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

The case for a Tees CCS networkFinal Reportthe Medium and Large networks (including costs of financing but excluding initial sitedevelopment fees) 55 . The “Anchor-only” system 56 has cheaper absolute capital andoperating costs cost, but is slightly higher on a unit cost basis – see Table 2.For the Medium network, a sensitivity analysis reveals that in a „best case‟ scenario, thecost of storage could fall to £ 2.3/tCO 2 stored (See Appendix 2).Studies of the economics of CO 2 -EOR have typically concluded that oil prices would needto be sustained in excess of $70/barrel for CO 2 -EOR in the North Sea to be costcompetitive with CO 2 storage alone 57 . However the economics will depend strongly on sitespecific issues, technology developments, taxation and incentives, and the whether CO 2supplied represents a cost or a revenue source.Table 2 Costs of CO 2 storage 58ScenarioDescriptionAnchor onlySmall networkMediumnetworkLargenetworkCapex for injectionfacilities and wells(£m)Opex for injectionfacilities and wells(£m)Storage cost£/t CO 2 stored£153 m £322 m £463 m £560 m£6 m/yr £15 m/yr £20 m/yr £22 m/yr£14/t £13/t £12/t £12/tStorage costs and risks may be reduced and the development of storage infrastructureaccelerated through shared analysis. The Yorkshire Forward CCS community hasindicated it is open to such an approach. 5955 This assumes a water depth of 100-150 m and reservoir depth of 2km. Storage cost modelling is described inthe appendix.56 An anchor project could be one of the proposed single source CCS demonstration projects. In principle thiscould be a new build or retrofit, from the power sector or industry. In this study the „anchor‟ has been modelledwith emission characteristics similar to the proposed Eston Grange IGCC project although alternatives arepossible.57 Scottish Centre for Carbon Storage and Scottish Government (2009) Opportunities for CO 2 storage aroundScotland - An integrated strategic research study, available at http://www.geos.ed.ac.uk/sccs/regionalstudy/CO2-JointStudy-Full.pdf58 Cost refers to new injection facilities, wells and monitoring only. Assumes an injection rate of 1 MtCO 2/year/well with an average monitoring cost of £1/t. Weighted average cost of capital assumed is 10%. Areview of the potential for future-proofing storage options was out of the scope of the present study.59 S. Brown (2010) Personal communication22