The relevance of ccs as a climate policy instrument in vietnam

1. The 30th USAEE/IAEE North American Conference Washington DC, 12 October 2011 The relevance of ccs as a climate policy instrument in vietnam Presented by: Nhan T. Nguyen * (co-authors: Minh Ha-Duong and Didier Bonijoly) * Centre International de Recherche sur l’Environnement et le Développement (CIRED/EHESS) *Van Xuan Center of Research in Economics, Management, and Environment (VCREME)

2. Contents 1 Introduction 2 Promising storage capacity estimates 3 E IRP simulation: Expansion of coal, next 30 years Potential of CCS at Power Plants in 2040 4 Concluding remarks 5

3. Present situation • 331,212 km2,3200 km coastline • 87 million population, 2009 • 2000-2009:7.3yr-1 GDP growth • Power generation (2000-2009)grew faster

4. Trends • Demand growth: 13.5%-16.6%, next decade • Baseline scenario: coal generation share: 32% (2015) to 68% (2040) Coal Primary fuel supplies for electricity sector Power generation sources by 2015 Hydro Wind, Solar, Geothermal Nuclear Biomass Oil, Gas Source: Institute of Energy (2008), NLDC (2010)

5. Promising geological storage opportunities Specification requirement: • Sediment formations deeper than 1 km • They should be 20 kilometers away from major faults or known oil fields • No more than 100 kilometers away from a CO2 source of > 2.5 MtCO2/yr Most promising fields: • Enhanced Oil Recovery (EOR): Cuu Long river basin • Enhanced Coal Bed Methane Recovery (ECBM): QuangNinh coal basin • Storing CO2 into depleted oil fields: in Cuu Long, Song Hong, and the North end Figure: 5 major basins in Vietnam identified for storage opportunities

6. Utsira reservoir • Largest storage capacity: 20 to 60 Gtof CO2

7. Load curve & load demand Demand-side Data Price elasticity of demand Supply-side & CCS Data CCS constraints IRP Model Fuels constraints Externality cost Carbon values Optimal expansion plan Structure of technologies & Fuels mix Probabilistic estimation of system Total planning Cost Plant Emission Factors Electricity prices (LRAC &AIC) CO2, SO2 and NOx Emissions Integrated Resourceplanning (IRP) • The analytical flowchart of the IRP model Source: Shrestha and Nguyen, 2003

8. Carbon prices scenarios

9. Expansion of coalgeneration, next 30 years • Cumulative coal consumption, 2010-2040 (million tons) • Greaterdependence on large-scalecoalforfutureexpansion, 2010-2040 • Cumulativeelectricitygeneration, 2010-2040: 14,106TWh Source: the IRP simulationresults

10. Baseline without CCS: Emissions from Power Generation • The Electricity and Heat sector would emit 300 MtCO2/yr (2010-2040)  3 tCO2/yr/capita. This level is not sustainable. Source: the IRP simulation results

11. Costs of CCS in the irp simulation for vietnam Integrating CCS into the IRP model • Power generation plants with more than 2.5 Mton of CO2 emissions per year opportunity to be selected for carbon capture and storage deployment Costs of capture based power plants Source: the IRP simulation results

12. IRP results: ccs as a abatement option • No CCS plants selected in Low Carbon Value scenario (LCV) • CCS enters after 2030 at ≥25US$/tCO2: but few • 40-60US$/tCO2: 32% capacity, 20% abatement Source: the IRP simulation results

13. Not cheaper than renewables but CCS+EOR could be cost-effective abatement • renewables (6-10US$/tCO2) cheaper than CCS (≥ 25 US$/tCO2) in IRP model • CCS + enhanced oil recovery (EOR)  net benefits 10-16 US$/tCO2based oil price 2003 (IPCC, 2005) • Proposal at White Tiger Oil Field in Vietnam: CO2 capture from (NGCC) plants, transport pipeline, storage in offshore/onshore fields, enhanced oil recovery

14. Concluding remarks • Vietnam has a promising carbon emissions storage capacity • CCS not cost-effective if carbon price below 25 US$/tCO2 by 2030. But become a key abatement option (20%) if the price increases 40-60 US$/tCO2 from 2030 to 2040 • Without EOR, CCS isnot cheaper than renewables • Need for new policy