A Program to Accelerate the Deployment of CO2 Capture and Storage
A Program to Accelerate the Deployment of CO2 Capture and Storage: Rationale, Objectives, and Cost (PDF).This is the lastest publication by the Pew Centre for Global Climate Change and also part of a whole new series on capturing carbon from coal.
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Executive Summary
This White Paper analyzes one strategy for accelerating the deployment of carbon capture and storage (CCS) by the coal-fueled electricity-generation industry. This strategy involves providing reimbursement for the incremental costs of installing and operating CCS systems, with reimbursement provided for:
Retrofitting some existing commercial-scale (500+ MW net capacity, before installation of CCS) coal-1. fueled electric generation plants with CCS and operating these for five years;
Incorporating CCS into some new, commercial-scale (400+ MW net capacity, after installation of CCS) 2. coal-fueled electric generation plants and operating these for five years; and
Launching large-scale (1 to 3 million metric tons per year) demonstrations of geologic storage of carbon 3. dioxide (CO2) primarily in saline formations and operating these for five years, using CO2 from non-utility industrial sources.
The paper sets forth two alternative sets of objectives and outcomes for such a cost reimbursement program, based on program size. The objectives of the Smaller-Scale Program (10 commercial-scale demonstrations of CCS at coal-fueled electric power plants, plus five CCS demonstrations using CO2 from other industrial sources) would be to establish reliable CCS cost and performance data, and to build experience with CCS. The objectives of the Larger-Scale Program (30 commercial-scale demonstrations of CCS at coal-fueled power plants plus 10 demonstrations of CCS using CO2 from other industries sources) would be much more ambitious. Here the objectives are to achieve significant reductions in CO2 capture costs and energy penalties,
build broad public acceptance of CO2 storage, and promote the timely development of CCS regulatory systems, in addition to establishing reliable cost and performance data and experience with CCS.
Given current levels of electricity generation from coal-fired plants of about 2,000 billion kWh per year, and assuming a ten-year program, “first order” cost estimates are:
Smaller-Scale Program• : Total cost of $8.0 to $10.2 billion. This could be funded by ten years of fees of $0.0004 to $0.0005 per kWh on coal-fueled power plants plus $0.50 per metric ton of CO2 emitted from other industrial sources, or by some other means.
Larger-Scale Program• : Total cost of $23.5 to $30.1 billion. This could be funded by ten years of fees of $0.0012 to $0.0015 per kWh on coal-fueled power plants plus $1.00 per metric ton of CO2 emitted from other industrial sources, or also by some other means.
Other options for supporting accelerated deployment of CCS are discussed in the Pew Center Coal Initiative white paper, A Trust Fund Approach to Accelerating Deployment of CCS: Options and Considerations, by Pena and Rubin (2007). Options considered in that paper include use of proceeds from auctions of allow Coal
Initiative—Pew Center on Global Climate Change
2ances under a cap-and-trade program; provision of extra allowances to entities that store CO2 in geologic reservoirs; and use of loans, loan guarantees, or tax credits.
The program cost estimates provided draw-on-data at the time of preparing this report. Estimates of the costs of deploying CO2 capture with coal-fueled power plants and the attendant energy penalties are changing continually.
Increasing labor costs and prices for basic materials result in upward revisions while improvements in capture technologies and system integration lead to lower cost estimates. Until the first commercial-scale CCS plants are built and in operation, all such estimates are “first order” approximations. A major benefit of the envisioned program would be a better understanding of costs, including energy penalties and reliability.
Total program costs, particularly for the Larger-Scale Program, are likely to be lower than those stated above for several reasons. As results of R&D and “learning” become incorporated into second, third, and fourth generation plants, future CO2 capture plants would have lower costs. Second, any per kWh fees used to fund the program would decline over time if electricity generation from coal-fueled plants increases as forecast. If the Larger-Scale Program is undertaken and succeeds in significantly reducing costs, the national economic benefits would be substantial. Assuming wide-scale deployment of CCS occurs in the post-2020 time period, as a result of a mandatory national greenhouse gas-reduction program, implementing the Larger-Scale (30 Plant) Program would reduce the costs of installing CCS by $80 to $100 billion.
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