Challenges, and Solutions A Presentation on the Study Results by the - PowerPoint PPT Presentation

An Action Plan for Carbon Capture and Storage in California: Opportunities, Challenges, and Solutions A Presentation on the Study Results by the Project Executives Professor Sally Benson, Stanford University Melanie Kenderdine, Energy Futures Initiative October 22, 2020 1

Significant Challenges for Utility Scale Battery Storage Study Approach and Framing Analysis focused on five key areas • Meeting California’s Decarbonization Targets: The Critical Role of CCS in Carbon Dioxide Removal • The Status of CCS in California • The CCS Opportunity in California • The Challenges for CCS Project Development in California • A Policy Action Plan for Maximizing the Value of CCS in California Bottom line up front An Action Plan for Policymakers was developed to fulfill California’s CCS potential, supporting the report’s high -level goals of: ✓ M aximizing the value of CCS for meeting the state’s economywide decarbonization goals affordably and equitably ✓ Motivating the private sector to decarbonize ✓ Enabling economic and reliability benefits from existing industries and power generation, and -- ✓ Unlocking new clean energy industries and jobs 2

What CCS Can Do for California: Emissions Reductions Imports In-state Generation Emissions Reduction 5.8% 9.1% Potential from CCS in Residential California Other 1.8% 6.1% Cement 1.8% Commercial • Approx. 15% of state’s total Thermal Cogen. 1.8% Electricity 3.6% CO 2 emissions can be 14.9% Buildings Oil & Gas Livestock captured and stored with CCS 9.7% 4.1% 5.3% • This is 65% greater than General Fuel Use Industry* Agriculture Other emissions from in-state 4.5% 21% 7.6% Total 2017 2.3% power generation in 2017 Emissions: High GWP • 44% greater than emissions Refineries 4.9% 424 MtCO 2 e from the entire buildings 7% Waste sector 2.1% • 84% greater than all Aviation 1.1% Other Other emissions from the Rail 0.4% 3.6% 3.6% Transportation* Ships 0.8% agriculture sector 40% Other 1.3% • 66% greater than emissions Heavy Duty Vehicles Heavy Duty Vehicles from all heavy-duty vehicles 8.4% Passenger Vehicles 3 28.0% Source: Adapted from CARB,2020

What CCS Can Do For California: Meet Climate Targets While Supporting Economic Base/Jobs Maximize options for meeting 2045 Goal: Carbon 2030 Goal: 40% 2020 Goal: Equal 2030 and 2045 GHG targets to reduce Neutrality and Reduction from 1990 to 1990 Emissions Net-negative Emissions Emissions Level, 256.2 associated costs, improve the Level of 427 Thereafter MtCO 2 e likelihood of achieving the targets, and MtCO 2 e foster innovation. “ California’s manufacturing accounted for roughly $315 billion in economic Motivate the private sector to deeply output in 2018 -- 11 percent of gross decarbonize its operations. state product-- with more than 35,000 firms employing 1.3 million California employees... The use of CCS could Cement & Cement enable difficult-to-decarbonize Related industries to stay in business and # Employees 1,449 16,774 continue making large contributions Payroll ($) 101 million 924 million to California‘s economy while California dramatically reducing their GHG Contribution 35.6 million 412 million to State Taxes emissions.” - National Association of ✓ Industry 21% of total emissions Revenues ($) Manufacturers, “2019 California Manufacturing ✓ Largest manufacturing state in the Facts.” 2.4 billion 12.1 billion Economic country Contribution ($) ✓ Few technology options for 4 decarbonization Source: Adapted from PortlandCement Association, 2017

What CCS Can Do For California: Support for Grid Significant Challenges for Utility Scale Battery Storage Reliability, Variable Renewable and Climate Targets Enable continued reliability benefits from clean firm power generation ... 1 8 2 3 4 5 6 7 9 10 111213 14 15 16 17 18 19 2021 22 2324 25 26 27 28 2930 31 32 333435 363738 39 40 41 42 44 45 464748 49 50 51 43 53 54 52 55 56 60 61 57 58 59 62 63 64 6566 67 68 69 70 71 72 73 74 81 82 8485 86878889 90 76 77 78 79 80 83 75 Source: Energy Futures Initiative, Hourly trends in solar and wind capacity factors in CA for 2017 aligned to normalized variation in hourly load 5 2019. Compiled using data from relative to peak daily load CAISO, 2017

What CCS Can Do for California: Enable Affordable Clean Firm Power and Renewable ...and enable continued reliability benefits from clean firm power generation at lower cost System capacity in 2018 and 2030 140 for a scenario with and without NGCC- Approx. $750 M/yr 120 CCS. The scenario with CCS shows Cost Savings 37 approx. 4 GW of CCS in the system, and 100 27 overall lower capacity needs than a Capacity (GW) system without CCS. The annual 80 2 generation system cost for a scenario 51 17 43 with CCS is approximately $750 60 8 million/year lower as well. 12 40 12 31 Note: Capacities include in-state generation capacity and 4 14 Natural Gas 6 out-of-state generation capacity dedicated to California. 20 *2018 Baseline is California’s generating capacity based on 2018 eGRID database including planned natural gas 0 No CCS and nuclear retirements, as well as planned capacity CCS 2018* additions for PV and wind. Hydro Bio+Gen+Nuc Natural Gas Battery Storage Note : figure updated 10/25/20 to reflect final results 6 CCS Wind PV Source: Energy Futures Initiative and Stanford University, 2020.

What CCS Can Do for California: Enabling New Clean Energy Industries and Jobs ... Unlock new, potentially multi-billion-dollar clean o Half of ports’ drayage Enable Carbon Dioxide energy industries, creating new jobs in the process. fleet (5,000 trucks) Removal/Direct Air Capture Industry o Entire ports’ electricity 100,000 Petroleum kg H 2 /day Refining Retail Gas Similarities with CCS requirement Electrolysis • Material manufacturing • Improved process energy Natural Gas (50MW/h) & scale-up efficiency o 80 % of SCG’s • Novel: catalysts; • Lifecycle analyses H 2 petroleum refiner • Low-carbon capture membranes; solvents; demand requirements/ systems sorbents 2 Steam Methane CO 2 Reformers with CCS • Simulation • Low-carbon heat 1.5 million o 10% of SCG’s • Sensors and controls kg H 2 /day • Geologic storage residential gas demand Combined Cycle Power 3 (as blend) H 2 Storage Plant Onshore Sequestration Translate Oil and Gas Skillsets to CCS Industry Job o CO 2 sequestration Support Development of A Hydrogen equivalent to half an Economy average coal plant emissions “The oil and gas industry…[w]as a major employer and leading economic drive in California responsible for Source: Energy 368,100 jobs in 2015, or 1.6 percent of California’s Futures Initiative and Stanford employment, with almost $66 billion in total value- University, 2020. added, contributing 2.7 percent of California’s state product.” - LA County Economic Development Corporation 7

CCS: An Important Technology for Meeting Global Sustainable Development Targets “Reaching net zero will be virtually impossible without CCUS” IEA, 02/20 40 “Our collective failure Stated Policies Scenario to act early and hard 37% Efficiency on climate change means we now must GtCO2 30 deliver deep cuts to emissions... We need quick wins to reduce 32% Renewables emissions as much as 20 possible in 2020... We 8% Fuel Switching need to catch up on 3% Nuclear the years in which we 9% CCUS procrastinated... If we 12% Other don’t do this, the 10 1.5°C goal will be out Sustainable Development of reach before 2030.” Scenario UNEP Executive Director, 0919 2010 2020 2030 2040 2050 8 Source: Adapted from IEA,2019

Global CCS Projects, 2019 Pilot and demo in operation or under construction Large scale CCS facilities in operation or under construction Pilot & demo scale facility in advanced dev. Large scale CCS facilities in advanced development Pilot & demo scale facility completed 9 Test center Large scale CCS facilities completed Source: Global Status of CCS, 2019, Global CCS Institute

US CO 2 Project, Emissions Sources, Age Shute Creek Gas Processing Plant Great Plains Synfuels 30 mile pipeline Plant Processing Plant WA Operating since 1986 205 mile pipeline ME Gas processing source MT Operating since 200 ND VT Illinois Industrial CCS Lost Cabin Gas Plant Synthetic gas source OR MN NH MA 1 mile pipeline Gas Processing ID SD WI NY CT RI Operating since 2017 12 mile pipeline MI WY Ethanol prod. source Operating since 2013 PA IA NJ NE Hydrogen plant source NV OH DE IN IL UT MD CA WV CO Coffeyville Gasification VA KS MO KY Plant Enid Fertilizer NC 70 mile pipeline 140 mile pipeline TN OK Operating since 2013 AZ Operating since 1982 AR SC NM Fertilizer prod. source Fertilizer prod. source GA MS AL LA TX Terrell Natural Gas Century Plant Processing Plant 27mile pipeline FL 83 mile pipeline Operating since 2010 Operating since 1972 Gas processing source AK Gas processing source Petra Nova Carbon Air Products Steam Source: Energy Futures Capture Plant Methane Reformer Initiative and Stanford 80 mile pipeline 12 mile pipeline University, 2020. Compiled Operating, 2017-2020 Operating since 2013 using data from Global CCS 10 Coal generation source Institute, 2020. Hydrogen prod. source