Scholarly article on topic 'Carbon capture and storage in China — main findings from China-UK Near Zero Emissions Coal (NZEC) initiative'

Carbon capture and storage in China — main findings from China-UK Near Zero Emissions Coal (NZEC) initiative Academic research paper on "Environmental engineering"

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Abstract of research paper on Environmental engineering, author of scientific article — Bill Senior, Wenying Chen, Jon Gibbins, Heather Haydock, Mingyuan Li, et al.

Abstract The China-UK Near Zero Emissions Coal (NZEC) Initiative examined options for carbon (CO2) capture, transport and geological storage in China. It was developed under the 2005 EU-China NZEC Agreement which aims to demonstrate CCS in China and the EU. Collaborative research activities were conducted jointly by Chinese and UK experts from 30 organisations. China’s energy demand is expected to continue growing significantly; however the share of coal is projected to decrease to around 50% by 2050. For the power generation and energy intensive industrial sectors, all of which remain heavily dependent on coal, CCS is the only option that can ensure a significant reduction in CO2 emissions. A range of CO2 capture technologies in coal-fired power generation have been examined. The more promising, near term options are post-combustion capture using Monoethanolamine in a state of the art pulverised coal power plant and pre-combustion capture in an Integrated Gasification Combined Cycle unit. The cost of electricity generation with capture would be 463 and 413 RMB per MWh respectively for these options. Less mature capture technology options offer some potential to lower the overall cost, but this is within the range of uncertainties. Storage assessments were undertaken in two basins in North East China. These have potential to make use of CO2 for Enhanced Oil Recovery (EOR) although the reservoirs are geologically complex and well integrity may be a significant risk. While CO2 EOR would provide the opportunity for gaining initial experience with CO2 injection and storage, the capacity available for EOR in these regions appears insufficient for large scale CCS. It would therefore be necessary to assess and ultimately use saline aquifers for storage. An extensive saline aquifer formation has been identified in the Songliao Basin through the project. The average cost of electricity generation taking account of capture, transport and storage costs (assuming a storage site 200 km from the power plant) would be 470 RMB per MWh for the most mature capture options, an increase of around 200 RMB per MWh compared with a Pulverised Coal reference plant without CCS. This is equivalent to a cost of avoided emissions of about 280 RMB (US $50.0) per tonne of CO2. There are several challenges that need to be addressed for CCS in China. These include the extra cost and energy penalty of CCS, the novelty of the technology, the lack of regulations governing the storage of CO2 underground and the availability of the necessary equipment for deployment of CCS in China. The China-UK NZEC Initiative has shown that CCS could provide a key, low carbon option for coal-based industry in China, particularly for power generation, which would enable the continued use of coal with reduced greenhouse gas emissions. An Memorandum of Understanding was signed by the European Commission and Chinese Ministry of Science and Technology for Phase II of the China-EU NZEC Agreement in November 2009. Phase II will involve the selection of a demonstration project and the completion of a feasibility study. Phase III will involve the construction and operation of a CCS demonstration project in China.

Academic research paper on topic "Carbon capture and storage in China — main findings from China-UK Near Zero Emissions Coal (NZEC) initiative"

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Energy Procedía 4 (2011) 5956-5965

Energy Procedía

www.elsevier.com/locate/procedia

GHGT-10

Carbon Capture and Storage in China - Main Findings from China-UK Near Zero Emissions Coal (NZEC) Initiative

Bill Seniora*, Wenying Chenb, Jon Gibbinsc, Heather Haydockd, Mingyuan Lie, Jonathan Pearcef, Wenbin Sug, and Dan Ulanowskyd 1*

aSenior CCS Solutions Ltd; Mt Pleasant Cottage,Sly Corner, Lee Common, Bucks,HP16 9LD, UK bTsinghua University,Beijing, China cEdinburgh University, The King's Buildings,MayfieldRoad, Edinburgh,EH9 3JL, UK; dAEA,329 Harwell, Didcot, Oxon, OX11 0 QJ, UK eChina University of Petroleum, Beijing ,China; fBritish Geological Survey, Keyworth, Notts, UK gGreengen Co. Ltd, China

Abstract

The China-UK Near Zero Emissions Coal (NZEC) Initiative examined options for carbon (CO2) capture, transport and geological storage in China. It was developed under the 2005 EU-China NZEC Agreement which aims to demonstrate CCS in China and the EU. Collaborative research activities were conducted jointly by Chinese and UK experts from 30 organisations. China's energy demand is expected to continue growing significantly; however the share of coal is projected to decrease to around 50% by 2050. For the power generation and energy intensive industrial sectors, all of which remain heavily dependent on coal, CCS is the only option that can ensure a significant reduction in CO2 emissions. A range of CO2 capture technologies in coal-fired power generation have been examined. The more promising, near term options are post-combustion capture using Monoethanolamine in a state of the art pulverised coal power plant and pre-combustion capture in an Integrated Gasification Combined Cycle unit. The cost of electricity generation with capture would be 463 and 413 RMB per MWh respectively for these options. Less mature capture technology options offer some potential to lower the overall cost, but this is within the range of uncertainties. Storage assessments were undertaken in two basins in North East China. These have potential to make use of CO2 for Enhanced Oil Recovery (EOR) although the reservoirs are geologically complex and well integrity may be a significant risk. While CO2 EOR would provide the opportunity for gaining initial experience with CO2 injection and storage, the capacity available for EOR in these regions appears insufficient for large scale CCS. It would therefore be necessary to assess and ultimately use saline aquifers for storage. An extensive saline aquifer formation has been identified in the Songliao Basin through the project. The average cost of electricity generation taking account of capture, transport and storage costs (assuming a storage site 200km from the power plant) would be 470 RMB per MWh for the most mature capture options, an increase of around 200 RMB per MWh compared with a Pulverised Coal reference plant without CCS. This is equivalent to a cost of avoided emissions of about 280 RMB (US $50.0) per tonne of CO2. There are several challenges that need to be addressed for CCS in China. These include the extra cost and energy penalty of CCS, the novelty of the technology, the lack of regulations governing the storage of CO2 underground and the availability of the necessary equipment for deployment of CCS in China. The China-UK NZEC Initiative has shown that CCS could provide a key, low carbon option for coal-based industry in China, particularly for power generation, which would

* Corresponding author. Tel.: +44 (0)1494 837493 E-mail address: bill@senior-ccs.co.uk

doi:10.1016/j.egypro.2011.02.598

enable the continued use of coal with reduced greenhouse gas emissions. An Memorandum of Understanding was signed by the European Commission and Chinese Ministry of Science and Technology for Phase II of the China-EU NZEC Agreement in November 2009. Phase II will involve the selection of a demonstration project and the completion of a feasibility study. Phase III will involve the construction and operation of a CCS demonstration project in China.

© 2011 Published by Elsevier Ltd.

Keywords: Capture; Storage; Coal; China

1. Introduction

China is a rapidly industrialising nation, with a growing economy mainly supported by the use of coal. Under the 11th Five Year Plan, China is making progress to reduce the carbon dioxide intensity of its power generation system. This has included the introduction of wind, nuclear, solar and natural gas. At the same time, recognising that coal-fired power generation will continue to dominate the power sector for decades to come, China has undertaken a major programme of improvements, through the extensive introduction of modern coal-fired plant with increasingly higher energy efficiency and environmental performance. In addition, there is considerable interest in China in additional steps that might be taken to further tackle emissions, including the use of carbon capture and storage (CCS).

In 2006, China's State Council issued the Outline of the National Programme for Medium- and Long-term Science and Technology Development, for the next 15 years. Within this framework, in 2007, the Ministry of Science and Technology (MOST) published the 'Scientific and Technological Actions on Climate Change', including the intended progress on CO2 capture, utilisation and storage technologies, with the aim of:

• Developing key technologies and measures for CCS;

• Designing a CCS technology roadmap;

• Carrying out capacity building and establishing an engineering and technical demonstration project.

MOST is currently developing technology guidelines for CCS, which will define the objectives in relation to CCS technology in the period up to 2030 and identify key tasks for implementation during the forthcoming 12th Five Year Plan (2011-2015). MOST also leads a domestic R&D programme on CCS, largely undertaken by Chinese R&D institutes and universities.

The China-UK Near Zero Emissions Coal (NZEC) Initiative is a part of the wider China-EU NZEC Agreement, that was announced as part of the EU-China Partnership on Climate Change at the EU-China Summit in September 2005. The parties agreed 'to develop and demonstrate in China and the EU advanced, near-zero emissions coal technology through carbon capture and storage' by 2020. At the China-UK Summit 2009, both countries announced their support for the acceleration of the China-EU NZEC demonstration to 2015. The Memorandum of Understanding (MOU) for the NZEC Initiative was signed by MOST and the UK Government in December 2005, leading to the launch of the Initiative in November 2007. This Initiative brought together 19 Chinese and nine UK partners, including universities, institutes and industry, to answer a number of questions:

• What are the trends of energy use in China and what are the implications for use of CCS?

• What are the options for CCS in China?

• How could CO2 be captured from power plants?

• Where could CO2 be stored?

• What are the costs of CCS?

• What are the policy and regulatory issues that would affect the use of CCS?

This paper summarises the results of this work. A summary report [1] along with more information on these studies and project reports in both Chinese and English are available via the project website http://www.nzec.info/en/nzec-reports/.

2. Energy Use in China

In order to understand how the supply of energy and CO2 emissions in China may change in future, a number of energy scenarios have been modelled as part of the NZEC project, using projections of demand for energy services and assessment of potential energy supply technologies [2,3,4]. Coal provides about 70% of the primary energy used in China. The principal uses of coal are in industry, in power generation and for heating. Over 70% of China's power generation capacity uses coal. As an inexpensive and abundant energy resource with an established infrastructure, coal is very likely to continue to be the dominant source of energy in China for the foreseeable future (Figure 1). However, the large-scale use of coal has put significant pressure on China's ambitions for environmental protection, worker safety and abatement of greenhouse gas emissions. Although there is increasing deployment of renewable energy technologies and nuclear power plant, coal-fired power plant will continue to be built in large numbers for many years. Improvements are taking place, through development and use of larger and more efficient plants,

deployment of Supercritical and Ultra Supercritical technologies and closure of small stations [2]. China is a world leader in the use of cleaner coal power generation technologies.

Coal gasification and coal liquefaction technologies are being developed and deployed for large-scale application. Various types of coal gasifier are under development in China and others are being licensed-in. Existing gasifiers used in the chemical industry are being overtaken by newer types. There are a wide range of applications which include IGCC and the manufacture of fuels and products. Methanol and dimethyl ether are already manufactured from coal in commercial quantities; direct conversion of coal into liquid fuel is now being demonstrated and an indirect conversion process is also under development.

Figure 1: Energy Use and Energy Related Carbon Dioxide Emissions in China to 2050 (A scenario with consideration of existing and planned carbon mitigation policy options)

Due to China's rapid industrialisation, energy demand has increased dramatically in recent years. About 40% of total final energy consumption occurs in these sectors of the economy: iron and steel manufacture, cement manufacture, ammonia production, aluminium production and transportation [3]. Several of these involve large stationary sources of emissions which may be suitable sites for capturing CO2. The future demands of various energy-intensive industrial sectors have been projected in the NZEC work using assumptions about future social and economic growth. In order to provide some insight into the energy technologies that may be deployed in China between now and 2050, the Chinese energy system has been analysed using the "China MARKAL" model [4]. This is an energy-system optimisation model which can be used to examine the future development of energy supply under certain assumptions about future growth in GDP and population, changes in industrial structure and rate of urbanisation. The model minimises the cost of the energy system assuming a particular level and mix of final energy demand, primary energy supply, and power generation capacity. The model is then asked to meet the same energy service demands under specific constraints on CO2 emissions.

China's CO2 emissions in 2006 were estimated to be 5,650 million tonnes, of which coal-fired power generation accounted for 2,760 million tonnes [5]. With continuing economic development and improvement in living standards, the baseline projection from the NZEC analysis [4], shown in Figure 1, estimates growth in CO2 emissions of 2% per year in future, which is lower than the recent rate of growth. This change reflects improvement in energy efficiency and development of new and renewable energy systems. Emissions are expected to reach 9,500 million tonnes of CO2 per year by 2030 and 12,600 million tonnes of CO2 per year by 2050.

The carbon constrained scenarios in the model showed that for China's coal-dominated economy, with limited availability of renewable energy and no CCS, achievements of emission reductions would depend on deployment of nuclear power. For the deeper reduction scenarios, the model constructs up to 1000GWe of nuclear power. Such large scale deployment of nuclear power may be constrained by other factors such as site selection, public acceptance, investment, safety, and waste disposal which are not represented in the model. CCS technologies have also been examined using MARKAL as part of an alternative approach to meeting the more stringent emission targets; this showed that more than 400GWe of coal-fired power plants with CCS would be needed by 2050 as part of a portfolio of measures to achieve the lowest of the emission scenarios with a 36% reduction in cumulative

emissions for the period 2005-2050 relative to the business as usual scenario. Achieving even deeper reductions in CO2 emissions would need more CCS. This modelling indicates there is substantial potential for capturing CO2 in power generation.

3. Capture

Eight case studies were conducted to investigate options for capturing CO2 in coal-based power plants [6]. These studies incorporated capture as part of the design of new plants, considered retrofitting existing plant and one case examines the option of generating electricity and methanol in the same unit (otherwise referred to as polygeneration). The case studies have included detailed design of the plant, identification and costing of the components and estimation of the cost of electricity that would be produced. A number of important factors have been standardised, in order to define the operating conditions and emission standards applicable at the location of the plant. For example, it is assumed that each power plant is built in Tianjin City; two types of coal are considered in the designs (Shenhua and Datong coals) and once CO2 has been captured, it is dried and compressed to 11 MPa for transport to the storage site. The cost of building and operating these plants is based on prices for equipment supply in China. Estimated capital costs have been used to derive levelised costs of electricity and emission abatement costs on a consistent basis. The main features of each of the case studies are summarised below and results are presented in Table 1.

• Post-combustion capture in new construction. The basis for these studies is a pulverised coal (PC) power plant with 800MWe gross output using an ultra-supercritical steam cycle. Flue gas desulphurisation and equipment for removal of oxides of nitrogen are included. Several options for post-combustion capture have been examined, all using some form of chemical solvent scrubbing of the flue gas stream, these are:

■ Monoethanolamine (MEA), a solvent widely used for industrial CO2 capture;

■ Methyl diethanolamine (MDEA), another established solvent;

■ Aqueous ammonia, a new solvent;

■ A hollow-fibre membrane contactor used with MEA solvent.

• Post-combustion capture in existing power plant. Two types of plant were considered - one was a sub-critical power plant typical of the smaller units now in use, and the other a larger supercritical power plant, likely to be representative of units in the power plant fleet for years to come.

• Oxyfuel capture for two different applications with similar levels of CO2 capture:

■ A new build 800MWe pulverised coal plant

■ An advanced supercritical boiler is subsequently retrofitted

• Pre-combustion capture for a new IGCC plant, of sizes 400MWe and 800MWe, based on the design of the 250 MWe Greengen demonstration plant at Tianjin. In this study, CO2 is captured using Selexol solvent after a sour-shift reactor.

• Polygeneration case combining electricity and methanol production.

Plant Type Units Advanced Oxyfiring Post- Post- Pre- Existing Post- Post-comb

Supercrit. comb. comb. com 600MW comb Ammonia

800MW MEA Ammonia IGCC Supercritical MEA

Net Output MWe 824.3 672.5 621.5 670.3 661.7 574.1 398.1 435.6

Net %LHV 43.9 35.6 33.1 35.7 36.8 40.3 27.9 30.6

Efficiency

Capture 10.8 8.2 12.35 9.7

Penalty

Capex- RMB/kW 5850 8646 10735 9000 10049 5258 11110 9041

Specific net

Levelised RMB/MWh 271.3 368.9 463.2 398.3 412.5 270.1 512.4 431.9

CO2 g/kWh 796.6 98.2 105.6 98.0 95.4 868.2 125.2 114.4

Emissions

CO2 g/kWh 884.1 950.8 881.6 859 1126.9 1029.9

Captured

Cost of RMB/tCO2 139.7 277.8 181.7 201.4 326.2 214.6

CO2 v PC Plant

Abatement US $/tCO2 20.4 40.7 26.6 29.5 47.8 31.4

Table 1: Results of China Coal fired power and CO2 Capture Techno-Economic Assessment [6]

Table 1 summarises the calculated technical and economic performance of a range of coal fired power plant types with CO2 capture under Chinese conditions. A coal cost of 16 RMB/GJ and a discount rate of 10% over a plant life of 25 years are assumed. The load factor is taken as 85% (67.5% in first, commissioning year). Costs do not include financing costs and taxes. Other case study parameters are detailed in the project report [6]. The costs of CO2 transport to the storage site and storage and monitoring are not included. An exchange rate of 6.83 Yuan=US $1 was used based on average exchange rates for 2009.

Post-combustion capture (and compression) systems use a substantial amount of energy, so the output of the station is reduced substantially compared with a similar plant without capture. The effect on the efficiency of the plant is considerable, although the newer solvent (ammonia) offers some prospect of reducing this penalty. These capture systems could also be retrofitted to existing power stations. Because of the large amount of existing stock and the rapid rate at which new plant is being constructed at present, retrofit could be highly relevant for widespread application of CO2 capture in the future. The results show that the efficiency is reduced even more by the retrofit than by using capture in new construction (an extra 1 to 2 %-points reduction in efficiency); this is mainly because of the difficulty of adapting existing plant to supply the necessary steam to the post-combustion capture unit. The oxyfuel concept results show that the efficiency of the larger plant using oxyfuel capture is similar to that of using the new ammonia solvent in a post-combustion capture system. Retrofit of oxyfuel capture to the smaller plant, even with boiler and turbine upgrades, reduces efficiency by a larger amount, about 10%-points. For Pre-combustion capture with IGCC type of power plant the efficiency penalty due to capture and compression is 7.2%-points compared to a similar plant without capture.

Advanced new build capture technologies that have still to be demonstrated; oxyfiring, postcombustion with aqueous ammonia and pre-combustion capture on IGCC, are predicted to achieve similar power plant efficiencies of 35.6, 35.7 and 36.8% respectively. CAPEX values for these plants are approximately 9000 to 10000 RMB/kW net, with an estimated +/- 30% uncertainty. Levelised costs of electricity for these options are estimated to have a range of approximately 370-410 RMB/MWh for a coal cost of 16 RMB/GJ and approximately 40% higher for a coal cost of 32 RMB/GJ. Costs of abatement are calculated relative to the standard alternative plant that would be built, an advanced supercritical plant. Since the cost of abatement is based on the differences between relatively larger numbers there is more variance in the results, from an estimated 140 RMB/tCO2 (US $ 20.4) for oxyfiring to 200 RMB/tCO2 (US $ 29.5) for IGCC+CCS. These values are, however, very sensitive to estimates for capture plant costs, particularly the additional capital costs, and should be regarded as preliminary. Post-combustion capture with an MEA based solvent, an older technology, is predicted to have a generally less favourable performance.

Polygeneration of electricity and methanol also appears to have a low efficiency and high capital costs, but the methanol production is not taken into account.

The solvent processes needed for post-combustion capture are already established in other applications and have been demonstrated at smaller scale in power generation so should be readily applicable to commercial power plants, especially the pulverised-coal fired plant widely used today. Pre-combustion capture technology has been demonstrated at the scale required for use in power plants but the type of power plant that would host it, the IGCC, is not yet widely deployed. If and when IGCC plants are built in quantity, this could provide an attractive way of capturing CO2. Oxyfuel combustion is still in development but may well have potential in efficient coal-fired power plant if future development is successful. Other methods of capturing CO2 post-combustion are also under development. In all cases, a key driver will be to improve the efficiency of the capture processes.

4. Storage

The NZEC Initiative has evaluated the potential to store CO2 in two areas of North-East China - the Songliao and the Subei geological basins [7]. These desk-top assessments have been performed firstly at a regional scale, to provide a broad overview of the potential of each basin, and then on a site-specific basis, to provide more detailed assessments. The assessments have covered the capacity for storage, the sealing potential, and various aspects of the geological formation's ability to accept CO2. This work has covered just two basins. There are more than 30 large sedimentary basins across China, which may provide further opportunities for CO2 storage, which include the oil and gas producing regions of western China and large offshore basins close to southern and eastern China.

The Songliao Basin contains two large hydrocarbon fields, the Daqing and Jilin oil fields, in an area where there are substantial emissions of CO2 from power plants and industrial sources. The Daqing complex comprises numerous individual oilfields, seven of which were studied. The storage capacity of these seven fields was estimated to be about 593 million tonnes of CO2 of which two fields, the Lamadian and the Saertu, contribute 84%. Between 270 and 1300 million barrels of oil could be recovered by using CO2 for EOR in these fields; the precise level of recovery would have to be confirmed by site-specific tests. In the Jilin complex, five large oilfields were selected for initial assessment; their combined storage capacity was estimated at about 102 million tonnes of CO2. The additional oil which could be recovered through EOR from these was estimated to be between 46 and 230 million barrels. A pilot EOR project is underway in this complex. A large saline aquifer extends over much of this basin; its effective storage capacity has been estimated as 692 million tonnes of CO2 but could be greater, depending on the properties of the formation which will only be discovered by practical tests. A more detailed simulation and assessment around one site indicated a storage capacity of 288 million tonnes of CO2.

The smaller Subei Basin also contains mature oil and gas fields, as well as natural accumulations of CO2; only the onshore part of this basin has been examined. The basin is in a heavily developed region of North-East China with many major industrial sources of CO2. This basin contains a number of oilfields in the Jiangsu Oilfield complex, with total storage capacity of about 20 million tonnes of CO2. Use of EOR in the Jiangsu complex is expected to increase the total amount of oil produced by about 35 million barrels of oil. There are many aquifers in similar geological structures to the oil reservoirs but not much is currently known about them.

In general, the storage capacities of individual oilfields in these regions are small when compared with the annual emissions of power stations currently being built in China. The exceptions to this are the Lamadian and Sa'ertu oil fields. In addition, the reservoirs are typically geologically complex, so they would require a large number of wells to access the available storage capacity; this suggests the cost might be relatively high. For storage of substantial amounts of CO2, the capacity available for EOR would soon be used up so it would be necessary in addition to use saline aquifers. In Jilin Province, a case study has shown that major sources of CO2 are located within reasonable distances of possible storage sites. Active oil producing fields, where EOR is technically possible, provide credible opportunities for initial demonstrations of CO2 storage. However, significant further investigations, including detailed site appraisals, would be necessary before these fields or any other formations could be confirmed as technically and economically suitable for CO2 storage.

Some initial work on the risks of leakage and the containment of CO2 has been carried out as part of the NZEC Initiative. Studies have been done on the risk of escape from formations with good sealing characteristics in the Songliao Basin. Extensive faults were identified in some parts of the basin although the degree of faulting varies across the area. The presence of oil and gas trapped in some of these formations indicates that some of these faults are not leaking, which is a positive indicator for their possible use for CO2 storage. However, the high number of wells in the older oilfields, and their age, suggests there might be a greater risk of leakage (via wells) in those areas where there is a long history of oil production.

5. CCS Costs

The costs of CO2 capture in coal fired power generation in China are presented above. Some studies on transport and storage costs have also been conducted in NZEC. For large scale CCS it is assumed the captured CO2 would be transported by pipeline to the storage site. The size of the pipelines is selected on the basis of the peak flow rate. The annual quantity of CO2 delivered to store has been calculated to be 4.4 million tonnes per year for the pulverised-coal plant with MEA capture and 4.2 million tonnes per year for the IGCC with capture. The levelised cost of transport is calculated to be 12RMB per tonne CO2 for a distance of 100km or 26RMB per tonne CO2 for a distance of 200km. The precise location of a storage facility has not been identified in this project so only generalised assumptions about the storage installation can be used as the basis for costing storage. No estimate has been made of the cost of monitoring the stored CO2 but international studies suggest this should be small for commercial-scale projects. Based on the costs developed for an EOR project in the Caoshe onshore oil field, the injection facility would cost 228 million RMB. This would result in a levelised cost of about 6 RMB per tonne of CO2 stored.

The levelised costs of electricity generation calculated for the pulverised-coal plant with MEA capture and the IGCC with capture are 493 RMB per MWh and 440 RMB per MWh respectively; these include capital and operating costs and assume a storage site 200km from the power plant[1]. Within the uncertainties recognised above, there is no significant difference between the costs of these options, although some of the newer capture options may offer the prospect of being constructed and operated at lower cost. On this basis, the post-combustion capture and the pre-combustion capture options (together with transport and storage of the CO2) would each increase the levelised cost of electricity generation by around 200 RMB per MWh, equivalent to a cost of about 280 RMB per tonne of CO2 (US $ 50.0) avoided compared with the PC base-case.

6. Other Studies

The NZEC project included several other studies that cannot be adequately covered in this paper. The project reports are available via the project website http://www.nzec.info/en/nzec-reports/. These include:

• Emissions Sources and Source-Storage matching in Jilin Province, North East China

• CCS in Energy Intensive Industries

• Review of CCS Activities in China

• Stakeholder survey of CCS in China

• CCS Sustainability Assessment

7. Challenges

As a result of the major effort expended by the partners in this Initiative, the potential for CCS to address CO2 emissions in China is now becoming clearer. There are several challenges that need to be addressed, some of which also provide opportunities that may be of interest to stakeholders in China. The challenges include:

• The extra cost of CCS - adding such equipment to power plants would increase the energy used and cost of electricity generation;

• The novelty of the technology - not only are power plant operators unfamiliar with it, the regulatory authorities and the public have not yet heard about it either; nor are there any regulations governing the storage of CO2 underground;

• The availability of the necessary equipment for deployment of CCS in China is uncertain.

Adding the equipment necessary for capturing, transporting and storing CO2 to power plants or other industrial facilities will increase their energy use, and their capital and operating costs. In principle, the increased cost of electricity generation might be recovered in one of the following ways: through higher prices, or subsidy, a carbon price signal or international financing mechanisms. External funding could help offset the additional cost of using CCS, such as by using the flexible mechanisms of the Kyoto Treaty. The Clean Development Mechanism (CDM) has the potential to assist in introducing this technology in China but, at present, CCS is not yet accepted for projects under the CDM. When CCS is deployed on a wider scale and in greater numbers, it is very likely that the cost of the technology will come down, as has happened with related technologies in China. Further development of CCS technology will also bring improvements in the level of energy use, in system improvements by better integration and in plant specification - all of these will help reduce (but not eliminate) the additional cost of CCS.

One of the major hurdles facing any new technology is the simple fact that it is new. As a result, power plant operators are not familiar with it and may be reluctant to use it. Furthermore, the regulatory authorities will not have decided what rules should apply to novel aspects of the system, such as storage, which adds to the operator's difficulties in planning a new project. The general public may come into contact with it, perhaps because they encounter pipelines or storage facilities, and ask whether CCS is safe - without clear answers from someone they trust, this can raise concerns. The key is for power plant operators, oil and gas companies and other industries to gain experience with all aspects of the process through construction, commissioning and operation of a large-scale CCS unit. If EOR were also be demonstrated, this would provide experience for potential storage operators. The NZEC Initiative has shown the relative attractions of the different capture technologies and has identified locations where CO2 might be stored. On this basis, some options for demonstration have been identified. Further experience can be gained through the increasing number of CCS projects being undertaken in collaboration with other countries.

Issues associated with regulations, particularly concerning the storage of CO2 underground but also the safety of pipelines carrying CO2 and the environmental impact of CCS plants, may need to be resolved in order to facilitate deployment of CCS in China. The survey carried out by the NZEC Initiative has demonstrated how gaps in regulations are being dealt with in other countries. China has an opportunity to observe and draw lessons from the experiences of other countries in deciding how it wants to proceed with developing regulations.

Depending on the type of CCS technology implemented, much of the equipment may be constructed in China but other components may need to be imported. A full analysis of this important issue has not been carried out in the NZEC Initiative but, given that CCS is based on application of known technologies, it seems likely that locally-supplied equipment would be able to meet many of the requirements of a CCS project, such as boilers, steam turbines, pipelines and equipment for injecting CO2 underground. Certain process equipment might be licensed from manufacturers in other countries, such as CO2 separation technology or some types of air separation unit but even gas turbines are now constructed by local joint venture companies who might be able to provide the necessary equipment for a demonstration project, thereby minimising the extent to which imports are needed. Further down the road, if CCS is demonstrated in China with locally-sourced equipment, the capabilities of Chinese manufacturers to exploit the experience they have built up in such projects should enable them to compete to supply key components to CCS projects in other countries.

Recognising the global need for reduction in greenhouse gas emissions from coal use, and the major role that coal will continue to play in energy supply to China, the use of CCS has the great advantage that it would provide China with the opportunity to take action on climate change without greatly affecting the use of coal as its predominant

fuel. The scale of any single plant means that CCS would involve major investment but this would be the case with any substantial project in power generation or in any energy-intensive industry. When considered in relation to other measures for making deep reductions in CO2 emissions, not only has CCS the potential to be relatively inexpensive (per tonne of CO2 avoided) but it also offers the opportunity to generate income, e.g. through EOR. EOR also provides the opportunity for learning about the relevant technologies and demonstrating the use of domestically-sourced equipment. In the longer term, establishing a presence in the CCS field would provide business opportunities for Chinese equipment suppliers both at home and abroad.

6. Conclusions

The China-UK NZEC Initiative has shown that CCS could provide a key low carbon option for coal-based industry in China, particularly for power generation applications. This would enable the continued use of coal with much reduced greenhouse gas emissions. The various development and deployment approaches that have been considered within the China-UK NZEC Initiative have provided valuable experience while also establishing the basis for further UK-China cooperation. In order to reach the position where Chinese CCS stakeholders can be fully informed of the challenges and opportunities, further R&D and associated capacity-building activities and outreach are required. This needs to involve a wider range of stakeholders, in particular a greater involvement of industry. The continuation of the China-EU NZEC agreement in two further phases is an important part of that process, since its objective is the successful demonstration of an integrated CCS system, ideally by 2015. The formation of a China-EU Cooperation Leading Group will provide strong support to take forward this joint CCS initiative. At the same time, it is recognised that, since the start of the NZEC Initiative, China has also established other CCS-related cooperative activities with Japan, Australia and the USA. Accordingly, it is important to ensure that these projects are complementary, to maximise use of resources and the potential for learning.

7. Acknowledgements

The China-UK NZEC Initiative was a joint initiative by the Ministry of Science and Technology of the People's Republic of China and the United Kingdom Department of Energy and Climate Change (DECC). The participants and contributors were: The Administrative Centre for China's Agenda 21; AEA; Alstom Power; Andalin Consulting(Andrew Minchener); 3E Research Institute of Tsinghua University; BP Clean Energy Research & Education Centre of Tsinghua University; British Geological Survey; British Petroleum; Cambridge University; China United Coalbed Methane Corporation; China University of Petroleum of Beijing; China University of Petroleum of Huadong; Chinese Academy of Sciences; Cranfield University; Department of Environmental Sciences & Engineering of Tsinghua University; Department of Chemical Engineering of Tsinghua University; Department of Thermal Engineering of Tsinghua University; Doosan Babcock; Edinburgh University; Energy Research Institute; Greengen Corporation; Heriot Watt University; Imperial College; Institute of Engineering Thermophysics of the CAS; Institute of Policy & Management of the CAS; North China Electric Power University; Paul Freund; Schlumberger; Shell; Thermal Power Research Institute; Wuhan University and Zhejiang University. The contributions of all involved are gratefully acknowledged.

8. List of References

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- [5] International Energy Agency (iEA), World Energy Outlook 2008, OECD-IEA, Paris (2008)

- [6] Gibson, J et al, Carbon Dioxide Capture from Coal-Fired Power Plants in China Summary Report for NZEC Work Package 3 (2009)

- [7] Pearce J. Et al, CO2 storage potential in selected regions of north-eastern China: regional estimates and site specific studies. (2009)