Perspective on a CAT Strategy - Way Forward and Benefits Nick Otter Director of Technology and External Affairs, ALSTOM Power Ltd and Chairman of UK Advanced.

Perspective on a CAT Strategy - Way Forward and Benefits

Nick OtterDirector of Technology and External Affairs, ALSTOM Power Ltd

and

Chairman of UK Advanced Power Generation Technology Forum

APGTF Forum 2004

London

25/November/04

APGTF Forum 2004 CAT Strategy Issues Nick OTTER 25Nov04 2

Energy Equipment/Systems Supply Company

- ALSTOM Power : world-wide supplier of power

generation plant, components and services

Viewpoint

Advanced Power Generation Sector- UK Advanced Power Generation Technology Forum (APGTF) - European Industry : EPPSA/ EUnitedTurbines

EC Networks - Thematic network on CO2NET, CAME-GT, POWERCLEAN- Representative of European industry and researchers- EU-25 wide PowerClean


AN OVERALL PERSPECTIVE


Near Term Global Position

Significant impact of increased liberalisation, de-regulation and privatisation

3

02 04 06 08 0

1 0 01 2 01 4 01 6 01 8 02 0 02 2 0

5 3 5 8 6 3 6 8 7 3 7 8 8 3 8 8 9 3 9 8 0 3 eO rd er Year

An

nu

al

Ord

ers

[G

W/a

]

2 m ajor grow th cycles in the past led by N A M . C h inese boom in 2003?

Sources: B D /M I, R D I N ew gen M ay 2003- G T & ST >= 3 M W , & H ydro >=10 & D iesel >= 1 M W- before 1974: data poor & exclud ing d iesel.H ydro estim ated from U D I- orders at risk of cancella tion inc luded

N A M

LA M

C hina

A sia

M E A

E urope

50 Y ears M arket D evelopm entO rder V o lum es by R eg ions

P ost W W IIeconom ic

developm ent

O il cris isL ibera lization &em erg ing A sia

U S m erchantsem erge

M arket In te lligence / M arke t / M K 516 JN /10 12 2003

Future growth - importance of

developing countries

- upsurge in China and Asia


Long Term Energy Market

Different needs world-wide- uneven access to modern energy

Growth of Renewable Energy but ….

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

GW

Gas Coal Hydro Other renewables Oil Nuclear Fuel cells

AfricaE. AsiaChinaPacificEuropeNorth America

Middle East

Transition economies

South Asia

Latin America

0

100

200

300

400

500

600

700

800

900

$ b

illio

n (2

000

do

llars

)

IEA projections of global power station

build to 2030

Capacity

Investment

IEA World Energy Outlook 2003

Continuing reliance on fossil fuels– especially likes of China and India


0

20

40

60

80

100

120

140

1 6 11 16 21 26 31 36 41 46

OthersHydroNuclearConventional SteamGas Plant (GT & CC)

Age ofPower Plant

Source: UDI, BD/MI

GW 1054 GW >= 30 Years

1%

30%

3%

61%

5%Tot. Installed 2002 : 3791 GW

GW Volume of plants reaching 40 years of age, by year:

Average 35 GW / a

0

10

20

30

40

50

60

2000

2001

2002

2003

2004

2005

2006

2007

LAM

MEA

China

Asia

North America

Europe

Installed Base Capacity - Aging Fleet

• Over 1/4 of world-wide capacity is more than 30 years old

….. a lot in the developed world


Power rationing threatens UK industry

Security of Supply

THE SUNDAY TIMES 24/August/03

Increasing concerns regarding supplyIncreasing concerns regarding supplyincreasing concerns regarding supplyincreasing concerns regarding supply

EC Green Paper on Security of Supply

Total new demand: 500 GW

VGB 2003


Environment– Increasing recognition of

Global Climate Change and impact of GHGs?

Environmental Implications

importance of environment as a driverimportance of environment as a driver

1Oct04

11Oct04

– Longer term : 60% reductions by 2050?– How to engage of Emerging Market Economies?– Impact of Emissions Trading?– Emerging stricter regulation?

– Short term : Kyoto 2008-12, proving hard to meet? Boost from Russian approval ?

The Times22Nov04


All measures will be required

No one single winning technology– complementary actions

Broad portfolio approach necessary– energy efficiency, REN, fossil, nuclear

Development of energy technology will be essential

Clean use of fossil fuels : a critical transition for decades yet in getting to a

sustainable energy future

`Helicopter` Viewpoint


UK POSITION

APGTF Input to the debate


DTI working to establish a Carbon Abatement Technology (CAT) Programme for Fossil Fuels– Power Generation but also Industrial Processes– Efficiency through to Carbon Capture and Storage– Link to Fuel Cell/Hydrogen/Sustainable Issues– established the Advisory Committee on CAT

DTI commissioned activity to position the UK– Initiated a special bridging call of CCT R&D Programme– Review of CCT R&D Programmes– Feasibility of CO2 Capture and Storage and EOR-CO2 in UK– Supported Missions to US/Canada/Australia– Recommendations from Advanced Power Generation

Technology Forum [APGTF]

UK Carbon Abatement Activity

Aim to produce a Carbon Abatement Strategy by end of 2004Aim to produce a Carbon Abatement Strategy by end of 2004



DTI commissioned activity to position the UK– Initiated a special bridging call of CCT R&D Programme– Review of CCT R&D Programmes– Feasibility of CO2 Capture and Storage and EOR-CO2 in UK– Supported Missions to US/Canada/Australia– Recommendations from Advanced Power generation Technology

Forum [APGTF]





DTI commissioned activity to position the UK– Initiated a special bridging call of CCT R&D Programme– Review of CCT R&D Programmes– Feasibility of CO2 Capture and Storage and EOR-CO2 in UK– Supported Missions to US/Canada/Australia– Recommendations from Advanced Power Generation

Technology Forum [APGTF]




Provision of affordable, acceptable and available low emissions power plant

Provide UK industry with global market opportunities out to 2030

Contribute to UK wealth creation/quality of life Help achieve CO2 goals while providing security of

supply : on the way to 60% reduction by 2050

APGTF Strategy for UK

In context of Energy White Paper ……including global aspects

Power Plant Types : Pf + fgd/IGCC/GTs/Fuel CellsCO2 Capture : Post combustion/Pre-combustion/Oxyfueling

Fuels : Coal, Gas and Biomass


Strategic Trajectories

CarbonReduction

Time

Ìncreased Efficiency`

Trajectory : “E”

`Zero Emissions`Trajectory : “C”

Near-term Mid-term Long-term

Zero emissions will need the most efficient plant

Key issue will be value of CO2

Essential part will be capture, transport, storage and use of CO2


Carbon Management Strategy for Fossil Fuels

Must be developed with the following in mind– Long term time frame : out to 2030 and beyond– Technology needs to be ìn-tune` with market to engage investors– Recognition of need for early industrial benefits

Must contain the overall approach of– Increased efficiency, fuel flexibility and re-powering

– Near-zero emission with CO2 capture and storage

– Link to Hydrogen issues or long term sustainable `vision`

Must include aspects of– Research and technology development– Component and system validation– Demonstration/`Lighthouse` Projects

Must embrace non-technical issues as well as

technical

Research and Technology

Validation of Technology

CO2 Protocol, Legal, Health, Safety, Perception,..

2010 2020 2030LighthouseProjects

Non technicalissues

Technology

Increasing complexity in-tune with market development


Products

UNDERPINNING UNIVERSITY RESEARCH

Demonstrations/Lighthouse Plant

Structure and Interactions

2005+ 2010+ 2020+

EngineeringPreparation Studies forPotential

DemonstrationPlant

and linkedprogrammes

CARBON ABATEMENT TECHNOLOGY PROGRAMME Collaborations and Technology Transfer

BATRetrofit

EORRetrofit

HighEfficiency

CCS Plant

Ultra HighEfficiency

CCSAdvanced

`C`

È`

Any development needs to be in tune with the market

capture ready


UK CAT Programme

Basic Research

Components and TechnologyVirtual Demonstration

Physical DemonstrationSystems

Social Research

APGTF RecommendationsCarbon

AbatementTechnology

SustainableEnergy

Research

Improved Industry/Academe Interaction

Technology Transfer

DTI

EPSRC

ESRCalongsideNew/REN

Programme

In line with

TSEC and

UKERC


Potential Implementation

Industry-driven RD&D Programme- existing programmes to continue

- engineering/economics studies for demos- participation in international programmes

Technology Transfer- engage future customers + export opportunities

- examine ènablement` issues

Academe Research Programme - feed into Research Councils/TSEC/etc and UK Energy Research Centre

Measures for closer industry/academe cooperation- encourage development of new technologies and skills


0

500

1000

1500

2000

2500

2000 2010 2020 2030 2040 2050

Year

Ele

ctri

city

Gen

erat

ion

(P

J)

Wave

CHP

PV

Biomass

Offshore wind

Onshore wind

Waste

Hydro

Nuclear

GTCC (CO2 capture)

GTCC

Ex. Coal

Fuel Mix in Electricity Generation - 60% CO2 Reduction in 2050 (limited Energy Efficiency)

0

500

1000

1500

2000

2500

2000 2010 2020 2030 2040 2050

Year

Tran

spo

rt E

ner

gy

Use

(P

J)

Electricity

Hydrogen

CNG

Biodiesel

Methanol

Kerosene

Gasoline

Diesel

Fuel Mix in Electricity Generation - 60% CO2 Reduction in 2050 (limited Energy Efficiency)

Importance of CCS and Hydrogen

Technologies in 2020-2030

EWP DTI Techno-Economic Studies : Time Issues


20202004 20122008 2015

CCS operationalCommence

build

Demooperational

CommenceDemo

Immediate Issues to be addressed :-• Design Studies• Performance Standards• Monitoring & Verification• Legal & Regulatory

Need to initiate a Carbon Abatement Technology

Programme now

Indication of Timeline for UK

Part of DTI CCT Call 4


Industry-led Programme£5mpa £5mpaEngineering Studies

UK-sited demonstration £10mpa(with £20mpa from industry)

EU Collaboration (FP6/7, COST, RFCS, ….)£2mpa £2mpa

£1mpa

Technology Transfer£2mpa £2mpa

Year 0 1 4

Possible level of UK Government Funding Support

International Collaboration (CSLF, US-UK MoU, …)£1mpa

£10 mpa £20 mpaIncreasing view that CAT for fossil should attract an equivalent amount as Renewable

Technologies


• EU/EC Initiatives- FENCO : pan-EU government action on Clean Fossil PG- POWER21 : EU industrial initiative to establish technology priorities for European critical mass programme on Clean Fossil PG including demonstration requirements- EC FP6 : move towards IPs and possible `Lighthouse Projects` - EC COST : follow-up Materials RTD action for steam and gas plant- EC Networks : Clean Power Systems - POWERCLEAN

Gas Turbine Systems - CAME-GT CO2 Capture/Storage - CO2NET2

- EC Technology Platform : Hydrogen and Fuel Cells

- EC Quick Start Projects : HYPOGEN initiative

Complementary European Actions

Potential for proactive role for UK within Europe ….


Programmes

EU “Critical Mass” Initiative for Carbon Management of Fossil Fuel

Co-ordinated Action : FENCO

Governments Stakeholders

Basis for European

Technology Platform - RTDD

Strategy for Europe

EC RTDD

UK UKCAT Programme

D DCOORETEC

Other Member State Programmes

EU Critical Mass

Programme


European Technology Platform

Meetings in October-November/04 to take forward initiative

Several EU organisations addressing issue of

`Sustainable Energy from Fossil Fuels`

EUnited Turbines

EUROGIF

EPPSA EURELECTRIC

EURACOAL

VGB

Fuel suppliers

Equipment and Systems

GeneratorsFull `chain` approach

EU Oil/Gas Producers


OtherCountries

eg AustraliaCanada

FuturegenVision 21

USA

FP6 & FP7COST

EU

DevelopingMarkets

Technology Transfer

UKIndustry led programme

plusAcademic Research

Demonstration/Lighthouse Projects

International Links

Large International Initiativessuch as CSLF/IPHE

Collaboration needs to be an essential `CAT` element


Some Concluding Remarks


Ùncertainty and Change` will continue– difficult to forecast future; no one single winning technology;

broad balanced portfolio approach– fossil fuels will continue to play a major role for decades yet– clean use of fossil will be a key transitional issue

– impact of a real value for CO2 - Emission Trading/Tax implications; market could change dramatically

– really tough to get new advanced technologies into the market placeconsistent policy for confidence to underpin private sector

investment and RTDcorrectly targeted market based measures/incentives for

technology take-up

Final Concluding Thoughts …. 1


2005 - a Year of Opportunity for UK– upcoming leadership of G8 and the EU– real chance to influence on the European and world arena– importance of Global Climate Change– engagement of Emerging Market Economies

Final Concluding Thoughts …. 2

Innovation and continued technology development will be Innovation and continued technology development will be essential to meet the complex demands of the futureessential to meet the complex demands of the future

but ……it needs to be done from a position of strength requiring– definition of UK CAT strategy recognising the importance of

collaboration - within UK, within Europe and in full international scene– backed up by a `reasonably sized` CAT government programme to

provide the `springboard` for industry– complementary to and alongside other energy technology initiatives


APGTF STRATEGY FOR TECHNOLOGY RD&D

IN FOSSIL POWER GENERATION

www.apgtf-uk.com

www.alstom.com

Perspective on a CAT Strategy - Way Forward and Benefits Nick Otter Director of Technology and External Affairs, ALSTOM Power Ltd and Chairman of UK Advanced.

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