Essent and Shell take first step toward low-CO2 power plant

Arnhem/The Hague, 8 December 2008, Essent Business Development B.V. (Essent) and Shell Gas & Power Developments B.V. (Shell) today agreed to study the feasibility of a 1,000-megawatt, low-CO2 power plant.

Most of the CO2 produced by the plant would be captured and stored underground. Essent and Shell today signed a Memorandum of Understanding for the feasibility study.

Shell and Essent will evaluate the feasibility of combining a high-efficiency gasifier, a power generation plant and equipment to capture and store CO2. Coal and solid biomass would be gasified to produce synthesis gas which in turn is used to make hydrogen. The hydrogen would then be used to generate electricity in turbines. Gasification technology makes it simpler and cheaper to capture CO2 than conventional coal and biomass firing.

The study will assess which depleted oil and gas fields would be suitable for CO2 storage. Because of the volume of CO2 involved, the study will consider both onshore and offshore fields.

The companies are evaluating possible sites for the plant in the south-west part of the Netherlands.

This joint initiative will make an important contribution to ensuring a secure supply of affordable energy for the future, as well as helping to meet government emissions targets. Gasification offers a cleaner way to use fossil fuels, providing an important complement to renewable energy such as wind, which provides only intermittent power. Besides electricity generation, the gas produced in the installation can be added to the natural gas network. This enhances the flexibility of the Dutch energy infrastructure, which is required to further integrate sustainable energy. The Dutch Energy Council, a government advisory body, also believes the flexibility provided by multiple types of power generation will be essential for integrating sustainable energy into the electricity infrastructure of the Netherlands.

Moreover, storing CO2 and gasifying solid biomass contribute significantly to sustainability and climate objectives. The production of solid biomass has no harmful effect on the climate or food chain. Essent is currently using biomass as a fuel in various power plants.

The project supports the European Union’s plan to reduce CO2 emissions and is in line with the vision of the Rotterdam Climate Initiative. There is great urgency: in order to achieve their CO2 emission reduction targets by 2020, European governments must soon take decisions that both enable and encourage capital investments by businesses. The EU aims to demonstrate that CO2 capture and storage is feasible with 10 to 12 large-scale demonstration projects starting between 2015 and 2020.

Dutch and European government support, financial and regulatory, will be indispensable for realising pioneering projects like the one announced today. For large-scale CO2 capture and storage, CO2 transport infrastructure and suitable storage locations are essential. Governments must create the regulatory framework that will encourage their development.This project forms part of the further modernisation of the energy production park of the Netherlands.

Michiel Boersma, Chairman of Essent’s Executive Board, said: “This project forms part of the further modernisation of the energy production park of the Netherlands. We always focus on the trinity of assured supplies, affordability and sustainability. This means our customers can count on the 100% availability of affordable electricity, generated as sustainably as possible. That’s why Essent is investing in wind energy, in the use of sustainable biomass and in solutions like this one, where a sharp reduction of CO2 emissions is to be achieved. We’re not only responsible for today’s energy but also, and above all, for tomorrow’s.”

Peter de Wit, Executive Vice President for Clean Coal Energy at Shell and also Shell’s Country Chairman in the Netherlands said: “Our world’s leading gasification technology has been developed in the Netherlands. It is a tried and tested process for converting various energy resources, including coal, into electricity in the cleanest possible way. We’re taking seriously our responsibility for helping to attain the European CO2 emission reduction target, and we’re making an important contribution towards the security of West European energy supplies.”

Shell and Essent are convinced that innovation, integration and investments made in partnership are key factors for resolving the world’s energy challenge: meeting the growing demand for energy while coping with energy-related CO2 emissions.

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