Transcript NG-CCS an Important Option in Second Half of Century in

Commercialization Process for CCS on Natural Gas
Power Systems
Economics of Natural
Gas CCS
USEA Workshop on Technology Pathways Forward for Carbon Capture & Storage
on Natural Gas Power Systems
22 April 2014, Washington DC
Haroon S. Kheshgi, ExxonMobil Research and Engineering Company
NG-CCS an Important Option in Second Half of
Century in Least-Cost Climate Policy Scenarios
• Models show CCS to be an
important option along with
demand reduction,
renewables, and nuclear
power
• Models assume
– Future cost of options
– Global price on carbon
– Technology availability
worldwide
– Public acceptance
– No significant barriers to
implementation
• Mandating high-cost CCS
• Bypasses lower cost
options
• Endangers public
support
Source: IPIECA (2013)
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Operating Large Scale CCS Projects:
Zero Experience with NG-Power-CCS
Location
Anthropogenic
CO2 Source
Storage
Economic
Driver
Algeria
Gas processing
saline formation
Demo
Brazil - Lula Field
Gas processing
EOR
EOR
Norway - Sleipner
Gas processing
offshore saline formation
C tax
Norway - Snohvit
Gas processing
offshore saline formation
C tax
United States (TX) - Century
Gas processing
EOR
EOR
United States (TX) - Val Verde
Gas processing
EOR
EOR
United States (WY) - LaBarge
Gas processing
EOR
EOR
United States (WY) - Lost
Cabin
Gas processing
EOR
EOR
United States (KS) - Coffeyville
Coke to fertilizer
EOR
EOR
United States (ND)/ Canada Weyburn-Midale
Coal to syngas
EOR
Demo/EOR
United States (OK)- Enid
Gas to fertilizer
EOR
EOR
United States (TX) – Port
Arthur
Methane to hydrogen
EOR
EOR
Source: GCCSI 2014 The Global Status of CCS
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Cost Estimation: Perspectives
on Cost Assumptions
• Lack of technology maturity
– Affects cost, and adds uncertainty
• First-of-kind plant raises cost
• Capital charges
– Total erected cost: M & L +installation + offsites +
contingencies…
+ Retrofits raise complexity and installation + offsites
+ Indirect cost rise in proportion to direct costs
– Potential for innovation to decrease cost
– Cost of capital (financing) must be assumed to
estimate cost of emissions avoided
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Electricity Cost from Gas and
Coal Generation
• Chart shows zones of lowest levelized cost of electricity (LCOE) for gas
vs. coal generation
– Lowest cost depends on fuel prices and CO2 cost
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Electricity Cost from Gas and
Coal Generation with CCS
• Chart shows zones of lowest LCOE including CCS options
– Boundaries represent avoided CO2 cost between generation technologies
– Gas CCGT and CCGT-CCS lower LCOE than coal-CCS over a wide range of
gas prices
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Studies Confirm Broad Economic Window for Gas:
Gas-CCS Only Attractive Above ~$100/t CO2
Source: IPIECA (2013)
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Summary
• Current operating facilities rely on a combination of
– low cost (e.g. gas processing)
– co-benefits (e.g. EOR)
– high CO2 cost (e.g. Norway’s carbon tax)
• Broad economic window for gas and gas-CCS, therefore, an attractive
long-term option
• Current gas-power-CCS technology
– not demonstrated successfully
– not attractive until CO2 costs above ~$100/t CO2
Recommendations:
• Advance capture technologies through RD&D to lower cost for powergen
• Address barriers to CCS that raise costs or risks to CCS investments
– Sound regulatory framework for CCS
– Clear and equitable rules on CCS long-term responsibility
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Electricity Cost including
Nuclear
•
Nuclear Chart overlays nuclear zone of lowest LCOE on gas and coal zones
•
Nuclear dominates coal-CCS, with lower LCOE at all CO2 costs
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Supercritical
Coal-CCS
Gas CCGT-CCS
CO2 Cost $/T
100
Nuclear
80
60
Gas CCGT
40
$28/tCO2
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Supercritical Coal
0
Gas Price, $/MBtu
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