Economic assessment of the whole CCS technology cycle
Ksenia Sidorova, PhD student
Department of Organization and Management, National Mineral Resources University
(St. Petersburg, Russia)
Email: ksenia.sidorova@inbox.ru
Storage potential assessment
Abstract
Carbon Capture and Storage (CCS) is currently regarded as a promising option to
reduce the emissions of CO2 into the atmosphere and mitigate climate change.
This technology is especially beneficial for countries whose energy systems are
based on fossil fuels.
CO2 capture
CO2 storage
in a geological
reservoir
CO2 Transport
Despite the significant potential of CCS, currently it is at the initial stage of
development, not least because of its high capital costs. One of the ways to increase
the investment attractiveness of CCS is the injection of CO2 into depleted oil-fields
for enhanced oil recovery (EOR-CO2). According to initial estimates of certain
regions, such application of CO2 can recover high capture costs of the project.
In Russia the government expresses certain interest in the CCS technology, especially
EOR-CO2. The oil industry being the main driver of Russian economy, it can also serve
as a platform for environmentally significant innovations.
The key objectives of this research are:
- to evaluate the potential of Russian oil fields to
serve as CO2-sinks;
- to develop a techno-economic model of the CCS
chain, to analyze emerging costs and to
demonstrate the possibility of CCS projects to be
commercially efficient.
For Russian Federation such assessment has not
yet been carried out, that is why the results
obtained are of great importance for the
evaluation of economic efficiency of CCS projects
in general and conditions under which the
projects start paying off in particular.
http://radiogreenearth.org/blog/wp-content/uploads/2012/03/Global-warming.jpg
It is widely believed that CO2 storage potential in oil-fields is limited and can be of interest
only at the demonstration stage of CCS projects. This is true only if CO2 injection stops at
the same time oil enhancement comes to an end - during EOR operations storage
potential is quite scarce due to the fact that more than 70% of CO2 mixes with the oil and
emerges to the surface with it. However, after the EOR is finished, the oil field being fully
equipped for CO2 storage, it can be used as a CO2-sink just like saline aquifers or any other
suitable geologic reservoir. In the latter case, the total storage potential is significantly
higher:
Return of investment
NPV
Breakeven CO2 price
Oil prices
Discount rate
Taxes and charges
Capture cost per 1 tonne CO2
Economics model
Construction costs;
Other capital costs;
O&M costs;
Electricity cost
Economics model
Capital pipeline costs
Capital compression costs
O&M pipeline costs
O&M compression costs
Table 1 summarizes data on the storage potential of Russian oil-fields, both during EOR
operations and after their completion, and on the amount of annual CO2 emissions
from power sector.
Table 1. Assessment of prospectivity of Russian regions for CO2 storage
Annual СО2
Total storage
Number of
EOR storage
emission from
Federal district
potential,
suitable oil-fields potential, Mt
power plants,
Mt
Mt/year
North85
13,01
266,36
9,66
Caucasian
Southern
57
12,84
265,86
6,934
Northwestern
40
107,99
339,66
9,149
Volga
93
290,88
5152,9
62,66
Ural
30
172,7
534,39
Siberian
9
28,79
152,86
44
Far Eastern
8
17,91
37,86
7,87
TOTAL
322
644,12
6749,89
140,273
Transportation cost per 1 tonne CO2
Pipeline diameter
Economics model
Well construction costs
Production equipment costs
Injection equipment costs
CO2 recycle costs
O&M costs
Type of the power plant
(pulverized coal, gas
turbine)
Base plant
Waste disposal
Capture costs (by
technological process)
Coal combustion
NOx control
TSP control
SO2 control
CO2 control
Water supply
TOTAL
Annual capital costs,
million €
11,44
0,46
0,65
1,12
28,93
2,10
44,71
Table 2. Capture costs by technological process
O & M costs,
Total costs,
Cost per unit,
million €
million €
€/MWh
28,27
39,72
15,59
1,58
2,04
0,80
1,53
2,18
0,86
5,81
6,92
2,72
11,34
40,27
15,81
1,66
3,76
1,48
50,19
94,90
37,26
CO2 injection
Volume of gas injected
Volume of gas stored
Volume of gas recycled
Injected СО2
Stored СО2
Recovered oil
Enhanced oil recovery
Residual oil in place
Hydrocarbon pore volume
Koval factor
Effective mobility
Heterogeneity factor
Gravity segregation factor
Aerial and vertical sweep
efficiency
Overall recovery efficiency
Cprodnew, Cprodold - cost of electricity production with and without CO2 capture
respectively;
Q – amount of CO2 captured.
For the reference case the capture cost is 21,76 €/tonne CO2, annual amount of CO2
captured is 2,52 Mt.
The figure demonstrates the structure of capture costs for 1 tonne of CO2.
NOx Control
2%
TSP Control
2%
SO2 Control
7%
CO2 transport & storage
The cost of CO2 transport directly depends on the distance from the source to the sink.
The assessment of the transportation costs is based on the federal unified rates and
conversion factors for September 2014 and is reflected in Table 3. By dividing the
overall value by the annual CO2 flow rate, one gets the cost of transport for 1 tonne of
CO2 - in the reference case it is 2,74 €.
Table 3. СО2 transport costs
Costs
Value, million €
Main pipeline construction
22,56
Compression station
15,56
construction
Total capital costs
38,12
Annual capital costs
3,81
Pipeline O&M
1,51
Compression station O&M
1,59
Total O&M
3,10
TOTAL COSTS
6,91
Table 4. СО2 injection costs
Costs
Value, million €
Well drilling and completion
66,06
Producing equipment
14,80
installation
Injection equipment installation
10,23
Installation of CO2 recycle
0,61
facilities
Total capital costs
91,70
Annual capital costs
9,17
СО2 purchase
15,44
Other O&M
10,13
Total O&M
25,57
TOTAL COSTS
34,74
CO2 injection costs were estimated based on empirical data from US oil-fields and are
presented in Table 4. The cost of injection into the reservoir for 1 tonne of CO2 is
therefore 13,78 €.
The figures demonstrate the NPV graph of the project and the relationship between
oil price and CO2 breakeven price. According to the latter graph, the project will stay
profitable provided that the oil price exceeds 55 $/bbl.
120
350
90
100
300
80
80
250
70
60
200
40
150
Income-costs
20
100
NPV
0
50
Emissions
Technological model
Technological model
CO2 flow rate
CO2 flow rate
Coal combustion
42%
CO2 Capture
43%
The cost assessment of the CCS cycle was carried out on the basis of the following
project: CO2 is captured at the coal power plant Izhevskaya-2 CHPP (390 MW) and
transported via pipeline to Pavlovskoye oil-field located 250 km from the plant.
-20
Water supply
4%
Based on the developed maps and calculations, the regions have been classified according
to their prospectivity:
•Highly prospective (there are numerous CO2 sources and oil-fields large enough located no
further than 300 km from each other);
•Prospective (there is at least one CO2 source and at least one oil-field large enough located
no further than 300 km from each other);
•Prospective for pilot projects (there are weak CO2 sources and small oil-fields located no
further than 300 km from each other);
•Limited prospects (there are both CO2 sources and oil-fields large enough, but they are
located at a significant distance from each other)
•Not prospective at the current stage of development (there are medium and large oilfields but no significant sources of CO2);
•Not prospective (there are no sources of CO2 and/or oil-fields large enough).
One can see that the most promising regions for CCS are situated in the Volga federal
district - those are Bashkortostan, Tatarstan, Udmurt Republic, Perm Krai and Samara
Oblast - highly-industrialized regions, having a large number of depleted oil-fields.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
0
-40
-50
-60
-100
СО2 price, euro/t
Fuel
CO2 cut
Water supply
Technological model
СО2 density
СО2 viscosity
Pressure loss
Reynolds number
Friction factor
Compression unit output
SDPP - State District Power
Plant;
CHPP - Combined Heat and
Power Plant
CO2 capture
The economic assessment is based on the methodology of Integrated Environmental
Control Model, adapted to Russian prices. Table 2 contains the calculated results for CO2
capture at Izhevskaya-2 CHPP.
CCS prospectivity map
The figures show an example of
the maps created for one of
the most promising regions,
Volga federal district.
The cost of CO2 capture itself can be derived from the equation:
Equipment performance;
Consumption of materials, water, energy;
Fuel consumption
Waste generation volumes
Contamination control
(NOx, suspended particles,
SO2, S, Hg, CO2)
To assess the CO2 storage
potential in different
regions of Russia, an
analysis of Russian oil
fields has been carried out
as well as the estimation
of industrial development
of
each
region
(particularly, the number,
capacity and location of
coal and gas power
plants).
Qeor - CO2-enhanced oil recovery, Mt;
Qcum - cumulative oil production, Mt;
ρoil, ρco2 - densities of oil and CO2 respectively, kg/m3
CCS techno-economic model
Economic assessment of the CCS technology cycle consists of three separate
stages - cost assessments of CO2 capture, transport and storage. All these stages
are technologically diverse, but nevertheless they have to be integrated in a single
system, where each element is related to the others by means of different
parameters: e.g. the price of CO2 for the oil company depends on the capture and
transportation expenses; likewise, the amounts of CO2 stored is closely linked to
the amounts of CO2 captured. In order to integrate all these parameters a technoeconomic model of CCS was developed.
CO2-source & sink maps
60
50
Conclusions
According to the calculations carried out, the storage potential of Russian oil-fields
amounts to 6,8 Gt – which is enough to store all the CO2 emitted by Russian power
plants in the course of 40 years.
The most promising regions for large-scale CO2-EOR deployment are situated in the
Volga federal district: Bashkortostan, Tatarstan, Udmurt Republic, Samara Oblast, Perm
Krai. As for pilot projects, those can be implemented in Dagestan, Kaliningrad and
Sakhalin Oblast.
The cost estimation was carried out on the basis of a coal power plant Izhevskaya-2
CHPP (Udmurt Republic) and Pavlovskoye oil-field 250 km away from it.
The cost of CO2 capture depends on the type and capacity of the power plant, amount of
CO2 emissions and the applied capture technology. For a 390-MW coal the cost of
capture is 21,76 €/tonne CO2, annual amount of CO2 captured is 2,52 Mt.
Transportation costs were calculated for pipeline transport and amount to 2,74 €/tonne
CO2. The key technological factors of influence are pipeline length and diameter. All in all,
transport costs represent only a minor part in the cost of the whole CCS chain.
Finally, the cost of CO2 injection into the oil reservoir makes 13,78 €/tonne CO2, which is
a high estimation.
Even despite high investment costs, the project is
commercially efficient. In the course of 14 years
while the project is in operation, 8,82 Mt CO2 will
be stores in Pavlovskoye oil-field, resulting in
extraction of additional 14,97 million bbl of crude
oil.
40
30
20
10
0
30
50
70
Oil price, $/bbl
90
110
http://esco-ecosys.narod.ru/2012_1/art102.htm
To sum it up, an analysis of a breakeven CO2 price
shows that the project will pay off as long as the oil
prices keep higher than 55 $/bbl.