| CCS | Wolfgang Dirschauer | Vattenfall Europe 1 Our future of Clean Coal: CO 2 -free power plants Wolfgang Dirschauer Vattenfall Europe

| CCS | Wolfgang Dirschauer | Vattenfall Europe 2 CO 2 -emissions – a global perspective

| CCS | Wolfgang Dirschauer | Vattenfall Europe 3 The reality of electricity generation others 2,1% Contribution of primary energy to global electricity production 2004 fossil fuels 66,1% nuclear 15,7 % hydro 16,1 %

| CCS | Wolfgang Dirschauer | Vattenfall Europe 4 Our goal Develop a reliable and profitable coal-based electricity and heat generation while complying to ambitious and long-term global climate targets Twin tactics: Efficiency and Clean Coal / CSS As soon as legally, technologically and economically feasable, all our plants will be carbon-free and climate-neutral. That means we will build new plants carbon-free and retrofit or close down old plants (Dr. Klaus Rauscher, CEO Vattenfall Europe, FAZ )

| CCS | Wolfgang Dirschauer | Vattenfall Europe 5 Why Carbon Capture and Storage - CCS ? The world – especially the growing economies of the newly industrializing countries - will not stop using fossil fuels Coal is the one fossil fuel which combines the greatest potential with the strategic optimum Coal may face a renaissance as the fuel of choice of global industrialization, non-power business will grow Carbon Capture and Storage (CCS) is the only technology with the potential to significantly reduce CO 2 -emissions while still using fossil fuels, especially coal CCS is therefore a key technology for developing a climate- friendly energy system based on the realities of fossil fuel potentials

| CCS | Wolfgang Dirschauer | Vattenfall Europe 6 Fuel – generation - storage – the abstract CO 2 is captured either pre or post combustion within the power plant CO 2 is purified, compressed, transported and stored in deep poriferous rock formations (gas and oil fields, saline aquifers)

| CCS | Wolfgang Dirschauer | Vattenfall Europe 7 Possibilities for storage and usage Storage: Saline Aquifers Depleted gas and oil fields Usage: Enhanced Gas/Oil Recovery

| CCS | Wolfgang Dirschauer | Vattenfall Europe 8 CCS – the three links of the chain Development of technological concepts Cost-reduction Verification and test- runs Transfer of known concepts Development of infrastructure Test the concepts Determine the potentials and accessability Analysing environmental risks Creating trust Develop the legal framework CaptureTransport Storage

| CCS | Wolfgang Dirschauer | Vattenfall Europe 9 Efficiency and CCS – partners, not rivals The expected net-efficiency for coal-fired power plants is % in 2020 CCS is being developed on a parallel timeframe More efficiency in power plants is needed to compensate for the systemic energy loss in the CCS-chain

| CCS | Wolfgang Dirschauer | Vattenfall Europe 10 Comparison of CCS Technologies source: European Platform for Zero Emission Power Plants - ZEP

| CCS | Wolfgang Dirschauer | Vattenfall Europe 11 Post-combustion

| CCS | Wolfgang Dirschauer | Vattenfall Europe 12 Pre-combustion (IGCC)

| CCS | Wolfgang Dirschauer | Vattenfall Europe 13 O 2 /CO 2 combustion - Oxyfuel economiser process steam condensate

| CCS | Wolfgang Dirschauer | Vattenfall Europe 14 Why Oxyfuel Technology ? Our reasons for Oxyfuel: Power plant process with high efficiency potential Highest capability in CO 2 - separation Comparable to conventional water-steam power plant processes High availability robust estimates for upfront investment and operational costs, based on conventional power plants

| CCS | Wolfgang Dirschauer | Vattenfall Europe 15 The roadmap to our future CO 2 -free power plant Test-Installation 0,5 MW th Pilot-Plant 30 MW th Demo-Plant MW th Commercial Power Plant >1.000 MW th Testing of components Confirm science and tech base Integration of components Optimise the installation Validate the ccs technology chain Optimise the efficiency Integrate into transport and storage system Competitive electricity generation costs

| CCS | Wolfgang Dirschauer | Vattenfall Europe 16 Schwarze Pumpe – the actual site

| CCS | Wolfgang Dirschauer | Vattenfall Europe 17 Our Oxyfuel Pilot Plant

| CCS | Wolfgang Dirschauer | Vattenfall Europe 18 The model (view from south/east ) Boiler house FGD CO 2 -plant ESP Cooling towers ASU Switchgear building FGC

| CCS | Wolfgang Dirschauer | Vattenfall Europe 19 The actual building site (status: 13th of august 2007) Switchgear building Foundations for ESP, Stack, FGD, FG- Cond. Steel boiler structure Air separation unit (ASU) Coolingwater pump Cooling tower CO 2 plant

| CCS | Wolfgang Dirschauer | Vattenfall Europe 20 The crucial question: the price of climate policy Our target: 20 t/CO 2

| CCS | Wolfgang Dirschauer | Vattenfall Europe 21 The risks The cost of developing and implementing new technologies The future of ETS as a global instrument The timely development of a global post-2012 climate regime Legal und regulatory framework Public opinion (double-phase-out hysteria)

| CCS | Wolfgang Dirschauer | Vattenfall Europe 22 Thank you for your attention !

| CCS | Wolfgang Dirschauer | Vattenfall Europe 23 Key Messages Vattenfall is determined to be a CCS frontrunner. CCS will be our best practice for fossil fuel fired power plants asap. CCS is crucial for fossil-fuel dependant developing countries and the growing economies of China and India. This is all the more important considering the potential for coal in industrial processes, especially coal-to-liquid. There is no silver bullet to master the climate change challenge. But no scenario short of a climate world government (or dictatorship) comes up with a world energy system NOT extensively using coal (and gas/oil). Efficiency gains are indispensible, but also insufficient to make up for the growing energy needs of a growing world populace and world economy. CCS is a necessary part of a mix of instruments. It can serve as a crucial transitory technology to bridge the gap to a renewables-based energy system. It might also be a bridge to future technologies enabling us to make use of the CO 2. A scenario with ambitious and strict emissions restrictions but without CCS could seriously endanger Germanys energy security and international competitiveness. Depending on the nuclear energy issue and the market-readiness of renewables, a phasing out of coal in the German energy mix would endanger our industrial basis and cause massive economic and social disruption. On a global level, without CCS coal (and other fossil fuels) will most likely be used nonetheless, only then with a definitely more serious impact on climate change.