Proceedings from CCS Cost Workshop - Global CCS Institute

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PROCEEDINGS FROM CCS COST WORKSHOPIntroductionMore than 50 studies have been released in the past five years that provide estimates of thecosts for operating a carbon capture and storage (CCS) equipped power plant in a variety ofregions around the world. There are also many other studies that examine only variants orelements of CCS technologies such as different chemical choices, heat integration issues,retrofits, storage or transport issues or technologies still in the R&D stage.Some of the variety in cost estimates from these studies reflects the range of technologiesselected for capture or particular transport and storage options. However, most of the variance inestimates arises from other factors including differences in methodologies and assumptions forunderlying economic parameters. The extent to which the cost and performance parameters areassociated with detailed plant designs or whether the study is derived from parameters inprevious cost studies also affects estimates. At the same time, some studies do not include allelements for establishing a greenfield CCS power plant whilst others are less than transparentregarding key assumptions.CCS is one of a number of key low-carbon technologies required to decarbonise energyproduction this century if the risks of climate change are to be managed effectively.Understanding the current and possible future costs of the technology is important for a numberof reasons including amongst others:• climate and energy policy development;• raising finance; and• the allocation of limited R&D budgets.At the 10th International Conference on Greenhouse Gas Control Technologies in 2010, the needto establish an Expert Group on CCS costs was identified in response to the growing number ofreports regarding the costs of CCS. It was agreed that this group should consist of invitedmembers with identified expertise in the various components of the CCS process chain – capture,transport and storage.An initial Steering Group was formed to organise the first meeting of the group. The inauguralmeeting was held on March 22-23 2011, hosted by the International Energy Agency. SteeringGroup members included representatives from: Carnegie Mellon University (Ed Rubin), ElectricPower Research Institute (Richard Rhudy), Global CCS Institute (Christopher Short),International Energy Agency (Matthias Finkenrath), IEA Greenhouse Gas R&D Programme (JohnDavison), MIT Carbon Sequestration Initiative (Howard Herzog) and Vattenfall (Clas Ekström).The current understanding of the costs of CCS presented at that meeting and the agreedoutcomes for the Group to take forward are included in this document. This work programconsists of efforts to improve both the transparency of CCS cost calculations and the broaderchallenges associated with conveying messages around costs to the broader community.Figure 1 Attendees at the 1st meeting of the CCS Costs Workshop held at the IEA5
PROCEEDINGS FROM CCS COST WORKSHOPSession 1: Audiences and Uses for CCS EstimatesThe workshop was used to highlight the wide array of both generators and users of CCS costsestimates and the distinct needs and aims of these two types of entities. These groups includethe government, industry, and various other non-governmental organizations (NGOs). Thegenerated CCS cost estimates that are typically used for two broad purposes. The first is fortechnological assessments in an effort to allocate investment and research and developmentfunding; the second is for policy assessments that are used for regulatory, legislative, or advocacypurposes.The diverse groups and purposes for CCS cost estimates create a tension between the generatorsand users of the content. Each distinct audience of the cost estimates is evaluating theinformation from different perspectives and from different agendas, while the generator of thecontent is also trying to fill a knowledge gap for a particular purpose. This makes the ideal goalof using a common language and message difficult to achieve. If a common framework,methodology, and terminology is established, then the differences can be elaborated in a clearmanner.Within different CCS cost studies there is uncertainty, variability, and bias that is often notpresented or explicitly stated with the publication of the estimates. This makes comparisonacross different studies both within the same type of technology and across other low carbontechnologies difficult. The uncertainty of the costs of CCS technologies is never explicitly statedwith the results. Variability across regions, even within specific country boundaries, and differenttime frames make direct comparisons difficult. Bias is often perceived with costs estimates asthe generators of the content have a vested stake in the deployment of such technologies. Forexample, in comparisons of low carbon technologies, bias can be introduced because analystsmay believe there is bias, whether perceived or real, in the cost data of competing technologies.The goal is to achieve consistency across all of these considerations for costs estimates.Some of the other variables that were highlighted during the workshop included:• There is a perceived high variability in the content contained within the generated costestimates for the investors and the utilities when compared to those supplied to theregulators and public. Explaining the context of these numbers will help to reduce theuncertainty of the public.• The difference between top-down and bottom-up estimates differs greatly. The top-downestimates often incorporate estimates from different sources. This presents a problemfor the consistency of these types of generated numbers.• There is high variability in the cost estimates given the location, coal type (coal is oftenperceived as a uniform substance), labour productivity, construction schedules, andcurrency denominations.• Organizations often role out different CCS cost estimates without explaining the reasonfor change or the context of the numbers. This also adds to the uncertainty of the publicin the legitimacy and accuracy of these estimates.• China likely offers opportunity for cheaper costs for the deployment of CCS. heseprojects could be used as feedback for other worldwide costs and encouragedevelopment of West-China partnerships for CCS.• General studies are not the same, nor intended to be the same as specific studies. Thevariability of assumptions, such as the role of first-of-a-kind projects to reduce risk andNth-of-a-kind projects to reduce costs, are often not articulated in the context of thestudy. This relation of costs to technological readiness needs to be clearly stated.The idea of establishing a commonality between the assumptions and the way the assumptionsare presented within the context of the CCS costs estimates was clearly stated as a goal of theattendees of the workshop. While one often focuses on the specific audience of a particularstudy, one has to be cognizant of the larger audience that will use these numbers presented.Assumptions and the uncertainty associated with those assumptions should be clearly statedwhen publishing these numbers to make the numbers understandable to the wider audience.6
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Page 18 and 19: Public funding commitments to CCS b
Page 20 and 21: Contrasting emerging project costs
Page 22 and 23: Costs by location
Page 24 and 25: Levelised and avoided costs
Page 26 and 27: Overview of the AgendaJohn DavisonI
Page 28 and 29: Day 1 - Plenary• Status of CO 2 c
Page 30 and 31: Day 2 - Plenary• Report from brea
Page 32 and 33: Audiences and Uses for CCS CostEsti
Page 34 and 35: Users (and Generators)Government In
Page 36 and 37: Usage Example, E-mail, March 4, 201
Page 38 and 39: Usage Example, Press Release, Octob
Page 40 and 41: Bottom-up Cost EstimateIPCC Special
Page 42 and 43: Top-down Cost Estimates• Bottom-u
Page 44 and 45: CCS in a Mitigation Portfolio• Ma
Page 46 and 47: DOE’s EIA2009 Levelized Cost of N
Page 48 and 49: Paul L. Joskow , Comparing the Cost
Page 50 and 51: VariabilityHoward Herzog / MIT Ener
Page 52 and 53: Bias• Most people doing the cost
Page 54 and 55: Take-Aways• The cost estimates we
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Audiences & Uses for CCS Cost Estim
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Intricate Balancing ActSocietyRegul
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Intricate Balancing ActSocietyEnvir
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Thank YouPlease visit:http://www.ne
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Pulverized coal plant Lippendorf2 |
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Cost of a Power Plant• We are the
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Cost distribution for different pow
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View on Oxyfuel Pilot Plant8 | Lars
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The user of cost study information
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CCS demonstration plant Jänschwald
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CCS costs too much… but then, so
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Post-Combustion Unit at Huaneng Sha
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Implications• Deploy first CCS pr
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Déjà vuE.S. Rubin, Carnegie Mello
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Measures of CCS Cost• Cost of CO
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Cost of CO 2 avoided is sensitive t
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Ten Ways to Reduce CCS Costs(First
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Framework for Cost EstimationUnit P
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Capital Cost Elements in Recent Stu
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Do We All Makethe Same Assumptions?
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Uncertainty, Variabilityand BiasE.S
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Bias• Can be reflected in the pro
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CCS - Costing Methods and MeasuresC
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Cost of ElectricityCosting methods
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Cost of ElectricityIllustrative res
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Cost of ElectricitySynthesis costin
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CO 2 Capture Costing Methods and Me
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Investment Costscosts of all instal
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O&M Costs (Operation and maintenanc
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Total Cost Assessment1. Exergy cost
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ASUCoalGasifierCO2RemovalAGRWGS08/0
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08/04/20116
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SCOPESummary of current status of c
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EARLY COMMERCIAL PLANTSScope of cos
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EARLY COMMERCIAL PLANTSVariability
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EARLY COMMERCIAL PLANTSAccuracy of
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DEMO PLANTSExample: Project investm
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RETROFITCost considerations regardi
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CONCLUSIONS• Considering uncertai
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FURTHER INFORMATIONIEA 2011 Publica
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Status of CO 2 Capture CostsEU Resp
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Status of CO 2 Capture CostsKey Iss
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Muchas graciasEsta presentación es
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Capital Cost Comparisons from EPRI
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Comparison of EPRI Study Results wi
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Total Capital Required Comparison -
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Together…Shaping the Future of El
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Capital costs for thermal power pla
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Additional Capture Cost Considerati
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What is the demand for transport of
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Literature Review - Cost Comparison
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A selection (2)Netherlands Oil and
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ZEP: The costs of CO 2 transport -
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....to complex networksSource2,5 mt
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ZEP: The costs of CO 2 transport -
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IEA CCS Cost Workshop-Storage Costs
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IPCC Special Report on CCS2005
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GCCSI : The Global Status of CCS 20
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VariablesDesktop Studies (~pennies
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CCS Cost WorkshopIEA, 22-23 March 2
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Storage costs differ per case, with
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Cheapest field types are also the r
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Key insights1▪ Type and location
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Methodology of CO 2 Storage cost co
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Sample model outputSOURCE: Team ana
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Assumptions on other parameters (1/
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Sensitivities - Example: case 6 (Of
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The learning rate does not material
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Introduction• Study being underta
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Estimated project time lineDeep Sal
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How many project will be bankable i
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Costs - key points• Cost models a
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