7th International Scientific Conference on Energy and Climate Change The European CCS Demonstration Project Network – Real life experiences towards a low carbon world 7th International Scientific Conference on Energy and Climate Change KEPA, Athens, 14 October, 2018

Outline EU CCS Project Network Overview The Network CO2 capture, transport and storage in the Network CCS effect in the projects Potential impact of the Network Our challenges Tackling the challenges CCS the way forward

EU CCS Project Network Overview The European Commission established the Network in 2009 Why: Accelerate the deployment of safe, large-scale and commercially viable CCS projects How: Share technical and project management information via facilitated workshops & members-only platform Who: Current members are four of the most advanced large scale demonstration projects in Europe Goal: Create global CCS project-based information-sharing community

The Network 2.1 Mtpa CO2 1.3 Mtpa CO2 Projects in light blue cancelled Ciuden of Compostilla stays in “collaborative” status 1.3 Mtpa CO2

CO2 Capture in the Network Projects originally composing the Network

CO2 Transport and Storage in the Network

CCS effect in the Network projects’ performance

The Network in context …the Network projects could permanently store nearly 9 million tonnes of CO2 per year, which is the equivalent to… 1,894,737 Vehicles off the road 5,000,000 Homes electricity supply 2,477 Wind turbines installed 230,769,231 Tree seedlings growing for 10 years Sleipner Project captures and stores around 1 million tonnes of CO2 per annum from its light oil and gas field If all of the other member projects were developed, the Network would have an installed clean electricity generating capacity of 1,450 Mwe (estimations include Compostilla, Porto Tolle, Road, Don Valley and Sleipner Projects, as per 2013 Network Status) Based on typical consumption estimations: http://www.epa.gov/cleanenergy/energy-resources/calculator.html#results https://www.ofgem.gov.uk/ofgem-publications/39337/review-typical-domestic-consumption-values.pdf

The challenges Policy uncertainty 2) Legal / regulatory frameworks burdens For example, within the CCS Directive: Transfer of responsibility Liability and financial security requirements Third party access requirement issues 3) Lack of appropriate investment and deployment mechanisms Strong incentives and backing need to be urgently introduced to enable the operation of first-mover CCS projects The real challenge is in the operational deployment of the projects 1) Regional and national climate and energy policies must provide long-term clarity on the way forward. Incentive mechanisms should be consistent with this pathway. 2) Ensuring that projects are not unduly burdened with unquantifiable risks and liabilities would greatly aid deployment. 3) Much more needs to be done. These must take into account the risk and large upfront costs experienced by project developers. If CCS is going to be developed quickly and at scale, suitably sized infrastructure for future clusters needs to be put in place.

CCS projects ($ billion) Clean energy ($ billion) Global investments Year CCS projects ($ billion) Clean energy ($ billion) CCS share (%) 2010 2.7 N/A 2011 3.0 317.9 0.94 2012 2.8 286.2 0.98 2013 N/A  254.0 IEA also reports CCS investments were USD20 billion from 2004-2012. Bloomberg New Energy Finance data, 2013 2013/14 EU CCS Demonstration Project Network Situation Report

CCS cost in context Annual Energy Outlook 2014 DOE/NETL-2007/1291

Value for money? Network projects could have an installed capacity of 1,450 MWe, i.e. approximately 10 million MWh/y Assumptions Network Wind (South Europe) Wind (North Europe) Solar Average capacity factor 0.75 0.27 0.35 0.19 1450 MWe translates to 9.53million MWh/y for Network In turn, wind turbines would produce 3.3 million MWh/y (3 times less) and solar 2.4 million MWh/y (4 times less) 5,443,714 solar panels to produce 9.53million MWh/y

CCS challenges in Europe CCS Directive Permitting issues Business models Themes that have been already discussed in Ponferrada Network expansion Technical studies and analyses

CCS Directive review The legal EU framework for the safe geological storage of carbon dioxide but… … generates overly heavy liabilities and risks for the operators of early projects … the costs of financial contribution related to the Financial Mechanism are difficult, if not impossible, to estimate … the experience shows that national steps are required to limit unreasonable burdens for projects Liabilities within the CCS directive: Storage, Transport, Capture (civil, environmental, climate) Financial mechanism: Member States must ensure that the operator makes a financial contribution available to the competent authority before the transfer of responsibilities to the competent authority takes place. Higher risk for early projects http://decarboni.se/sites/default/files/publications/94946/permitting-process-special-report-getting-ccs-project-permitted.pdf

CCS - the way forward Short term… Long term… Policy measures that give investors’ confidence in revenue over the life of a CCS project e.g. Contract for Difference mechanism adopted in the UK Long term… ETS structural reform as the long term driver for investment Extended NER300 or Innovation Fund but more tailored to the industry’s and Member States’ requirements CCS standards based on actual projects experience Emission performance standards (EPS) will incentivise CCS in Europe? CfDs: although long term contracts are a reality However these structural measures are scheduled to be implemented only as of 2021 and any impact on ETS price will take even longer. Therefore, complementary financial measures to bridge the gap between 2014 and 2021 will be necessary National level support should to a large extent be tailored to the specific energy and climate policies – this could be done through national decarbonisation pathways outlined by the Commission in the 2030 framework communication Premature standardisation could limit flexibility in the development phase of a technology. Due to limited experience in commercial scale CCS in Europe it is too early to assess the required scope of standards.

Find out more and keep up to date www.ccsnetwork.eu/ twitter.com/ccsnetworkeu

Thank you! zoe.kapetaki@globalccsinstitute.com Acknowledgements to EC for grant and partners of Secretariat ENER/FP7EN/296013/CCS-PNS