Tees Valley Industrial CCS (ICCS) Cluster Conference Meeting Norway John Brady - 18th August 2015 - Prosin

Tees Valley Industrial CCS (ICCS)

  Cluster Conference Meeting
            Norway
       18th August 2015

          John Brady

NEPIC Leadership Team

   PEG                         Manufacturing                             Innovation
                                                                                                Marketing
                               & Productivity
          NEBR                                                                              & Communications
                 Skills & Resources             Energy        Supply Chain            TIG

Initiate a CCS project in                                Influence UK Government and other key
partnership with Industry including                      stakeholders by working on, and presenting a
some significant emitters                                coherent proposal/business case (including
                                                         funding mechanism) to facilitate an ICCS
                                                         project whilst protecting the competitive
                                                         position of any participating company.

Geographical Position

Why we need Industrial CCS:
 Industry coming under pressure from customers and
   Government to reduce carbon – 80% reduction in CO2 by 2050.
 At its maximum output, regional yearly emissions as high as 13M
  tonnes CO2
 The only technology available to significantly reduce industrial
  carbon emissions
 Can’t meet legally binding carbon targets without Industrial CCS
 Technologically proven at a commercial scale on industrial plants
 It’s an industry ‘game changer’ and builds on 2 existing CCS
  competition projects.
 Need to protect and build the existing industry
 Opportunity to attract new investments

Protecting and Building the Process Industry

   Across the region, 35K directly employed, further 200K indirectly
   Generates > £26bn of regional GDP (> 30%)
   Regions largest industrial sector
   High GVA
      £92,000 for UK Chemical industry - higher than automotive and
       aerospace
 High wages
      Process chemical industry wages higher in Teesside than the
       average UK chemical wage and the average UK wage
 Consistent trade surplus - £4bn exports

Recent Teesside Investments > £3bn
            Company              Expenditure
            SSI                  £1.9 billion

            Air Products         £600 million

            Sembcorp and SITA    £200 million

            SNF Oil & Gas        £150 million

            BOC Linde            £100 million

            Huntsman Tioxide     £65 million

            Lotte Chemicals UK   £60 million

The Present and Project Initiation

     Tees Valley bid for a CCS project as part of UK Government CCS competition
      but were unsuccessful
     TVU as our local LEP, bid for and awarded £1Million as part of City Deal to
      initiate an industrial CCS project – report back by summer 2015
     Number of core elements but essentially:-
        - capex/opex for capture technology at 4 industrial sites
        - construct and recommend a business case
        - recommend a funding mechanism to support investment
        - potential storage options/costs
        - first injection and storage targeted for early 2020’s
        - communications strategy
     Only place in the UK progressing an industrial CCS scheme

Delivery Partners

   Pale Blue Dot - Project Co-ordinator & Business Cases

   AMEC/Foster Wheeler - Engineering Contractor

   Societe Generale - Commercial Advisor

   Madano - Communications Partner

The Current Industrial Partners

   SSI – Blast Furnace ca 3-4M tonnes/pa
   Lotte – PET, ca 50K tonnes/pa
   Growhow – Ammonia plant, ca 600K tonnes/pa
   BOC – SMR, ca 250K tonnes/pa
   NEPIC (as PICCSI)
   National Grid
   Co-ordinated by Tees Valley Unlimited as the local LEP

Transport and Storage Options

 Onshore transport
      Pipe using existing pipe corridors
      Pressure – gaseous vs dense phase
      Truck to pipe network from smaller emitters
      Location of compressors likely to be close to SSI site
      Major environmental and ownership issues to be identified
      Optimal sizing to be determined

 Offshore Storage
      Two stores selected:
          Goldeneye – Shell agreed to provide information
          5/42 – National Grid agreed to provide information
      Need Third Party Access Terms and Conditions – storage tariff

Business Case and Investment Mechanism

   Business Case outputs including but not limited to:
      Business model inc Capex and Opex for 4 industrial sites
      Stress test for major cost elements
      Third Party Access Terms and Conditions for storage
      Ownership structure and risk sharing proposal
      Contract arrangements for oversized pipe and storage

   Commercial advisor outputs including but not limited to:
      Report on commercial issues associated with CCS in industry
      Independent report on bankability of project
      Potential finance sources plus what is needed to access these
      Mechanism which attracts investment into industrial CCS and would allow
       companies to finance FEED and reach FID
      IP Protection

Business Case and Investment Mechanism contd

 Economics of ICCS different to that of power:

  Cost of CCS can be supported in number of ways including CFD

  Competitive nature of globally traded commodity products means that
   industrial emitters are unable in the long term to afford additional cost of
   abatement and remain competitive

  Lack of an investment mechanism means no private company will develop
   ICCS without support

  Many Tees Valley industries considered relatively high credit risk

  Limited ‘green premium’ on products and a marginal impact of the UU ETS

Some Resulting Conclusions
 ICCS in Tees Valley is technically feasible and with public support is be
  commercially supportable.
 A significant opportunity to export considerable volumes of CO2
 Current study based on capacity to store ca 15M tonnes/year, but the initial
  reference case based upon ca 3Mt/year
 Infrastructure will have an operational life of at least 40 years and given existing
  and future ‘supplies’, reasonable to expect to operate well beyond the 20 year
  evaluation period
 Significant economies of scale result from additional users
 Cost of capture ranges are very varied - £50-205/tonne and dependent upon
  different industries and different scales
 Two initial investment mechanisms emerged as focus of further work:
     An emitter CFD model which provides for a volume based mechanism
     A storage driven model which helps to resolve a number of challenges
       associated with option 1

Communications Strategy

www.teessidecollective.co.uk

Use Of CO2 As A Raw Material Building Block

Commercial processes:
React with Ammonia                     Urea
React with Phenol                      Salicylic Acid (Aspirin)
React with an epoxide                  Cyclic carbonate ( new market demand ?)

                    Electrolyte for lithium ion battery

         Advanced lithium-ion battery plant located in Sunderland, with
         production of 60,000 units a year

          The first British-built LEAF EVs now being built in Sunderland from 2014, with
          initial annual production capacity of around 50,000 vehicles.

Infrastructure To Support Electric Vehicles

 Charge your Car was launched in North East England
in 2010.

 North East has over 300 charging points and is the
most connected region in the UK.

 In 2014, the North East region is a home to over
1,000 charging points, at key locations on streets, in car
parks, at residential and commercial locations such as
retail and leisure facilities.

Further Uses of CO2…….

NET Power www.netpower.com is a new oxyfuel power cycle that
combusts coal, natural gas, and biomass. It generates electricity that is
cost-competitive with the best fossil fuels plants while producing zero
air emissions.

The system uses supercritical CO2 as a working fluid instead of steam
thereby avoiding efficiency losses that steam experiences when it
transitions between a liquid and a vapour.

Solidia Technologies www.solidiatech.com
Solidia claim their material decreases CO2 emissions by up to 70% of what the
industry is currently achieving
How – they harden the cement in the concrete with CO2 instead of water - not
only conserves water by orders of magnitude, it also makes a better concrete,
which is stronger and more chemically durable.

Thank You

       John Brady

     www.nepic.co.uk
     www.nebr.co.uk
www.teessidecollective.co.uk