Cofiring, CCS and Risk.

Okay, I've not been posting for a few months.

A few things have happened since then - the governemnt said yes, in principle to coal fired power stations, simultaneously re-anouncing the same money that had already been announced a few months earlier (actually less a bit).
They're calling for CCS from startup.

That should be possible, but understandably carries a big risk to the energy companies which they want to mitigate.

It's not about wrigging out, but about putting a limit on the cheque they have to sign if unexpectant things happen.

Perhaps this is why RWE are apparently pulling out of building new coal fired power stations in the UK.

To add to this picture the UK's first CCS plant has gone live - up on the Forth estuary, scotland.

Bloomberg have also written a piece about cofiring and dedicated wood burning plant. Remember that dedicated plant, whilst earning more ROCs (so making more money) are less efficient, so if there's a squeeze on the supply of wood give you less electricity for the same fuel supply.
RWE ag opperate in the UK under the name npower (RWE npower).

The big 6 energy companies

The big 6 energy companies (Centrica, EDF Energym, E.ON, RWE Npower, Scottish and Southern Energy and Scottish Power) met today with the Energy and Climate Change Committee, with the results being available online. To save you listening to it all, I've done it.

In summary expect more short time price drops, but then probably nothing for a while (the wholsale price of gas is not seeming to drop in the longterm). Also expect lots more gas fired power stations (up to about 60%), applications for planning permission for nuclear within 18 months - 2 years, and government legislation over smart meters.

09:20 - Eon are hopeful of cutting prices soon
09:27 - so will the other three who have yet to cut prices (commercial decision which has not yet been made).
09:29 - Wholesale prices rose by 75% whereas domestic prices rose by 30%, so the energy companies shouldn't have a windfall profit.
09:36 - Ofgem has found that prices don't follow wholesale prices up quickly but down slowly
09:39 - Summer 2010 wholesale prices are 10% up on summer 2009 prices. Centrica want to reduce prices, but don't expect to be able to do so based on current projected wholesale prices
09:52 - EDF are convinced that Nuclear is an essential part of the UK energy mix
10:06 - Pre-payment cost is around £100 extra per customer (ofgem figures) - made up of cost of meter (10-12 times more expensive), cost to serve the customers more often, cost to run the point of sale system. Extra profit is £97 per person.
10:09 - OFGEM state that the average dual fuel prepayment customer is £11 less profitable than the profitability of a direct debit customer.
10:16 - After 3 years of consultation by government we still haven't had smart meters. They are already in Italy and Holland where the government managed to consult within 18 months.
10:17 - Payback on smart meters is 5-6 years, but churn is 20% - so companies who install meters will not see their investment returned - hence they don't want to fit at the moment.
10:18 - 10 000 normal meters are installed every day.
10:19 - Electricity companies can't even get in the same room to debate this, so government please mandate us. "We're fighting like ferrets in a sack, someone needs to come and shake the sack".
10:20 - Companies really can't agree on what needs doing - will keep on fighting on this, it must be a regulated government decision.
10:25 - The OFGEM inquiry has reduced the cost recovery associated with prepayment meters by about £20 - from about £120 to £100.
10:32 - Remember the direct debit increase fiasco (a few months ago)? The suggestion is that this is because customers use more over the winter than the summer, so direct debits should increase over the winter.
10:37 - Dual fuel discount isn't a discount, it's a premium applied to customers who only take gas.
10:38 - 40% of customers who switch tariffs end up paying more than before they switched (remember that some customers switch at bad times or onto fixed tariffs).
10:50 - Absence of certainty about carbon price is key problem regarding new build
10:52 - 14 GW needed by 2018, 7GW gas being built, 6GW gas getting permission. Coal being worked up, 1GW of biomass being worked up plus extra 1GW of something else being worked up. We will end up with a gas system.
10:52 - 5GW (46 projects) of renewables under construction. Credit crunch pushes capital price up by 30%. Can raise money, it's available.
10:53 - Short term economics damaged by 1-2%, although equipment prices have stopped increasing, they not reduced. Slow down in announced investment because of this.
10:54 - £100 million invested in gas storage in Yorkshire. If everything goes ahead we will have more daily delivery than anything we have ever seen.
10:54 - Taxation, 75% tax on gas that is put into storage - energy companies want to make this money back. Suggest that government could help with this.
10:56 - By 2020 60% of our electricity will come from gas, 80% will be imported (by 2018). Eon are investing £500 million to try and help this - so are others.
10:58 - If planning system works renewables might make up to 30%. Massive grid investment is required, and regulated rate of return is not enough to make people want to invest into grid connections. It is a fixed regulated rate of return and is not enough when priced against the cost of money.
11:00 - Feed in tariff is required for up to the community level. Want to set up businesses to address micro generation and micro heat. RO is most successful policy intervention since privatisation.
11:01 - Spending more on R&D than have ever done so since privatisation (before privatisation it was almost a little wasteful). RO has boosted R&D spend.
11:02 - RO banding is not quite enough to support some of the largest projects (especially offshore wind). E.g. London array is being scaled back - "function of economic reality". If returns / regulatory uncertainty isn't there Europeans will spend elsewhere.
11:03 - Scottish power will spend same in 2009, 2010 on renewables as they did in 2008, regardless of current economic climate.
11:05 - This industry is investing £10bn a year, in this country, for the foreseeable future.
11:08 - Nuclear profitability is set by carbon price and planning. First onstream by 2017. Other three units built in years that follow that by the same team. Coal and CCS must take a role, which it can.
11:09 - Existing plans are for a like-for-like replacement.
11:10 - Planning is the major issue with nuclear - a CCGT at Pembroke took more than four years - what will it be for nuclear? Dreadful?
11:11 - Hopefully fewer delays with new planning laws. Absence of a decision (presumably from government) is the problem.
11:11 - First few reactors must be being built by 2013 - 2014. No nuclear reactors currently in the planning process. If past is guide to the future will not get as many reactors as hoped. Expect planning requests to be submitted next year / 2011.
11:13 - Skills shortage, but trying to fill it with UK companies (Rolls Royce, Manchester Uni). Trying to pool skills for UK jobs.
11:15 - Large scale CCS is fundamental to coal. Beyond 2020 will not build power stations without it.
11:17 - If the competition doesn't complete then terrible signal to industry over coal. Competition appears to be slipping, target date should have been announced in June.
11:18 - We have been overtaken on CCS knowledge over the last four years.
11:18 - Coal is an absolutely fundamental part of the energy mix.
11:19 - Kingsnorth shouldn't go ahead without CCS (I think this was said by Eon).
11:20 - Why is there so much of a delay in bringing in CCS? Whose fault?
11:20 - 300MW can be put into longannet by 2014.
11:20 - Everyone involved in competition is "dreadfully frustrated" over the delays.
11:22 - Fuel poverty - "We are an energy company, we do not know who is in fuel poverty". Last year there were £10bn of unclaimed benefits - this should be the issue rather than international energy prices.
11:23 - Data sharing, which is coming on stream, should help - by data has not yet arrived.
11:24 - This is also a housing stock issue, rather than a benefits issue. £3.7bn from industry. That's a lot of money - a big commitment from the industry.
11:25 - One company is insulating about 1000 homes a day.

Europe fights back

Europe has now proposed to spend €1.25bn on carbon capture and storage.

The plan includes monday for Longannet, Kingsnorth, Tilbury and Hatfield - an IGCC power plant.

Will this be enough? I don't know.
Does this make the compentition pointless? I don't think so.

Not very helpful this morning am I.

RWE freezes new coal investment inside of EU

Power Engineering is reporting that RWE will not build any new coal fired power stations in western europe.

This is big news.

"A result of full auctioning of CO2 rights from 2013 RWE will suspend large scale coal or lignite power plant projects in western European countries such as Germany and the UK".

Power stations that have begun construction will be finished - and new ones might be re-started once the price of electricity rises to sufficient levels.

My understanding is that this cancels Blyth and Tilbury. I might be wrong.

I thought that Tilbury was entered into the UK governments CCS competion, maybe I'm wrong?

Update: The Guardian have a slightly more in depth piece, and suggest the Tilbury will go ahead. I'm not sure how far the planning for Blyth is.
This also could not affect very much - and just be RWE rattling the sabre - afterall there were ammendments going through the EU parliament on Carbon trading the other day.

The CCS competition

The governments carbon capture and storage competition today took an interesting step with RWE purchasing Peel Energy - one of the three prequalifiers left in the competition (BP has pulled out).

This leaves Eon (Kingsnorth), RWE (Tilbury, but perhaps Blyth) and Iberdrola / Scottish and Southern (Longannet) - three massive, multi-national, companies.

The competition is now going to be fierce.

PANiC Stations

A new day, a new Greenpeace sponsored NIMBY organisation.



I'm loosing count now of many branches Greenpeace either has or sponsors.

The latest offering is at Blyth power station up in Northumberland. I still can't figure out what the protesters want to achieve. If they're successful in their aims of preventing the replacement of Blyth all RWE will do is re-furbish it, carrying on at the current (lower than optimal) efficiency. That means more CO2 - at the request of the protesters.

Barmy.

P.S. Love the name - reminds me of how people choose project names in academia.

CCS competition

Interesting.

BP have just announced that they have pulled out of the governments CCS competition - leaving just three competitors (Kingsnorth [Eon], Longannet [Scottish & Southern], Peel power) in the mix.

What's even more interesting is that RWE are trying to force a judicial review to get their power stations back into the competition.

The competition does take a long time, and it's interesting to try and work out what could be fitted with CCS (by the competition) within the relevant timescales.

The answer is perhaps Blyth (or so I've heard), a proposed RWE power station in Northumberland; the competition is dragging so much that investement decisions have to be made prior to the outcome.
Whilst CCS can of course be retrofitted the companies just may not wish to go down this route.

Of course the EU's ban on coal fired power stations may just stop everything.

A CCS roadmap

I was recently at the Coal Research Forum biannual conference. It's a pleasent affair - three good meals a day, interesting presentations and a chance to sit in the bar and chat with other people from around the country.

The opening presentation was given by Dr. Mike Farley from Doosan Babcock - they're the people who build the power stations and are also looking to build capture plants.
Part of his presentation included a roadmap for CCS.
Unlike the road map for the middle east these are so close to completion that they are more of a historical document!
Two of his slides are below.



Amine capture roadmap



Oxycoal combustion roadmap


I like to see things like this. It cheers me up. It suggests that the UK can take a global lead on a technology that is seen by the IEA as providing a 19% drop in global CO2 emissions.

Another good bit of news from today is the press release from RWE, announcing that the capture demonstration unit on their combustion test facility is nearly ready. Not exactly power station sized, yet - but a vital link in the chain.

CCS - ready when?

Getting CCS ready for commercial use is a complex affair - it's never been tried before at the scale required on power stations.

This is something which requires money - and if this money is not available the whole project can be set back.

Theage has just published something suggesting that CCS won't be in a position to contribute to the countries energy mix before 2020.
That's possible.

We shouldn't forget though that this applies to economies as a whole, and that to get it this far we need to apply the technology to individual power stations - which means CCS will be used well before this date.
For example, if we could get two learning cycles in before this date we're likely to assist in strenghening this deadline.
http://www.co2storage.org.uk/Publications/UKCCS/Gibbins08.pdf

Largely this is happening - amine capture (which is regarded as the most promising type of CCS in the short term) is being demonstrated with RWEnpower at Didcott, and then Aberthaw by around 2010.
I would guess that the governments CCS competition winner would also use this technology.

So;

CCS by 2020? Yes, of course.

CCS capturing 90% of the emissions of a power station by 2020? Probably a policital rather than a technical challenge.

CCS in in all of the countrys power stations by 2020? Possibly not.

CCS by 2020

I know that lots of people won't believe this. You probably should trust me though, I'm an engineer.

RWE yesterday began construction on a test scale carbon capture plant.
This is the post combustion plant, where the technology is most developed.

They say, in this article, that CCS will be ready for commercial oporation by 2020 - almost 10 years time.

This is interesting, not only to meet to EU 2020 targets, but also because Al Gore yesterday told America to stop burning fossil fuels over the next 10 years.
He wants the fuels not to be burnt so that they won't emit carbon. Clearly not heard of CCS then!

Four ways to capture CO2

I recently attended an even at the IChemE (Institute of Chemical Engineers) which presented the four (perhaps three-and-a-half) methods of capturing CO2.

What strikes me is how far down the production path these four methods are.

Flue gas scrubbing
This is the traditional approach, with the CO2 being scrubbed from the flue gasses just before they all go up the chimney.
Progress: A test plant is being built at the RWE test rig at Didcott, oxfordshire. This is due to be scaled up for a larger pilot plant, to be built at Aberthaw power station. At 1MW the pilot plant will be 1/300th of the size of the plant envisaged by the governments competition, so whilst it's small it is essential. The next step after this will probably be a commercial sized plant.

Oxycoal combustion
This is a new approach, where coal is burnt in a CO2 / oxygen mix. Since there is little nitrogen in this mix the combustion gases can, pretty much, just be piped straight underground (okay, some treatment is required).
Progress: Doosan Babcock is to build a 40MW test rig to prove the concept.

Gasification
Known as an IGCC plant the coal is gassified leaving a gas stream of just CO2 and water.
Progress: The components for the Hatfiled IGCC have been ordered, and provided nothing goes wrong it will be built and running by 2013.
Capture on this is obviously very easy, and the technology has been well proven.

Gasification and oxycombustion
A clever bunch of people at Jacobs engineering have worked out a method of burning the gasified coal gas, in pure oxygen and then sending the gas through a gas turbine and boiler to extract energy.
It's a great idea.
Progress: A demonstation plant is due to be built next to the Hatfield site.

All told it all looks very promising!