The UKCCSRC is supported by the Engineering and Physical Sciences Research Council as part of the Research Councils UK Energy Programme Future UK Coal & CCS Options Workshop Thursday 7 February 2013 at the University of Edinburgh St Trinnean’s Meeting Room, St Leonards Hall, 18 Holyrood Park Road, EH16 5AY Notes taken by Claire Bastin, University of Leeds1 KEY QUESTIONS a) Will the UK want to build coal plants in the future? (For power, but also chemicals and perhaps SNG too) b) What forms would these coal plants take? (Full CCS from the start, partial CCS, CCS ready?) This will be considered by application and also new build or retrofit including conversion of existing and future gas plants to coal). When will there be a place for underground coal gasification? c) What locations could be used? Cooling, coal delivery, CO2 transport, public acceptance, grid connections etc. d) What capacity are we likely to need to be able to do this? (Know‐how, people, facilities, industry capability, etc.) e) What is needed to keep sites etc. available ‐ a coal + CCS‐ready strategy for UK infrastructure? g) How extensively will biomass be used in new coal plants or in new plants, with CCS? h) What R&D is needed (specifically related to coal) and is this underway?” 1 http://www.see.leeds.ac.uk/people/c.bastin 1 Workshop notes Speakers Opening/Introduction Mike Farley welcomed attendees. Mike Farley Context for workshop: John Hayes MP, UK Energy Minister speaking at WCA meeting ‘putting the coal in coalition’ statement. Head of Electricity Market Reform and head of OCCS, reiterate thoughts that coal (with CCS) likely to be on the increase in UK electricity production and other industry, and, especially, worldwide. Coal use stats in brief ~forecast 40‐50% of electricity generated (ref?) Key questions for the day introduced: a) Will the UK want to build coal plants in the future? (For power, but also chemicals and perhaps SNG too) b) What forms would these coal plants take? (Full CCS from the start, partial CCS, CCS ready?) This will be considered by application and also new build or retrofit including conversion of existing and future gas plants to coal). When will there be a place for underground coal gasification? c) What locations could be used? Cooling, coal delivery, CO2 transport, public acceptance, grid connections etc. d) What capacity are we likely to need to be able to do this? (Know‐how, people, facilities, industry capability, etc.) e) What is needed to keep sites etc. available ‐ a coal + CCS‐ready strategy for UK infrastructure? g) How extensively will biomass be used in new coal plants or in new plants, with CCS? h) What R+D is needed (specifically related to coal) and is this underway?” Introductions from panel and delegates. Notes on Chatham House rules, i.e. no attributable minutes, but questions addressed and themes developed will be recorded and a report to DECC produced by the chair, Mike Farley. 2 COAL USAGE Current uses of coal in UK power and industry. Quantities and locations. Nigel Yaxley Sources of coal, main transport routes. Prices of coal, at point of use. Contributions to make‐up of price (mining, shipping, in‐country transport) Projections on use and price (vs gas) and reserves (by region) Presentation: Coal is fastest growing energy source (BP Statistical Review 2012) worldwide Coal’s share of energy production ~40%. Map of coal import/exports shows significant volumes from Australia and Indonesia to China. For UK, flexibility in coal use volumes comes from flexibility in import arrangements rather than coal production in UK. Cost of UK coal production and transport (inc e.g. UK Sea Freight Mark‐up), together with distressed coal prices from US (increase in shale gas ‐> lower gas price and increase demand for gas, reduced demand for US coal in US ‐> lower export price) makes it non‐competitive. International Energy Agency (IEA) outlook (Nov 2012): New policy scenario expects inclusion of climate change mitigation measures e.g. CCS rather than business as usual projections (BAU). May be unrealistically optimistic with regards to CC mitigation measures. DECC projection on coal use suggests decline in use of coal as feedstock to 2030, with difference in output absorbed by increase in renewables and natural gas. Reserves: UK reserves in UK 20+ years, resources 100+ years, but unlikely to be exploited. World: Gas 60 yrs reserves/90 years resources. Coal – 114 yrs reserves/2000 yrs resources. NB: political and contested definitions for resources. 3 Current and future industrial uses of coal ‐ China experience Andrew Minchener Presentation: Global coal consumption rising dramatically especially in China and Asia Pacific. World/China consumption (approx. Mt): 1990:4695/1050 2000:4817/1500 2011: 7792/3700. China’s coal use has more than doubled in the period and accounts for much of the increase in world consumption (Buraya 2012 cited). Growth also in renewables, but less so than coal. Diversity in energy production but coal use has fuelled China’s economic growth. China’s coal use: largest % (55) for power, also used for iron and steel, cement production, coal to chemicals e.g. synthetic fuels. Very small % export (0.3%). More ‘spread and diversity’ in uses for coal than typically found in C21st OECD countries. New plant approval requires 600MW minimum and new environmental controls. Smaller, older plants still form large part of stock, but plan is to remove these. China’s strategic plan is to focus on technologies which remove GHG and non‐GHG. 2014 emission standards to be introduced to limit mercury, particulates, NOx, SO2 Operational and design phase CFBC & IGCC projects discussed. Timescales from project concept to operational typically 12‐18 months (e.g. IGCC Greengen plant, ). Policy and governance context allows for speedy operationalization. Options for CO2 utilisation being explored in e.g. food and beverage market. Forecast of coal use suggests continued increase to plateau circa. 2030. CCS (or CCU&S) required for emissions to decline. Summary: China can move quickly in development of coal + CCS projects. Increasingly taking leadership role. 4 Coal to Liquids, SNG Paul Lawrence Presentation: Proven coal reserves. Industrial and commercial uses for coal other than for power generation: Coal to liquid & SNG – ‘substitute’ (i.e. rather than synthetic) natural gas CTL: political, business and economic drivers for CTL especially where coal infrastructure exists Review of technologies and markets for CTL presented suggests China, Mongolia, USA, Poland (i.. with high coal production and/or infrastructure and use) likely markets for CTL Barriers include: economic uncertainty, regulatory uncertainty, lack of skills in CTL. EPC – 2‐3 times increase/uncertainty in costs. Long (and relatively untested) project development schedules means uncertainty exacerbated. Advantages include: tested technology, alternative to crude, can be upgraded to jet/diesel. For coal producing nations, increased energy security. SNG: Clean (def required) fuel suitable for home use, compatible with natural gas in emissions. Provides opps to monetise otherwise stranded energy (shale gas, biomass, coal bed methane(CBM)) Operating plant – Great Plains, North Dakota, USA. Discussion on whether CTL/SNG makes economic sense at scale. Very high capital costs and poor/untested ROC. Why coal is an attractive fuel for a new power plant Steven Marshall Total specific CO2 emissions for each use (cf natural gas, LNG, shale gas, shale gas+LNG, and gas to liquids) Relative costs (eg per tonne of steel, cement, or MWH of clean electricity) for alternative fuels. Clean Coal Energy Project: (Partnership ‐ Petrofac, Summit Power, Caledonian Clean Energy) Presentation: Under existing conditions, fossil fuels are required to supply base load energy in UK (and other OECD) For UK, coal good option (rather than gas) as security of supply, and relative price stability i.e. when compared 5 with gas. Gas process are volatile and rising (see slide index linked to 1987) To meet CO2 reductions and NOx, SOx legislation, need to have CCS and CO2 abatement technologies in place to continue to use coal. Two critical points: costs and commercial viability not proven. BAT (IGCC, CCEL) not proven. Social importance of coal mining, power, heavy industry Philip Pearson Presentation: TUC involved in working with Trades Unions in other EU nations e.g. Poland where greater climate scepticism exists. Coal with CCS projects and opportunities often in former coal mining communities with high levels of deprivation and unemployment. Example of Yorkshire & Humber CCS cluster‐ CO2Sense report on economic and commercial viability of project. CCS offers potential for constructions jobs as well as benefits to the supply chain. Policy uncertainly makes it difficult to encourage private sector investment (current government does not understand CCS + coal infrastructure). Energy Intensive Users Group in TUC together with Centre for Low Carbon Futures identified benefits of including investment in EI industry to foster moves towards green economy. Report is available at http://www.tuc.org.uk/tucfiles/52/EIITechnologyInnovation.pdf. Also, clean coal task group produced roadmap available at tuc.org.uk/industrial Barriers to coal + CCS adoption: lack political leadership, social acceptance, political uncertainty – e.g. industrial policy and energy policy are not in agreement, jobs and skills 6 Questions/discussion: PANEL: Nigel Yaxley, Andrew Minchener, Paul Lawrence, Steven Q1: Carbon price and tax will ‘kill the patient’ before it happens i.e. will ruin chances for adoption/reduce funding Marshal, Philip Pearson options. Many others in the room supported this view. R1: Fossil fuel with carbon capture not seen as a low carbon energy option. If it is to be considered as a low carbon option, then should have ‘equal footing’ in policy, governance and funding terms. R2: Need to establish whether the future for coal is recognised by government.