Barriers and challenges to CCS: an industry view

International CCS Conference, Beijing Gwen Andrews Vice President, Power & Environmental Policies, Asia & Oceania 28 July 2011

Three main activities

Rail transport infrastructure Power generation infrastructure
Alstom makes 1 metro in 4 and 1 tram in 4Alstom supplies major equipment for 25% of the worldwide installed power generation capacity

Power transmission infrastructure

Leadership in key markets and fast-growing technologies (disconnectors, GIS, HVDC )

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Power Technologies for all energy sources

Gas Life Cycle Management Coal

Hydro

Nuclear
(Conv. Island)

Oil

Wind

Presentation Title -UK - 30th March 2011, London02 - P P 2010 - P 3 Addressing the Climate Change Challenge mmm- yyyy - 3 3 Clean Power Day Presenters Initials - dd - PJ - Sep

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Geothermal

Biomass

Solar

CO2 from fossil fuel combustion

World energy-related CO2 emissions
Gt CO2 30 28.8 Gt in 2007

World energy-related CO2 emissions by sector

Others Residential, services & agriculture 20

Power generation
10 Industries

0
1880 1900 1920 1940 1960 1980 2000 2020
Source: Adapted from CDIAC 2004 Source: IEA 2009

Transport

Presentation Title - Presenters Initials - dd mmm yyyy - P 4

Power generation represents >40% of CO2 emitted by fossil fuels

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Power market trends

CO2-free

45% of the market will be in CO2-free technologies

Fossil fuels

45% 55%

Large Gas Turbin e

Large Steam Boilers Turbin e

Heat Nuclear/ EnvironRenewable Gene- Recover Conv. mental Heat y rators Island Plant Exchangercontrol Steam systems Hydro Wind Generato r

Energy mgmt

(*)

Fossil fuels are still dominant

Asia

More than 60% of the new PP market will be in Asia

0 60

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Alstoms Clean Power Strategy

Alstom is the world leader in clean integrated solutions
Emissions CO2 (Gt/y)

N 1 nuclear* & biomass

Technological mix
* Conventional islands

Wind, solar & geothermal Efficiency CCS

N 1 hydro

Efficiency: Plant optimisation & retrofit

Ref 2 3 Realistic 2 3 Target

First CO2 capture demo plant in the world

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

CO2 Capture, transport and Storage

Capture Power plants

Transport Pipelines Ships Storage Depleted Oil and Gas fields Enhanced Oil/Gas Recovery Saline Aquifers

"If CCS technologies are not available, the overall cost to achieve a 50% reduction in CO2 emissions by 2050 will increase by 70%"
International Energy Agency

CCS is a must
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

CCS is needed
World energy-related CO2 emission savings by policy measure in the IEA WEO 2010 450 Scenario

Source: IEA WEO 2010

CCS provides for 20% of global emissions reductions

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

CO2 Capture Technologies

CO2 capture technologies pursued by Alstom

Post-combustion (New + retrofit)

Oxy-combustion (New + retrofit)

Chilled Ammonia Advanced

Amines

Oxy combustion with Air Separation

Unit

Chemical Looping Combustion

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Alstom activity on demonstrations 1st and 2nd Generation CCS

Completed Operating
2 Gen

Under Construction

AEP Mountaineer USA - 58 MWth Chilled Ammonia, Coal

Vattenfall Schwarze Pumpe Germany - 30 MWth Oxy - Lignite

Total Lacq France - 30 MWth Oxy - Gas 2 Gen

RFCS EU - Darmstadt Germany - 1 MWth Chemical looping, Coal

TCM Mongstad Norway - 40 MWth Chilled Ammonia - Gas

EDF Le Havre France 5 MWth Adv. Adv. Amines - Coal

Pre-commercial Projects
NER3 NER3

EoN Karlshamn Sweden - 5 MWth Chilled Ammonia -Fuel

Dow Chemical Co. DOE/Alstom Windsor US 3 MWth USA, West Virginia Adv. Amines - Coal Chemical looping, Coal

ON HOLD
Drax - Selby UK - 426 MWe Oxy Hard Coal NER3 Vattenfall Jnschwalde Germany - 250 MWe Oxy - Lignite Transalta Canada - >200 MWe Post - Coal NER3

WE Energie USA WI - 5 MWth Chilled Ammonia, Coal

Alstom BSF Windsor Alstom Labs Vxj US - 15 MWth Sweden 0.25 MWth Oxy - Coals Post C. multi purpose NER3

ON HOLD
PGE Belchatow Poland 260 MWe Adv. Amines - Lignite AEP Mountaineer USA 235MWe Chilled Ammonia - Coal Getica - CET Turceni Romania >250MWe Chilled Ammonia - Lignite

Presentation Title - Presenters Initials - dd mmm yyyy - P 10

: Applied for EU ETS New Entrant Reserve funding

Selected for receiving EEPR funding

Selected by Alberta and Federal Canadian funding

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

What we have achieved

Reached CO2 CO2 capture rate purity
We Energies Pleasant Prairie USA - Coal - Chilled Ammonia AEP Mountaineer USA - Coal - Chilled Ammonia Dow Chemical Co. Charleston USA - Coal Advanced Amines Vattenfall Schwarze Pumpe Germany - Lignite & Bit. Coal - Oxy

Load [%] on net efficiency

90%

>99%
25 First commercial units will be at or below 2 %

90%

>99.9%
20

90%

>99.5%

15

Realistic limit
10

90%

>99.7%

**
Pilot phase Demo phase Commercial phase

Pilot operation confirm CO2 capture works and performances are improving
*Theoretical limit assumes ideal separation and compression processes (110bar): isentropic, no losses
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

CCS roadmap: time-to market

Commitment taken in 2005 to be ready before 2015

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Barriers and Challenges

Technical
Technical performance proven Energy penalty decreasing with learning curve additional demonstration needed to accelerate the improvement CAPEX consistent with first of kind installations need learning from demos to drive down costs

Storage
Mapping and proving appropriate storage takes time Locations near large sources are most economic

Regulatory
Regulation of ownership, operation and monitoring of storage Policy regulation to encourage CCS (eg, emissions performance standards) Regulation to avoid stranded assets (eg, CCS ready standards)
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Barriers and Challenges - Financing

Demonstrations critical to allow technology to be commercialised

Major challenge - financing large scale demonstrations Capital costs (of CCS plant) need to be shared by governments -Investment required for capture, transport and storage too large to be borne by utilities during the demonstration phase Method must also be found to cover the operating costs of CCS demonstration plants -Carbon pricing may cover some of the shortfall where it exists -Preferential tariffs can ensure that extra costs are covered -Precedent for preferential tariffs in terms of renewable energy

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Commercial scale project (MTN-2) AEP Mountaineer

Thursday as th July, AEP On Host facility same14MTN-1 Product Validation Facility (operational from Sept 2009 to June 2011) announced that, despite capture and the Targeting 235 Mwe size facility to store 1.5Mtpa CO2/year success of phase 1, they have put 2nd phase front end engineering and design the Capture: On goingofcost estimate and project the Mountaineer to support a +/- 25% execution schedule due to inability project on hold by September 30, 2011 to Planning for secure: 2 15 commercial scale operation by the end of Project selected by US DOE to receive CCPI financing the American Recovery and Round 3 funding under

regulatory relief and

clarity on climate/carbon policy.

Reinvestment Act: Total funding of $334m Complete integration with the steam cycle at the host plant. Capture approximately 20% of the CO2 generated by the host facilities.

Commercial plant technology scale up in US will suffer due to lack of effective policy
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Potential Large Scale CCS Projects Opportunity in China-1 -1 Datang Daqing 350MWe+th Project Full size Oxy-fuel combustion CO2 capture Cogeneration of Heat and Power based on Super Critical boiler using lignite Location: Daqing, Heilongjiang province EOR and CO2 storage: adjacent to PetroChinas Daqing oil field for EOR, near to Songliao basin for geological sequestration 35
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Potential Large Scale CCS Projects Opportunity in China-2 -2 Datang Dongying 1000MWe Project Partial flue gas stream slip to Post-combustion CO2 capture Ultra Super Critical boiler using bituminous or subbituminous coal Location: Dongying, Shangdong province EOR: very near to Sinopecs Shengli oil field for EOR 100

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Hardcoal CCS power plant Energy Penalty (EP) & Cost Of Electricity (COE)
EP % MWe net

South East Asia

Oxy SEA

CoE /MWh net

26%
85 75 65 55

South East Asia

Oxy Post Ref PP

24% 22% 20% 18% 16% 14% 2010 2015 2020

Post SEA

60 /MWh (Post)

15%

45 35

2025

2030

2035

2010

2015

2020

2025

2030

2035

Note : 90% capture of CCS PP CO2 emissions, CCS plant and Reference plant at same net

Energy Penalty close to 15 %, COE increase <50%

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Hardcoal CCS power plant Fuel and Capex/Opex contribution in CoE

CoE Ref Plant & Incremental CCS in 20 0
100 90 0 0 0
/ MWh net
73, + % 1,4 + %

T&S Fuel Capex+Opex

59, + 9%

0 0 0 20 10 0

50
POST

39
POST

40
POST

REF

REF

REF

EUR

NAM

SEA

Regional differences in Fuel, Capex/Opex costs

Presentation Title - Presenters Initials - dd mmm yyyy - P 19
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Costs of decarbonised power compared

CoE - Low Carbon technologies Europe in 2011-2016 period
/ MWh
400

300

200

Reference case

100

rm al

W in d

W in d

Source : Alstom analysis 2011

CCS on Coal and Gas are competitive

Presentation Title - Presenters Initials - dd mmm yyyy - P 20
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

PC

Ha rd co al

C G

O ffs ho re

O ns ho r

So la rT he rm

G eo th e

TC C

C C

So la rP V

uc le ar

ro

Hy d

20 1

20 1

al

Conclusions
Decarbonization of Power is a critical part of meeting global CO2 emissions reduction Portfolio approach needed: Renewables, Nuclear, Efficiency and CCS. CCS must be applied to both new and existing power plants, and on both coal and gas: Post and Oxy-combustion meet this goal Alstom has invested significantly in developing CO2 capture technologies and is on the path to go commercial by 2015. 2015 A stable business framework and regulations are needed for CCS to play its role along all other forms of decarbonised energy sources. , Financial support is necessary both for capital costs and through preferential tariff support

Alstom is committed to being a key partner on the CCS value chain

CCS
ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

Presentation Title - Presenters Initials - dd mmm yyyy - P 22

ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.