Final report for One North East And NEPIC 21/12/10 - The Carbon ...

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The case for a Tees CCS networkFinal ReportTable of TablesTable 1 Economics of CO 2 capture in the Tees Valley ...................................................... 20Table 2 Costs of CO 2 storage ............................................................................................. 22Table 3 Description of onshore transport networks............................................................. 24Table 4 The costs of the offshore CO 2 pipeline (200 km from Tees Valley to the North Sea)and combined network (inclusive of owners costs and rights-of-way). ............................... 25Table 5 System performance criteria .................................................................................. 30Table 6 Summary of project risk and risk management options ......................................... 46Table 7 Potential sources of commercial finance for a CCS network ................................. 52Table 8 Assessment of CCS network project structure options .......................................... 604
The case for a Tees CCS networkFinal Report1 IntroductionThis report has been prepared by Element Energy and Carbon Counts on behalf of OneNorth East (ONE). It outlines the results of technical assessment, financial evaluation andthe commercial case for potential configurations of a carbon dioxide (CO 2 ) capture,transport and storage network in the Tees Valley of the North East of England. The focusof the report is on the building of pipeline infrastructure that could collect CO 2 from varioussources within the Tees Valley and deliver it to potential geological CO 2 storage sites inthe North Sea basin. It reviews the commercial challenges involved, sources of financeand approaches to structuring project development.The analysis complements a parallel engineering study undertaken by AMEC to evaluateengineering options for building a CO 2 network in the region 6 . Data and engineeringoptions presented herein rely heavily on the AMEC study in order to ensure consistencyacross the two sets of analysis.The study has comprised several elements, including1. Research, building on the team‟s existing understanding of the low carbon sectorand CCS networks in particular.2. Survey and workshops with local emitters and potential CCS service providers toidentify and review inputs, methodology and outputs.3. Quantitative economic modelling of CCS options.4. Analysis of risks, risk management approaches, and options for financing andstructuring projects.5. Workshops with the investor and legal community to prioritise concerns andoptions.6. Production of interim presentation packs and draft report.Element Energy and Carbon Counts are very grateful for the views and inputs from themore than forty stakeholders and experts interviewed to gauge their views on variousaspects of the potential CCS network.This final report represents the final and major deliverable from the study, and is structuredas follows:Chapter 2 introduces the challenges facing the UK and Tees Valley businesses inreducing greenhouse gas emissions and carbon dioxide capture and storage technology.Chapter 3 describes the costs of developing a carbon capture and storage network.Chapter 4 introduces the risks facing development of a CCS network and approaches tomanaging this risk.Chapters 5 and 6 review options for financing and structuring a CCS network respectively.Chapter 7 presents the key conclusions from the analysis and recommendations for theparties in the North East that wish to pursue further the optimal development of a CCSnetwork.The report is accompanied by two appendices. Appendix I summarises the results of astakeholder survey carried out at the start of this project. Appendix II describes themethodology and results of the economic modelling.6 Amec (2010) Engineering Design and Capture Technologies for Carbon Capture and Storage in the TeesValley. Technical report 1620 1752 Rev A.5
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