Realistic Costs of Carbon Capture
There is a growing interest in carbon capture and storage (CCS) as a means of reducing carbon dioxide (CO2) emissions. However there are substantial uncertainties about the costs of CCS. Costs for pre-combustion capture with compression (i.e. excluding costs of transport and storage and any revenue from EOR associated with storage) are examined in this discussion paper for First-of-a-Kind (FOAK) plant and for more mature technologies, or Nth-of-a-Kind plant (NOAK).
For FOAK plant using solid fuels the levelised cost of electricity on a 2008 basis is approximately 10¢/kWh higher with capture than for conventional plants (with a range of 8-12 ¢/kWh). Costs of abatement are found typically to be approximately $150/tCO2 avoided (with a range of $120-180/tCO2 avoided). For NOAK plants the additional cost of electricity with capture is approximately 2-5¢/kWh, with costs of the range of $35-70/tCO2 avoided. Costs of abatement with carbon capture for other fuels and technologies are also estimated for NOAK plants. The costs of abatement are calculated with reference to conventional SCPC plant for both emissions and costs of electricity.
Estimates for both FOAK and NOAK are mainly based on cost data from 2008, which was at the end of a period of sustained escalation in the costs of power generation plant and other large capital projects. There are now indications of costs falling from these levels. This may reduce the costs of abatement and costs presented here may be "peak of the market" estimates.
If general cost levels return, for example, to those prevailing in 2005 to 2006 (by which time significant cost escalation had already occurred from previous levels), then costs of capture and compression for FOAK plants are expected to be $110/tCO2 avoided (with a range of $90-135/tCO2 avoided). For NOAK plants costs are expected to be $25-50/tCO2.
Based on these considerations a likely representative range of costs of abatement from CCS excluding transport and storage costs appears to be $100-150/tCO2 for first-of-a-kind plants and perhaps $30-50/tCO2 for nth-of-a-kind plants.
The estimates for FOAK and NOAK costs appear to be broadly consistent in the light of estimates of the potential for cost reductions with increased experience. Cost reductions are expected from increasing scale, learning on individual components, and technological innovation including improved plant integration. Innovation and integration can both lower costs and increase net output with a given cost base. These factors are expected to reduce abatement costs by approximately 65% by 2030.
The range of estimated costs for NOAK plants is within the range of plausible future carbon prices, implying that mature technology would be competitive with conventional fossil fuel plants at prevailing carbon prices.
Press Release - Belfer Center for Science and International Affairs, Harvard Kennedy School
Journal Article - Ecological Economics
Analysis & Opinions - Bulletin of the Atomic Scientists
In the Spotlight
Book - Cornell University Press
Discussion Paper - Belfer Center for Science and International Affairs, Harvard Kennedy School
Report - Foreign Policy Association