the International Energy Agency IEA Working Party on Fossil Fuels IEA Greenhouse Gas R&D Programme IEA Clean Coal Centre IEA Coal Industry Advisory Board Secretariat

4. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Prospects for CO 2 Capture and Storage What is CO 2 capture & storage? What are the costs? How does the cost- effectiveness of CCS compare to other emission reduction options? What will it take to bring CO 2 capture and storage to market?

5. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios What is CO 2 capture & storage? Capturing CO 2 from the gas streams emitted during electricity production, industrial processes or fuel processing Transporting the captured CO 2 by pipeline or in tankers Storing CO 2 underground in deep saline aquifers, depleted oil and gas reservoirs or unminable coal seams

6. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Capture – Technology Status CO 2 capture is a proven technology It reduces emissions by 85-95% But its energy efficiency can be further improved and cost must be reduced This requires integrated power plant and CO 2 capture designs Most of these advanced designs are not yet proven on a commercial scale Examples: new chemical absorbents, oxyfueling, hydrogen combined cycles, IGCC, USCSC, chemical looping, fuel cells

7. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Capture - Opportunities Fossil fueled power plants Biomass fueled power plants Certain industrial processes Synfuels production Natural gas processing

8. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Aquifer storage: demonstration CO 2 -EOR: demonstration CO 2 -EGR: pilot CO 2 -ECBM: pilot Storage – Technology Status

9. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Storage - Capacity 1,000-10,000 Gt aquifer storage capacity 100-120 Gt depleted oil fields/EOR 700-800 Gt depleted gas fields/EGR 20 Gt ECBM Fixation mechanisms reduce risk Monitoring is feasible and cheap

10. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Costs - overview Capture (incl. compression) Current: 5 – 50 USD/tCO 2 av. Future: 5 - 30 USD/tCO 2 av. Coal-fired power plants10 – 25 USD/tCO2 av. Gas-fired power plants25 – 30 USD/tCO2 av. Transportation 2 – 20 USD/tCO 2 av. Injection 2 – 50 USD/tCO 2 av. Revenues -55 – 0 USD/tCO 2 av. Total -40 – 100 USD/tCO 2 av.

11. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Capture (electricity) - adds presently 2-3 UScents/kWh - long term 1-2 UScents/kWh Fuel, technology Electric efficiency [%] Capture costs [$/t CO 2 capt] Electricity costs [Mils/kWh] Additional electricity costs [Mils/kWh] Likely technologies Coal, steam cycle, CA (2010)312451.021.9 Coal, steam cycle, membranes +CA (2020)362146.317.1 Coal, USC, membranes +CA (2030)421749.017.5 Coal, IGCC, Selexol (2010)382052.314.9 Coal, IGCC, Selexol (2020)401141.08.0 Gas, CC, CA (2010)472936.810.7 Gas, CC, Selexol, OxF (2020)512534.89.6 Black liquor, IGCC (2020)25427.94.4 Biomass, IGCC (2025)332396.121.5 Speculative technologies Coal, CFB, Chemical looping (2020)391438.214.7 Gas, CC, Chemical looping (2025)563334.59.3 Coal, IGCC & SOFC (2035)561349.07.7 Gas, CC & SOFC (2030)662839.28.6

12. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Costs – general comments CCS costs competitive with other CO 2 abatement options Coal without CCS has no future in a CO 2 - constrained world Electricity from coal or gas-fired power plants with carbon capture and storage is still cheaper than most renewables (fuel price dependent) Efficiency first

13. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios How does the cost-effectiveness of CCS compare to other emission reduction options? Scenario analysis Scenarios produced using IEA’s Energy Technology Perspectives (ETP) model Based on ETSAP-MARKAL Systems engineering/partial equilibrium model Global, 15-regions Detailed representation of technologies on both the demand and supply sides (1500 new techs)

14. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Model Covers carbon capture and storage and competing emission mitigation options; ETP BASE scenario calibrated with WEO Reference Scenario; Detailed scenario analysis and sensitivity analysis to map cost-effective CCS potentials and uncertainties.

15. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Global CO 2 emissions

16. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Emission stabilisation Marginal CO 2 abatement cost

17. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios CO 2 price

18. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Capture at various CO 2 prices

19. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Share of CCS in total CO 2 emissions mitigation

20. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios CO 2 capture by process area

21. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios CO 2 capture by technology

22. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios IGCC and steam cycles Steam cycles and IGCC are competing options for coal-based electricity generation with CO 2 capture and storage Without synfuel cogeneration in IGCC installations the CCS potential declines by 30%

23. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios CO 2 emissions from electricity generation

24. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Electricity production mix

25. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Electricity production by power plants fitted with CCS, by region

26. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Fuel market implications: CCS impact on coal use at 50$/t CO 2 CCS impact 2050: 50$/t CO 2 results in 80% or 40% decline in coal use, depending on availability of CCS

27. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Overview of sensitivity analysis results (influence on CO 2 captured and stored in 2050) CCS only in OECD countries-50% to -80% CO 2 pricing delayed by 15 years-10% Different CO 2 pricing (25 – 100 USD/t CO 2, basis: 50 USD) -50% to +30% Nuclear power allowed to grow-40% No IGCC for synfuel cogeneration-30% Cheaper renewables because of investment policies & technology learning -50% Additional electricity savings (10% more)-15% GDP growth 2.2% to 3.2% (basis: 2.8%)-15% to +15%

28. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Challenges RD&D gaps Public awareness and acceptance Legal and regulatory framework Long-term policy framework and incentives

29. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios RD&D gaps More proof of storage needed CO 2 capture demonstration needed 0.5-1 bln per demonstration plant Present spending 100 MUSD/yr A fivefold increase of RD&D needed

30. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Long-term policy framework and incentives In addition to the acceleration of RD&D funding, countries should create a level-playing field for CCS alongside other climate change mitigation technologies. This includes ensuring that various climate change mitigation instruments, including market-oriented trading schemes, are adapted to include CCS.

31. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios Conclusions CCS can play a key role in addressing global warming  mainly through coal plants in coal-rich regions  but also some natural gas opportunities Carbon incentives are needed, but also:  Proven technology  Acceptable storage

32. PROSPECTS FOR CO 2 CAPTURE AND STORAGE Energy Technology Scenarios jacek.podkanski@iea.org Thank you