1. T HE RELEVANCE OF CCS AS A CLIMATE POLICY INSTRUMENT IN VIETNAM Presented by: Nhan T. Nguyen * (co-authors: Minh Ha-Duong and Didier Bonijoly) * Centre International de Recherche sur l’Environnement et le Développement (CIRED/EHESS) *Van Xuan Center of Research in Economics, Management, and Environment (VCREME) The 30 th USAEE/IAEE North American Conference Washington DC, 12 October 2011

2. C ONTENTS Promising storage capacity estimates 1 E IRP simulation: Expansion of coal, next 30 years 2 Potential of CCS at Power Plants in 2040 3 4 2 Introduction 5 Concluding remarks

3. P RESENT SITUATION 3  2000-2009:7.3 yr -1 GDP growth  331,212 km 2,3200 km coastline  87 million population, 2009  Power generation (2000-2009) grew faster Capacity (2009) Generation (2009) Average growth rate Total generationThermal generation 18.9 GW85 TWh15%19%

4. T RENDS 4  Demand growth: 13.5%-16.6%, next decade  Baseline scenario: coal generation share: 32% (2015) to 68% (2040) Source: Institute of Energy (2008), NLDC (2010) Power generation sources by 2015 Hydro Coal Oil, Gas Wind, Solar, Geothermal Nuclear Biomass Primary fuel supplies for electricity sector

5. P ROMISING GEOLOGICAL STORAGE OPPORTUNITIES Most promising fields: Enhanced Oil Recovery ( EOR ): Cuu Long river basin Enhanced Coal Bed Methane Recovery ( ECBM ): Quang Ninh coal basin Storing CO 2 into depleted oil fields: in Cuu Long, Song Hong, and the North end 5 Figure: 5 major basins in Vietnam identified for storage opportunities Specification requirement: Sediment formations deeper than 1 km They should be 20 kilometers away from major faults or known oil fields No more than 100 kilometers away from a CO2 source of > 2.5 MtCO2/yr

6. Largest storage capacity: 20 to 60 Gt of CO 2 Utsira reservoir

7. I NTEGRATED R ESOURCE PLANNING (IRP) 7 IRP Model Externality cost CCS constraints Fuels constraints Optimal expansion plan Probabilistic estimation of system Supply-side & CCS Data Carbon values Plant Emission Factors CO 2, SO 2 and NO x Emissions Total planning Cost Structure of technologies & Fuels mix Electricity prices (LRAC &AIC) Demand-side Data Load curve & load demand Price elasticity of demand Source: Shrestha and Nguyen, 2003 The analytical flowchart of the IRP model

8. C ARBON PRICES SCENARIOS 8 US$/tCO 2 20102040 Low ( LCV ) 520 Moderate ( MCV ) 535 High ( HCV ) 550 Very high (V HCV )560

9. 9 Source: the IRP simulation results E XPANSION OF COAL GENERATION, NEXT 30 YEARS Cumulative coal consumption, 2010- 2040 (million tons) Greater dependence on large-scale coal for future expansion, 2010-2040 Cumulative electricity generation, 2010-2040: 14,106TWh

10. B ASELINE WITHOUT CCS : E MISSIONS FROM P OWER G ENERATION 10 Cumulative emissions (2010-2040) CO27.2 Gt SO215.3 Mt NOx8.0 Mt Source: the IRP simulation results The Electricity and Heat sector would emit 300 MtCO2/yr (2010-2040)  3 tCO2/yr/capita. This level is not sustainable.

11. C OSTS OF CCS IN THE IRP SIMULATION FOR VIETNAM Integrating CCS into the IRP model Power generation plants with more than 2.5 Mton of CO 2 emissions per year opportunity to be selected for carbon capture and storage deployment 11 Sub PC- CCS Sub PC- CCS ready Super PC- CCS Super PC- CCS ready IGCC- CCS NGCC- CCS 2025 Reference plant TCR (US$/kW) 1184 1328 1581684 Capture plant TCR (US$/kW) 194018342293218420501100 Cost of CO2capture (US$/tCO2)42.139.243.840.82839.3 Cost of CO2 avoided (US$/tCO2)45.442.547.144.131.341.9 2040 Reference plant TCR (US$/kW) 1100 1200 1390671 Capture plant TCR (US$/kW) 18001702186017711880991 Cost of CO2 captured (US$/tCO2)37.234.531.228.723.836.1 Cost of CO2 avoided (US$/tCO2)40.037.333.931.526.538.6 Costs of capture based power plants Source: the IRP simulation results

12. IRP RESULTS : CCS AS A ABATEMENT OPTION No CCS plants selected in Low Carbon Value scenario (LCV) 12 Source: the IRP simulation results  CCS enters after 2030 at ≥25US$/tCO 2 : but few  40-60US$/tCO 2 : 32% capacity, 20% abatement

13. N OT CHEAPER THAN RENEWABLES BUT CCS+EOR COULD BE COST - EFFECTIVE ABATEMENT 13  renewables (6-10 US$/tCO 2 ) cheaper than CCS (≥ 25 US$/tCO 2 ) in IRP model  CCS + enhanced oil recovery (EOR)  net benefits 10-16 US$/tCO 2 based oil price 2003 (IPCC, 2005)  Proposal at White Tiger Oil Field in Vietnam: CO 2 capture from (NGCC) plants, transport pipeline, storage in offshore/onshore fields, enhanced oil recovery

14. C ONCLUDING REMARKS Vietnam has a promising carbon emissions storage capacity CCS not cost-effective if carbon price below 25 US$/tCO 2 by 2030. But become a key abatement option (20%) if the price increases 40-60 US$/tCO 2 from 2030 to 2040 Without EOR, CCS is not cheaper than renewables Need for new policy 14