Economic assessment of the whole CCS technology cycle Ksenia Sidorova, PhD student Department of Organization and Management, National Mineral Resources University ( St. Petersburg, Russia ) ksenia. inbox. ru Abstract Carbon Capture and Storage (CCS) is currently regarded as a promising option to reduce the emissions of CO 2 into the atmosphere and mitigate climate change. This technology is especially beneficial for countries whose energy systems are based on fossil fuels. CO2 captureCO2 Transport CO2 storage in a geological reservoir Conclusions http :// esco - ecosys. narod. ru /2012_1/ art 102. htm Despite the significant potential of CCS, currently it is at the initial stage of development, not least because of its high capital costs. One of the ways to increase the investment attractiveness of CCS is the injection of CO 2 into depleted oil-fields for enhanced oil recovery (EOR-CO 2 ). According to initial estimates of certain regions, such application of CO 2 can recover high capture costs of the project. In Russia the government expresses certain interest in the CCS technology, especially EOR-CO 2. The oil industry being the main driver of Russian economy, it can also serve as a platform for environmentally significant innovations. The key objectives of this research are: - to evaluate the potential of Russian oil fields to serve as CO 2 -sinks; - to develop a techno-economic model of the CCS chain, to analyze emerging costs and to demonstrate the possibility of CCS projects to be commercially efficient. For Russian Federation such assessment has not yet been carried out, that is why the results obtained are of great importance for the evaluation of economic efficiency of CCS projects in general and conditions under which the projects start paying off in particular. Storage potential assessment It is widely believed that CO 2 storage potential in oil-fields is limited and can be of interest only at the demonstration stage of CCS projects. This is true only if CO 2 injection stops at the same time oil enhancement comes to an end - during EOR operations storage potential is quite scarce due to the fact that more than 70% of CO 2 mixes with the oil and emerges to the surface with it. However, after the EOR is finished, the oil field being fully equipped for CO 2 storage, it can be used as a CO 2 -sink just like saline aquifers or any other suitable geologic reservoir. In the latter case, the total storage potential is significantly higher: Q eor - CO 2 -enhanced oil recovery, Mt; Q cum - cumulative oil production, Mt; ρ oil, ρ co2 - densities of oil and CO 2 respectively, kg/m 3 Table 1 summarizes data on the storage potential of Russian oil-fields, both during EOR operations and after their completion, and on the amount of annual CO 2 emissions from power sector. Federal district Number of suitable oil-fields EOR storage potential, Mt Total storage potential, Mt Annual СО 2 emission from power plants, Mt/year North- Caucasian 8513,01266,369,66 Southern5712,84265,866,934 Northwestern40107,99339,669,149 Volga93290,885152,962,66 Ural30172,7534,39- Siberian928,79152,8644 Far Eastern817,9137,867,87 TOTAL322644,126749,89140,273 Table 1. Assessment of prospectivity of Russian regions for CO 2 storage CO 2 - source & sink maps To assess the CO 2 storage potential in different regions of Russia, an analysis of Russian oil fields has been carried out as well as the estimation of industrial development of each region (particularly, the number, capacity and location of coal and gas power plants). The figures show an example of the maps created for one of the most promising regions, Volga federal district. SDPP - State District Power Plant; CHPP - Combined Heat and Power Plant CCS prospectivity map Based on the developed maps and calculations, the regions have been classified according to their prospectivity: Highly prospective (there are numerous CO 2 sources and oil-fields large enough located no further than 300 km from each other); Prospective (there is at least one CO 2 source and at least one oil-field large enough located no further than 300 km from each other); Prospective for pilot projects (there are weak CO 2 sources and small oil-fields located no further than 300 km from each other); Limited prospects (there are both CO 2 sources and oil-fields large enough, but they are located at a significant distance from each other) Not prospective at the current stage of development (there are medium and large oil- fields but no significant sources of CO 2 ); Not prospective (there are no sources of CO 2 and/or oil-fields large enough). One can see that the most promising regions for CCS are situated in the Volga federal district - those are Bashkortostan, Tatarstan, Udmurt Republic, Perm Krai and Samara Oblast - highly-industrialized regions, having a large number of depleted oil-fields. CCS techno - economic model Economic assessment of the CCS technology cycle consists of three separate stages - cost assessments of CO 2 capture, transport and storage. All these stages are technologically diverse, but nevertheless they have to be integrated in a single system, where each element is related to the others by means of different parameters: e.g. the price of CO 2 for the oil company depends on the capture and transportation expenses; likewise, the amounts of CO 2 stored is closely linked to the amounts of CO 2 captured. In order to integrate all these parameters a techno- economic model of CCS was developed. The cost assessment of the CCS cycle was carried out on the basis of the following project: CO 2 is captured at the coal power plant Izhevskaya-2 CHPP (390 MW) and transported via pipeline to Pavlovskoye oil-field located 250 km from the plant. CO 2 capture CO 2 transport & storage The economic assessment is based on the methodology of Integrated Environmental Control Model, adapted to Russian prices. Table 2 contains the calculated results for CO 2 capture at Izhevskaya-2 CHPP. Capture costs (by technological process) Annual capital costs, million € O & M costs, million € Total costs, million € Cost per unit, €/MWh Coal combustion11,4428,2739,7215,59 NOx control0,461,582,040,80 TSP control0,651,532,180,86 SO 2 control1,125,816,922,72 CO 2 control28,9311,3440,2715,81 Water supply2,101,663,761,48 TOTAL44,7150,1994,9037,26 Table 2. Capture costs by technological process The cost of CO 2 capture itself can be derived from the equation: C prod new, C prod old - cost of electricity production with and without CO 2 capture respectively; Q – amount of CO 2 captured. For the reference case the capture cost is 21,76 €/tonne CO 2, annual amount of CO 2 captured is 2,52 Mt. The figure demonstrates the structure of capture costs for 1 tonne of CO 2. The cost of CO 2 transport directly depends on the distance from the source to the sink. The assessment of the transportation costs is based on the federal unified rates and conversion factors for September 2014 and is reflected in Table 3. By dividing the overall value by the annual CO 2 flow rate, one gets the cost of transport for 1 tonne of CO 2 - in the reference case it is 2,74 €. CostsValue, million € Main pipeline construction22,56 Compression station construction 15,56 Total capital costs38,12 Annual capital costs3,81 Pipeline O&M1,51 Compression station O&M1,59 Total O&M3,10 TOTAL COSTS6,91 Table 3. СО 2 transport costs CostsValue, million € Well drilling and completion66,06 Producing equipment installation 14,80 Injection equipment installation10,23 Installation of CO 2 recycle facilities 0,61 Total capital costs91,70 Annual capital costs9,17 СО 2 purchase15,44 Other O&M10,13 Total O&M25,57 TOTAL COSTS34,74 Table 4. СО 2 injection costs CO 2 injection costs were estimated based on empirical data from US oil-fields and are presented in Table 4. The cost of injection into the reservoir for 1 tonne of CO 2 is therefore 13,78 €. The figures demonstrate the NPV graph of the project and the relationship between oil price and CO 2 breakeven price. According to the latter graph, the project will stay profitable provided that the oil price exceeds 55 $/bbl. According to the calculations carried out, the storage potential of Russian oil-fields amounts to 6,8 Gt – which is enough to store all the CO 2 emitted by Russian power plants in the course of 40 years. The most promising regions for large-scale CO 2 -EOR deployment are situated in the Volga federal district: Bashkortostan, Tatarstan, Udmurt Republic, Samara Oblast, Perm Krai. As for pilot projects, those can be implemented in Dagestan, Kaliningrad and Sakhalin Oblast. The cost estimation was carried out on the basis of a coal power plant Izhevskaya-2 CHPP (Udmurt Republic) and Pavlovskoye oil-field 250 km away from it. The cost of CO 2 capture depends on the type and capacity of the power plant, amount of CO 2 emissions and the applied capture technology. For a 390-MW coal the cost of capture is 21,76 €/tonne CO 2, annual amount of CO 2 captured is 2,52 Mt. Transportation costs were calculated for pipeline transport and amount to 2,74 €/tonne CO 2. The key technological factors of influence are pipeline length and diameter. All in all, transport costs represent only a minor part in the cost of the whole CCS chain. Finally, the cost of CO 2 injection into the oil reservoir makes 13,78 €/tonne CO 2, which is a high estimation. Even despite high investment costs, the project is commercially efficient. In the course of 14 years while the project is in operation, 8,82 Mt CO 2 will be stores in Pavlovskoye oil-field, resulting in extraction of additional 14,97 million bbl of crude oil. To sum it up, an analysis of a breakeven CO 2 price shows that the project will pay off as long as the oil prices keep higher than 55 $/bbl.