Defining CCS Ready: An Approach to An International Definition

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Chapter 1: Introduction1.4 Proposed CCS Ready DefinitionThe proposed international CCS Ready definition was developed from an analysis of existingCCS Ready literature and legislation, and informed by CCS Ready perceptions discussedabove. The key principles for the proposed definition are:• Integration of All Aspects of CCS. Addressing capture, transport, and storageholistically increases the feasibility of a smooth transition to eventual CCS retrofit.Integration is of particular importance when considering plant site location.• Proactive Identification of Potential Future Barriers. The risk of time delays forthe eventual CCS retrofit would be reduced by identifying potential barriers for a futureretrofit, and by avoiding or preparing to resolve these barriers.• Flexibility. A definition of CCS Ready needs to be flexible, in terms of levels ofstringency, in order to allow jurisdictions across the world to adapt the proposeddefinition based on specific issues applicable in a jurisdiction. An evaluation of advantagesand disadvantages of different levels of CCS Ready requirements can provide a basis forpolicymakers in a jurisdiction to determine the appropriate level of stringency for theirspecific CCS Ready policy.• Economically Acceptable. A CCS Ready definition selected by a jurisdiction mayinclude a requirement to show the economic viability of a retrofit to CCS. 12 This mightmean for example that, during the operating life of the plant, a reasonable probabilityexists that the plant can be retrofitted and operated with CCS at a total costcomparable to the GHG mitigation costs expected to be borne by other plants in thejurisdiction. The plant’s total estimated cost for eventual capture, transport, and storagewould include costs for planning, construction capital, and operating costs, including thetime value of money. 13Exhibit 1-3 summarizes how the research presented in the previous sections was used toformulate the above principles.12 Appendix C presents an approach for policymakers to use to evaluate the economics of a CCS Ready policy.13 The time value of money is the value of money adjusted for the interest earned or paid over the relevant amount of time. Adollar paid in the future must be discounted for interest cost to calculate what it is worth today.23 February 2010 14
Chapter 1: IntroductionExhibit 1-3: Key Principles for CCS Ready Definition and Related ResearchPrincipleIntegration of All Aspects of CCSProactive Identification ofPotential Future BarriersFlexibilityEconomically AcceptableRelated ResearchThe IEA GHG 2007/4 report noted that a part of the “Essential Capture-ReadyRequirements” includes the consideration of “CO2 transport via pipelines to thestorage location, including safe transportability and considerations on shared CO2pipelines (or) ship transport for coastal sites”. 14 The aspect of integrating allelements of CCS Ready to ensure a smooth transition to CCS was also discussedin the EU Directive and the UK Guidance.This principle is based on the “no barriers” approach of the UK Guidance. The UKGuidance takes this approach to ensure that applicants have considered potentialsituations that would hinder the deployment of CCS. This precautionary principleensures that an analysis is conducted to minimize future time delays and potentiallyprohibitive costs to the deployment of CCS.The varied perceptions of CCS Ready among different stakeholders led to theconsideration of flexibility in two ways: 1) a flexible definition allows policymakers toconsider the different views of stakeholders in their policy formulation; and 2) thereare different region-specific issues related to CCS Ready. Thus, flexibility in thedefinition is necessary in order to be applicable internationally.A common theme in existing CCS Ready literature and legislation is that unless theeconomic viability of a plant can be demonstrated, it is unlikely that CCS Ready willbe adopted by developers. Economic analysis to determine whether building CCSReady plants is “economically acceptable” was considered as essential indetermining the extent of economic barriers for CCS retrofits.The proposed definition of a CCS Ready plant based on the key principles is shown in thetext box below. This definition is comprised of various components that are either specificto each a Capture Ready plant, a Transport Ready plant, or a Storage Ready plant, orcommon among all types of plants.14 International Energy Agency Greenhouse Gas R&D Programme (IEA GHG). (2007a). CO2 capture ready plants (Reportno. 2007/4). Cheltenham, UK: Author.23 February 2010 15
Page 1: Defining CCS Ready: AnApproach to A
Page 4 and 5: PrefacePrefaceThe Global CCS Instit
Page 6 and 7: Acknowledgements and CitationsThe c
Page 8: Executive SummaryThe components spe
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Appendix A: Summary of Reviewed Exi
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Appendix B: Technology Design Optio
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Appendix E: ReferencesInternational
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Appendix E: ReferencesIntergovernme
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Appendix E: ReferencesNational Coal
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Appendix E: Referencesfrom http://w
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Defining CCS Ready: An Approach to An International Definition

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