Including sub-surface uncertainties in CCS hub investment decision making – a case history
Andrew Garnett A , Iain Rodger A and Joe Lane A *A Centre for Natural Gas, The University of Queensland, Brisbane, Australia.
The APPEA Journal 63 S375-S378 https://doi.org/10.1071/AJ22184
Accepted: 24 February 2023 Published: 11 May 2023
© 2023 The Author(s) (or their employer(s)). Published by CSIRO Publishing on behalf of APPEA. This is an open access article distributed under the Creative Commons Attribution 4.0 International License (CC BY)
Abstract
Large-scale carbon capture and storage (CCS) hub investments require design choices regarding sizing (in Mt-CO2/year) and project build-out phasing. Investments in capture and transport represent the majority of overall project capex, with the ‘size’ of that infrastructure ideally optimised to capture and deliver steady rates over the asset lifetime. However, there is a risk that the sub-surface injection (i.e. storage) rate cannot be sustained at the specified capture rate. The investment risk in sizing major capture and transport equipment therefore lies in the uncertainty surrounding future dynamic performance of the storage site(s). This paper builds on a previous investigation for the Surat Basin, examining the role that sub-surface uncertainties play in this hub- sizing risk. Articulating the value of investment in additional appraisal information, shows that the acquisition of critical, uncertainty-defining data can reduce final investment risk in capture and transport, helping to ‘right size’ the hub build. Screening-stage modelling of technical and economic uncertainty plays a crucial role, characterised with a target unit technical cost (UTC) that represents the life-cycle, constant real-terms, carbon price ($/t) required for storage that would result in a break-even economic development. The presence of pre-development uncertainties in long-term dynamic performance, and the need for appraisal to reduce that uncertainty, effectively increase the required break-even storage price. Alternatively, ignoring that uncertainty could lead to under-performance of the storage resource (inability to sequester at the capture design-rates) and significant over-investment in capture and transport infrastructure, increasing the overall cost of CO2 sequestration.
Keywords: CCUS, decision, dynamic capacity, hub, injection, investment, probability, risk, storage, success, Surat, uncertainty, value of appraisal.
Professor Andrew Garnett is Director of the UQ Centre for Natural Gas, leading a large multidisciplinary research program spanning social and environmental impact, cost and supply optimisation, with a particular focus on the Queensland industry. He has more than 30 years’ international experience within multinational companies across conventional and unconventional hydrocarbon projects. Prior to joining UQ, he led the ZeroGen carbon capture and storage (CCS) project. As Director of the UQ CCS Program, he led a 3-year study identifying strategies to make material emissions cuts in Queensland as well as to enable low carbon baseload power, deliver significant benefits for regional employment and stimulate the hydrogen economy. Prof Garnett makes regular contributions to the policy and planning processes for the global transition to a low emissions economy; including as a reviewer for the International Energy Agency’s ‘World Energy Outlook (Natural Gas)’ and ‘Energy Technology Perspectives’ products. |
Iain Rodger is a Petroleum Engineer currently working for the Centre for Natural Gas at UQ. His work is focused on reservoir simulation; in particular, his research is related to unconventionals and Carbon Capture and Storage projects. Iain graduated from the University of Edinburgh with a BSc (Honours) in Chemistry with Environmental Chemistry, before completing an MSc in Petroleum Engineering at UQ. |
Joe Lane has been working in the research sector for 16 years, focusing on major change in Australia’s water, food and energy systems. He has contributed to the startup of major initiatives on energy transition challenges (global, India, Australia), now with the UQ Centre for Natural Gas. Joe’s earlier career as a Process Engineer was followed by research and policy implementation roles in the Queensland water resources sector. Over the last 5 years, he has worked with experts in CO2 geo-sequestration, to explore the broader challenges posed by the uncertainties involved in the storage development process. He leads the Centre’s investigations into energy transition implications for the electricity sector, and for the role of carbon offsets. |
References
Garnett AJ, Underschultz J, Ashworth P (2019) Scoping study for material carbon abatement via carbon capture and storage. Project Report. The University of Queensland Surat Deep Aquifer Appraisal Project. (The University of Queensland) Available at https://espace.library.uq.edu.au/view/UQ:734606Garnett AJ, Rodger I, Lane JL, Hurter S (2022) Basis of design for CCS Hubs - the importance of uncertainties in dynamic storage capacity. In ‘Proceedings of the 16th Greenhouse Gas Control Technologies Conference (GHGT-16)’, Lyon, France, 23–27 October 2022. Available at http://dx.doi.org/10.2139/ssrn.4286100
Lane J, Greig C, Garnett A (2021) Uncertain storage prospects create a conundrum for carbon capture and storage ambitions. Nature Climate Change 11, 925–936.
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