The European Perspective on Power Generation and Carbon Capture and Storage

1
The European Perspective on Power Generation and
Carbon Capture and Storage

• Derek M. Taylor, Energy Adviser, European
  Commission1

1. The views expressed here are those of the
author and may not necessarily reflect those of
the European Commission

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Outline

• The three challenges for an energy policy
• Security of supply
• Competitiveness
• Sustainability
• The role of coal and other fossil fuels
• Shares in energy consumption
• Prices of fossil fuels
• Environmental impacts of fuels
• Key issues that must be urgently addressed
• Reduction of carbon emissions
• Demonstration of Carbon capture and storage
  (CCS)
• Deployment of CCS technologies in EU and
  globally
• International Research Co-operation

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• The three challenges
• Security of Supply
• Competitiveness
• Sustainability

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Security of Supply Import dependence
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Security of Supply - Sources of imports of fossil
fuels

• Main suppliers of oil
• Russia (31)
• Norway (20)
• Saudi Arabia (13)
• Libya (10)
• Iran ( 7)
• ( Total Middle East 22)

• Main suppliers of gas
• Russia (33)
• Norway (29)
• Algeria (21)
• Mainly LNG (12)
• Main suppliers of coal
• South Africa (26)
• Russia (16)
• Australia (15)
• Colombia (12)

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Competitiveness - Border prices for oil and
gas X (today!)
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Sustainability carbon dioxide emissions

• CO2 from energy production and use makes up 80
  of EU Greenhouse gas emissions

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Sustainability quantities of carbon dioxide
from energy
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• The role of coal and other fossil fuels
• Shares in energy consumption
• Prices of fossil fuels
• Environmental impacts of fuels

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Gross inland consumption 2004 (Mtoe)
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Role of different fuels in electricity production
(BAU)
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Reserves of coal - global

• Coal is an abundant energy resource
• Global reserves 900 billion tonnes
• Annual production 4.5 billion tonnes
• Lifeline 200 years
• Coal is a reliable energy source
• Fairly even reserve distribution, on almost all
  continents
• Accessible at reasonable costs
• Low risks in transport, handling storage

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Indigenous resources of solid fuels in the EU

• The total solid fuel resources in the EU amount
  to around 438 billion tonnes
• Of which 309 Bt are hard coal
• The total solid fuel reserves in the EU amount to
  close to 88 billion tonnes
• Of which 36 Bt are hard coal
• Production in 2004 was 187 Mt of hard coal and
  392 Mt of lignite (total 579 Mt)
• 
  Source Euracoal

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Solid fuel benefits for security of supply for
EU

• So indigenous reserves of hard coal are
  equivalent to close to 200 years of production at
  its present level.
• Reserves of lignite are equivalent to around 130
  years of production at its present level.
• Resources of both are significantly greater
  especially those for hard coal

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Oil price - /bbl Spot Brent Crude Source BP
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Gas price - /billion BTU cif Europe Source
BP
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Coal price /t - coal marker price (NW Europe)
Source BP
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Fossil fuel price evolution 1988 present -
Summary

• Oil and gas prices have quadrupled in the last 20
  years
• Coal prices have (only) doubled

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• Key issues that must be urgently addressed
• Reduction of carbon emissions
• Demonstration of Carbon capture and storage
  (CCS)
• Deployment of CCS technologies in EU and globally

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An Energy Policy for Europe

• Adopted by the European Commission in January
  2007
• Endorsed by the European Council in March 2007
• One strategic objective
• Reduction in CO2 emissions by 20 or even 30 -
  by 2020

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CO2 emissions from energy in EU-25 million
tonnes
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Sustainability future emission trend .. (BAU)
23
Carbon dioxide emissions during electricity
generation
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The key issue for coal view of the European
Commission

• Coal is a key contributor to the EU's security
  of energy supply and will remain so.
• However, coal can continue to make its valuable
  contribution to the security of energy supply and
  the economy of both the EU and the world as a
  whole only with technologies allowing for drastic
  reduction of the carbon footprint of its
  combustion.

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The need for carbon capture and storage (CCS)

• Future coal (fossil fuel) generation to be low
  carbon
• The Commission would like to see all new fossil
  fuel generating plant built after 2020 to include
  CCS
• The need for commercial scale demonstration of
  CCS
• In order to demonstrate the variety of different
  option for CCS up to 12 large-scale demonstration
  plant need to be constructed - by 2015
• If demonstration is delayed then deployment will
  be delayed
• The need for public funds to support such
  demonstrations
• There will need to be very significant industry
  and public funding if the necessary demonstration
  plants are to be built
• ..and very strong political support over a
  period of time
• The European Commission is expected to adopt a
  Communication on support for CCS tomorrow

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The cost of CCS a critical issue

• Mobilizing decisive industry commitment will be
  crucial
• Without such funding complementary public funding
  may not be triggered
• The dedication of substantial resources by
  companies is a precondition for the stimulation
  of the technologies
• Paving the way for strong Member States
  involvement
• Some MS have identified possible approaches
• Feed-in tariffs, up front investment grants,
  guaranteed CO2 prices
• Use of revenues from ETS auctions might be
  appropriate
• Structural funds in new MS (EU-12)
• Revision of State Aid guidelines for
  environmental protection
• Identifying sources of financing at EU level
• Financing low-carbon technologies to be addressed
• European financial institutions could be
  instrumental
• Continuing support under the EUs Research
  Programme

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Creating the right conditions for CCS

• The need for clear regulation for CCS both in
  EU and globally
• The European Commission is expected to propose
  framework legislation for CCS tomorrow (23
  January)
• Recognition of CCS in the EU Emission Trading
  Schemes
• The issue of CCS will be addressed in the new
  Directive on the ETS expected to be adopted by
  the European Commission tomorrow
• Greater international co-operation on CCS
• The European Commission is developing bilateral
  activities with India, China and South Africa
• The EU and many of its Member States are active
  in the CSLF

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International Research Co-operation FP7 Energy
ThemeConcrete opportunities in New Calls
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Specific International Cooperation Actions (SICA)

• Topics for Collaborative Projects especially
  designed and devoted to the international
  cooperation with targeted ICPC including India
• Address problems, on the basis of mutual benefit,
  of shared interest and importance e.g. the
  environment consequences of energy policies,
  energy supply inter-dependency, technology
  transfer and capacity building

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• SICA Topic 5.2.1 CCS capacity building with the
  large
• emerging economies (EE)
• Content and scope research aimed at first global
  estimate of the CO2 storage capacity in large EE,
  matching sources and sinks and identification of
  a few potential storage sites for large emission
  point sources. Capacity building in CCS inc.
  development of transport infrastructure
• Funding scheme Collaborative Project (2 X MS 2
  X ICPC)
• Expected impact allow deployment of zero
  emission fossil fuel based power plants in large
  EE with sufficient pre-requisite knowledge (CO2
  storage potential) and technical know-how
• Other information SICA balanced partnership
  between EU and Large EE members of the CSLF
  institutions from developed countries also
  members of CSLF welcomed)
• International Co-operation Partnership Country

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Two stage Evaluation Procedure

• OUTLINE PROPOSAL
• Submission deadline 26 February 2008, 170000
• Evaluation March-April 2008
• FULL PROPOSAL
• Submission deadline will be specified in
  invitation letter (indicative 29 May 2008)
• Evaluation June 2008
• Full proposal should be complete and precise,
  but as concise as possible

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• Some basic conclusion

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Coal secure and competitive, but

• The European Union is increasingly dependent on
  imports to meet its energy needs
• Coal is a more secure source than other fossil
  fuels because of world and European
  reserves/resources
• Coal has economic benefits over other fossil
  fuels including the price is generally less
  volatile and is increasing at a slower rate
• However coal is a major source of carbon dioxide
  emissions
• It is the main source of carbon emission in power
  production

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What we MUST do .

• The world needs to reduce its carbon dioxide
  emissions to slow down climate change
• Removal of carbon dioxide from the waste stream
  from coal-powered electricity production is a
  vital part of this reduction
• Commercial scale carbon capture and storage
  needs to be demonstrated urgently
• Demonstration of CCS will require changes to
  legislation and strong public and political
  support
• Full deployment of CCS will require very
  significant funding by industry and also
  significant public funding and other forms of
  support