Hydrogen Energy Challenges and Opportunities

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Hydrogen Energy Challenges and Opportunities

• Lewis Castle College
• September 2007
• Graeme Miller

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Princeton wedgestechnology options for GHG
stabilization
The Stabilisation Wedge
Emission trajectory BAU
Emission trajectory to achieve 500ppm
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how big is a wedge?
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the energy sector emissions challenge

• The power sector is already the largest
  contributor of CO2
• Growth in coal-fired generation is projected to
  be the single largest contributor of new GHG
  emissions over the next fifteen years

2020 Base Case
CO2 Emissions By Sector
Source IEA World Energy Outlook, 2004
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increasing suite of low carbon options are
available
Levelised costs of electricity generation

• Technological advances will continue to close the
  existing gaps
• Pricing carbon would dramatically shift this
  picture
• As the RA industry demonstrates capability,
  carbon-constrained policies likely to be more
  acceptable to policy-makers

Source BP Estimates, Navigant Consulting
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CO2 reduction options (/te)

• cost of CO2 mitigation (above
  todays economics)

Transport (Mobile)
CO2 reduction costs (/tCO2)
Power Generation (Fixed Sources)
Source European Commission Report (Jan 2004) ,
DoT, DTi (2003) , BP Analysis
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climate change BPs journey
BP announces plans for worlds first commercial
hydrogen power station. BP launches Alternative
Energy
BP acknowledges need for precautionary action to
cut GHG emissions after exiting the Global
Climate Coalition. BP predicts 1 bn revenue in
its solar business in 2007
BP initiates the CO2 Capture Project with other
companies and governments, studying methods of
capturing and storing carbon dioxide at power
plants
BP achieves its 2010 target 9 years early, having
reduced GHG emissions by energy efficiency
projects and cutting flaring of unwanted gas
Based on work at Princeton, BP sets out range of
technology options to stabilize GHG emissions
over 50 years, including increases in solar,
wind, gas-fired power and carbon capture and
storage
2003
2001
2005
1997
1999
1998
2000
2002
2004
BP begins funding the Carbon Mitigation
Initiative at Princeton University, exploring
solutions to climate change
BP sets target to cut emissions from operations
to 10 below 1990 levels by 2010
BPs solar business moves into profit and
announces plans to double production. On track to
meet 1997 revenue prediction BP launches carbon
dioxide capture and storage project at gas field
in Algeria
BP announces plans to build wind farm at Nerefco,
Netherlands
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the technology blocks are available today
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Thus capturing and Storing the Carbon requires
significant investment above conventional power
plant

• Capital costs. CCS adds a substantial amount of
  processing equipment upstream of the power
  generation block, approximately doubling the
  capital cost of plant
• Reforming or gasification
• Air Separation in the case of coal in IGCC
• Water gas shift
• Acid Gas removal (CO2 separation)
• CO2 compression
• Pipeline and injection
• Operating costs. The increased plant complexity
  increases the manpower required to operate and
  maintain the plant, with consequent increase in
  operating and maintenance costs
• Fuel costs. The extra processing units have a
  substantial net requirement for power, thereby
  reducing the net export power from the plant and
  consequently the overall thermal efficiency of
  the plant

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Actual project costs appear to be significantly
above some publicly quoted estimates
Source Published data and BP estimates.

• Notes
• All estimates are against plant using same fuel
  without CCS. Costs per tonne would be likely to
  be higher (potentially more than double) if a
  coal plant with CCS were compared with CCGT
  without capture. The cost of abatement would
  depend on the gas price.
• Estimates exclude the value of EOR and other
  products e.g. steam sales. BP estimate allows
  10/tCO2 for transport and storage.
• Statoil based on publicly quoted cost of
  61/tCO2, assumed to be per tonne captured.

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This is consistent with the pattern that has been
observed for other technologies

• Initial costs of FGD were higher (by a factor of
  at least 2 to 3) than earlier estimates
• Costs of projects reduced towards originally
  estimated levels over a period of decades.
• Similar patterns to that shown for FGD are found
  for, SCR, CCGT and LNG plant

Source IEA
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Such a trend for CCS would imply that a
substantial premium over the carbon price will be
required for some years
Cost of CCS can be supported by carbon price
alone from some time over the period 2020 to 2040?
/tCO2
Cost of CCS
Current required premium over carbon price
Carbon price
Years
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But.. The sums required are not large compared
with benchmarks
Note data is indicative only
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DF1 Peterhead, Scotland
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technology elements
Air
CO2
Steam H20
Catalytic Reformer
CH4
H2
Shift Conversion
CO2 Capture
CCGT
Steam
H2O
H2CO2
H2CO
All technology proven at this scale around the
world
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comparison with other UK power
UK Average Source "Note on the UK Governments
Proposed Approach to allocation of EU ETS
allowances to the Electricity Generating Industry
(Incumbents) for Phase II", DTI March 2006.
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DF1 project specific benefits

• Delivers as much power as the UKs current wind
  farms generate
• Generates 475 MW of base load low carbon power
  and will not require redundant systems in reserve
• Stores 1.8 million tonnes of CO2 pa in the first
  UK re-use of a reservoir for CCS
• 50-60 mmbbls Enhanced Oil Recovery (EOR)
• Creates 1000 direct engineering and construction
  jobs over the next 4 years and 150 permanent
  skilled jobs

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DF2 Carson, California
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DF2 Significance

• Will generate 500MW of clean electricity.Will
  generate enough clean electricity to power
  325,000 Southern California homes.
• Will capture 4 million tonnes per annum of CO2
  equivalent to removing 800,000 cars from the
  roads.
• Will be the worlds largest hydrogen fired power
  generation facility in the world.
• Use of petcoke potentially enabling clean coal
  technology and major change in US security of
  energy supply.

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DF3 Kwinana, Western Australia
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some observations

• The world needs to move fast to address the
  climate change problem
• CCS will be an important part of the solution
• But costs are currently high relative to carbon
  prices, and likely to remain so
• Hundreds of billions of dollars of additional
  incentives may be required before CCS is
  commercial on the basis of the carbon price alone
  (as for other clean generation technologies)
• Some implications for the business
• This is going to be a major industry with many,
  many opportunities
• Governments and regulatory bodies are the
  customers for these projects we need to give the
  customers what they want
• Follow the money choice of projects will be
  largely determined by where there is a supportive
  policy and regulatory framework
• Cap and trade is only a small part of the story
  for at least the next ten years

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Background Context
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UK CO2 Sources

• Total UK emissions c. 560 million tonnes (Mt) CO2
• Emissions from industrial point sources 283 Mt
  CO2
• Of the 20 largest emitters, 17 are power plant, 3
  are integrated steel plant and 1 is a refinery
  /petrochemicals plant
• Emissions from 20 largest power stations 132 Mt
  CO2
• If emissions from these could be reduced by
  85-90, UK emissions would be reduced by 18-20

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UK Storage sites

• Oil fields
• Gas fields
• Gas/condensate fields
• Saline-water-bearing reservoir rocks (saline
  aquifers)
• Coal seams

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US CO2 Markets
EXISTING MARKETS
Wyoming
Canadian
Permian Basin
Louisiana/Mississippi
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DF1 EOR Monitoring CO2 Model
Miller outline at surface
Water flow vectors

• Storage model to provide assurance of long term
  storage integrity after site closure
• CO2 storage model
• Covers full volume of potential migration
• Important physico-chemical processes for CO2 over
  thousands of years
• CO2 location, saturation, pressure, temperature
  from calibrated reservoir model
• Kms of impervious rock impede vertical water flow
  (lt5 cm per 1000 yrs)

very few Cells with gt50m/My Upwards Water Flow
4 km
rock types
Mol Fraction CO2 in 2100 Lo Hi
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potential market for CCS 2005 to 2030
U.K.
World
Source IEA, DTI, BAH analysis
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climate change problem - discussed for a long time
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Many people have commented on the issue over the
years

• "We would then have some right to indulge in the
  pleasant belief that our descendants, albeit
  after many generations, might live under a milder
  sky and in less barren surroundings than is our
  lot at present." Arrhenius (1896)
• Human beings are now carrying out a large scale
  geophysical experiment" Revelle and Seuss
  (1957)
• scenarios suggests that warming would bring
  drier conditions to most of the US, across Europe
  and over the great grain growing regions of the
  USSR And yet, no serious effort is being made
  to curtail the destruction of our dwindling
  reserves of tropical forest or to require
  fossil-fuel power station to scrub carbon from
  the gases they release. New Scientist magazine
  (1980)
• We will work to cut down the use of fossil
  fuels, a cause of the greenhouse effect No
  generation has a freehold on this earth. All we
  have is a life tenancywith a full repairing
  lease. Margaret Thatcher (1988)

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A policy response has emerged slowly over the
last 20 years
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carbon emissions per year
Billion of Tonnes ofCarbon Emittedper Year
At LeastTriplingCO2
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Historicalemissions
StabilizationTriangle
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Avoid Doubling CO2
Flat path
0
1950
2000
2050