A regional project preparatory technical assistance (R-PPTA) of $800,000 will in part A address essential due diligence requirements, including (i) technical due diligence of the CCUS plant design, including an assessment whether and how the implementation of the CCUS pilot project will impact on the performance of the IGCC power plant; (ii) EIA and environmental audit of oilfield; (iii) storage site assessment; (iv) design of institutional set-up for continuous operation of the pilot project; (v) monitoring and verification of the CO2 sequestration sites; and (vi) economic and financial due diligence. It will also provide capacity building for the implementing agency in ADB Procurement Guidelines (2013, as amended from time to time) and ADB's Safeguard Policy Statement (2009).
Part B of the proposed R-PPTA will capitalize on the unique lessons learned from the due diligence under part A and the pilot project implementation and shall facilitate best practice knowledge sharing and dialogue with policy makers, power generators, regulators, donors and other stakeholders from ADB DMCs through (i) organization of regional knowledge sharing workshops; (ii) development of essential knowledge products, such as development of guidelines for (a) preparing EIAs, and (b) monitoring and verification for CO2 storage sites; and (iii) other knowledge products.
This concept for the support to the Tianjin IGCC CCUS pilot project will complement previous and ongoing efforts of ADB address the need for strengthening the capacity, create awareness and understanding of major actors on key issues concerning CCUS, an essential climate change mitigation technology in the PRC and among focus DMCs of the region. It also allows for an exchange of early movers on CCUS in the Region, especially the PRC and Indonesia, another country which ADB strongly supports in CCUS development. Moreover, it follows so-called Recommendation 5 of the CCUS Action Group under the Clean Energy Ministerial that in particular early mover projects supported by public funding should support and encourage the development of best practice knowledge sharing.
|Project Rationale and Linkage to Country/Regional Strategy
1. The Asian Development Bank (ADB) approved the original project on 8 February 2010 which aims at reducing greenhouse gas (GHG) emissions from coal-fired power plants and was designed to demonstrate climate change mitigation effect of the new integrated gasification combined cycle (IGCC) power plant technology deployed. The original project was planned to support the construction of the 250 megawatt IGCC power plant at Tianjin, and creating adequate operation and maintenance capacity. The IGCC power plant was constructed and is officially in operation since December 2012. It is the first near commercial-scale IGCC plant in the Asia Pacific Region. The Government of the People's Republic of China (PRC) has requested ADB's consideration of additional financing through a grant to finance an additional output establishing a pre-combustion carbon capture and utilization (CCUS) pilot project at the Tianjin power plant
The PRC is one of the world's largest emitter of carbon dioxide (CO2). About 50% of the country's CO2 emissions from fuel combustion come from the power sector. Faced with alarming local air pollution, hazardous climate change risks, serious environmental degradation and the trend that coal will continue to dominate the fuel mix in the power sector at least up to 2035, the only near-commercial solution to attain 80% to 90% cuts in carbon dioxide (CO2) emissions from coal-fired power plants will be to demonstrate and deploy the CCUS technology. However, CCUS has not been demonstrated on commercial scale power plants. Potential widespread deployment of CCUS will require owners and operators of power plants to learn new processes and methods, adopt new safety protocols and engage in new types of business cooperation. Also, all of the currently available capture technologies for separating a concentrated CO2 stream from a large thermal power-generation plant entail a significant increase in both capital as well as operating costs, when compared with technologies without CCUS. To enhance experiences, realize effective cost degressions and develop economic methods of CCUS, it is essential to implement pilot and demonstrate projects of the various available technologies.
A key driver for the IGCC technology is the innate capability of gasification technology to separate and capture CO2 most effectively, compared to other available capture technologies, notably oxy-combustion or post combustion. Coal gasification units could be modified to separate CO2 generated from the syngas before combustion and thus effectively reduce GHG emissions. Therefore, IGCC has been viewed as the most cost-effective platform deploying CCUS technologies for coal-fired power plants.
The proposed CCUS pilot project for additional financing will not only be the first and only pre-combustion CCUS project attached to an IGCC power plant in Asia and the Pacific Region, but will also be the first project where a power generation company will collaborate with an oil company for enhanced oil recovery (EOR). It will also be one of the first to be supported by a multilateral development bank. Therefore, the implementation of the CCUS pilot project at the Tianjin IGCC thereby offers unique learning experiences, which are not only valuable for the PRC, but for all countries from Asia and the Pacific Region with plans to expand their coal-based power generation capacity. It is of strategic importance to develop knowledge products and will therefore become a model on how to optimally structure the support to CCUS pilot and demonstration projects, derive policy recommendations, for example on required environmental standards, and widely disseminate the experiences and knowledge accrued. The implementation of the CCUS pilot project at the Tianjin IGCC thereby offers unique learning experiences, which are not only be valuable for the PRC, but for all countries from Asia and the Pacific Region with plans to expand coal-based power generation capacity.
The proposed focus DMCs includes India, Indonesia, Kazakhstan, Malaysia, Pakistan, Thailand, and Vietnam. These ADB DMCs either have a large, coal-based power generation sector or plans to significantly expand their power generation capacity with coal-fired generation. Representatives from relevant DMCs will be invited to participate in the workshop and will be asked to share their respective country's status on CCUS pilot testing, demonstration, and deployment experiences during the workshop. They will be further asked to support disseminating best practice guidelines in their respective countries.