This document discusses lessons learned from early carbon capture and storage (CCS) demonstration projects. It focuses on the key factors considered important for a successful business case, including regulated returns, viable storage solutions, large credible suppliers, long-term contracts, tax incentives, project clustering, and premium power prices. The document also examines funding requirements and proposed funding allocation for the Don Valley CCS project in the UK, which would require around £5 billion and utilize various grants, equity, debt from multilateral institutions, export credit agencies, and commercial lenders. Operating costs and revenue profiles are presented to illustrate the financial modeling for the Don Valley project.

1. making the business
case for ccs
Lessons Learnt from Early CCS/CCUS demonstration
and Deployment
GCCSI EMEA Members’ Meeting
Edinburgh, May 2013
Jane Paxman, Director Policy and Communications

2. the reverse effect
What was considered important to the business case?
0 1 2 3 4 5 6
Regulated returns
Viable storage solutions
Large, credible suppliers
Long term supply, offtake…
Tax incentives
Project clustering
Premium power price
Government-backed lending
CO2 emission price
EOR revenue
Capital grant
2

3. the reverse effect
DVPP business plan:
EOR would enable zero cost storage
3
Power Plant
Capture StorageTransport
2Co’s storage costs do not pass back to the plant, as
they will be covered by EOR
Costs from transport

4. the reverse effect
Don Valley CCS project funding requirement:
significant funding challenge
Approximately £5bn capex required
across the Don Valley CCS project value chain
4
Estimated total project costs
(excluding financing fees)
Estimated power plant cost
breakdown
Component Share (%) Component Share (%)
Power plant 68% CCS 59%
Transport (2Co share) 0% Non-CCS 26%
Storage 26% Other 7%
Sub-total 94% Sub-total 91%
Financing costs* 6% Financing costs* 9%
Total 100% Total 100%
* Financing costs comprise fees and interest accrued during construction

5. the reverse effect
DVPP funding requirement:
proposed funding allocation
5
Potential sources of funding
for DVPP
Potential sources of debt
funding
Share (%) Share (%)
Grants 26% MFI 24%
Equity 14% ECA 58%
Debt 60% Commercial 18%
Total 100% Total 100%

6. the reverse effect
DVPP business plan:
operating cost split (steady-state)
6
CO2 tax = EU ETS allowance purchases

7. the reverse effect
DVPP business plan:
revenue profile
7

8. the reverse effect