CO₂ Capture and Storage

8. How cost-effective are different CO₂ capture and storage options?

The source document for this Digest states:

The Esbjerg Power Station, a CO₂ capture site in Denmark. Source: DONG Energy

The stringency of future requirements for the control of greenhouse gas emissions and the expected costs of CCS systems will determine, to a large extent, the future deployment of CCS technologies relative to other greenhouse gas mitigation options. This section first summarizes the overall cost of CCS for the main options and process applications considered in previous sections. As used in this summary and the report, “costs” refer only to market prices but do not include external costs such as environmental damages and broader societal costs that may be associated with the use of CCS. To date, little has been done to assess and quantify such external costs. Finally CCS is examined in the context of alternative options for global greenhouse gas reductions.

Cost of CSS systems

As noted earlier, there is still relatively little experience with the combination of CO₂ capture, transport and storage in a fully integrated CCS system. And while some CCS components are already deployed in mature markets for certain industrial applications, CCS has still not been used in large-scale power plants (the application with most potential).

The literature reports a fairly wide range of costs for CCS components (see Sections 3–7). The range is due primarily to the variability of site-specific factors, especially the design, operating and financing characteristics of the power plants or industrial facilities in which CCS is used; the type and costs of fuel used; the required distances, terrains and quantities involved in CO₂ transport; and the type and characteristics of the CO₂ storage. In addition, uncertainty still remains about the performance and cost of current and future CCS technology components and integrated systems. The literature reflects a widely-held belief, however, that the cost of building and operating CO₂ capture systems will decline over time as a result of learning-by-doing (from technology deployment) and sustained R&D. Historical evidence also suggests that costs for first-of-a-kind capture plants could exceed current estimates before costs subsequently decline. In most CCS systems, the cost of capture (including compression) is the largest cost component. Costs of electricity and fuel vary considerably from country to country, and these factors also influence the economic viability of CCS options.

Table TS.9 summarizes the costs of CO₂ capture, transport and storage reported in Sections 3 to 7. Monitoring costs are also reflected. In Table TS.10, the component costs are combined to show the total costs of CCS and electricity generation for three power systems with pipeline transport and two geological storage options.

Table TS.9. Cost ranges for the components of a CCS system

Table TS.10. Range of total costs for CO₂ capture, transport and geological storage

CO₂ capture and energy needed

For the plants with geological storage and no EOR credit, the cost of CCS ranges from 0.02–0.05 US$/kWh for PC plants and 0.01–0.03 US$/kWh for NGCC plants (both employing post-combustion capture). For IGCC plants (using pre-combustion capture), the CCS cost ranges from 0.01–0.03 US$/kWh relative to a similar plant without CCS. For all electricity systems, the cost of CCS can be reduced by about 0.01–0.02 US$/kWh when using EOR with CO₂ storage because the EOR revenues partly compensate for the CCS costs. The largest cost reductions are seen for coal-based plants, which capture the largest amounts of CO₂. In a few cases, the low end of the CCS cost range can be negative, indicating that the assumed credit for EOR over the life of the plant is greater than the lowest reported cost of CO₂ capture for that system. This might also apply in a few instances of low-cost capture from industrial processes.

In addition to fossil fuel-based energy conversion processes, CO₂ could also be captured in power plants fueled with biomass, or fossil-fuel plants with biomass co-firing. At present, biomass plants are small in scale (less than 100 MWe). This means that the resulting costs of production with and without CCS are relatively high compared to fossil alternatives. Full CCS costs for biomass could amount to 110 US$/tCO₂ avoided. Applying CCS to biomass-fuelled or co-fired conversion facilities would lead to lower or negative13 CO₂ emissions, which could reduce the costs for this option, depending on the market value of CO₂ emission reductions. Similarly, CO₂ could be captured in biomass-fueled H2 plants. The cost is reported to be 22–25 US$/tCO₂ (80–92 US$/tC) avoided in a plant producing 1 million Nm3 day-1 of H2, and corresponds to an increase in the H2 product costs of about 2.7 US$ GJ-1. Significantly larger biomass plants could potentially benefit from economies of scale, bringing down costs of the CCS systems to levels broadly similar to coal plants. However, to date, there has been little experience with large-scale biomass plants, so their feasibility has not been proven yet, and costs and potential are difficult to estimate.

The cost of CCS has not been studied in the same depth for non-power applications. Because these sources are very diverse in terms of CO₂ concentration and gas stream pressure, the available cost studies show a very broad range. The lowest costs were found for processes that already separate CO₂ as part of the production process, such as hydrogen production (the cost of capture for hydrogen production was reported earlier in Table TS.4). The full CCS cost, including transport and storage, raises the cost of hydrogen production by 0.4 to 4.4 US$ GJ-1 in the case of geological storage, and by -2.0 to 2.8 US$ GJ-1 in the case of EOR, based on the same cost assumptions as for Table TS.10.

Cost of CO₂ avoided

Table TS.10 also shows the ranges of costs for ‘CO₂ avoided’. CCS energy requirements push up the amount of fuel input (and therefore CO₂ emissions) per unit of net power output. As a result, the amount of CO₂ produced per unit of product (a kWh of electricity) is greater for the power plant with CCS than the reference plant, as shown in Figure TS.11. To determine the CO₂ reductions one can attribute to CCS, one needs to compare CO₂ emissions per kWh of the plant with capture to that of a reference plant without capture. The difference is referred to as the ‘avoided emissions’.

Table TS.11. Mitigation cost ranges for different combinations of reference and CCS plants

Introducing CCS to power plants may influence the decision about which type of plant to install and which fuel to use. In some situations therefore, it can be useful to calculate a cost per tonne of CO₂ avoided based on a reference plant different from the CCS plant. Table TS.10 displays the cost and emission factors for the three reference plants and the corresponding CCS plants for the case of geological storage. Table TS.11 summarizes the range of estimated costs for different combinations of CCS plants and the lowest-cost reference plants of potential interest. It shows, for instance, that where a PC plant is planned initially, using CCS in that plant may lead to a higher CO₂ avoidance cost than if an NGCC plant with CCS is selected, provided natural gas is available. Another option with lower avoidance cost could be to build an IGCC plant with capture instead of equipping a PC plant with capture.

Source & ©: IPCC  Carbon Dioxide Capture and Storage: Technical Summary (2005)
8. Costs and economic potential, p. 41