The economic cost of Carbon Capture and Storage (CCS)

[Hans De Keulenaer]

IPCC figures

Capturing the carbon of fossil fuel power generation plants and storing it underground sounds a great idea for mitigating climate change. It would allow for continued fossil fuel use in the coming decades. But along with several major technical issues that still need to be solved, one must also wonder whether Carbon Capture and Storage (CCS) will ever be economically feasible.

The Oil Drum posted an article on this subject, based on a special report by the Intergovernmental Panel for Climate Change (IPCC). It estimates that for a pulverized coal plant, the additional cost of CCS would amount to 20 to 30 per cent on top of the industrial base price. The consequence would be an increase in the general electricity generation cost of US$ 0.01 to 0.05 per kWh. By using carbon storage for 'Enhanced Oil Recovery' (EOR), this additional electricity production cost would be reduced to US$ 0.01 to 0.02 per kWh.

Political support is indispensable

This leads the Oil Drum to the following conclusion: 'Only with continued political support will this technological mitigation option for climate change become viable. The best option is full support of carbon dioxide capture and storage in the European emissions trading scheme, to make pioneering projects […] viable. For larger application beyond a few projects, the price of a ton of carbon needs to increase, or the costs of capture and storage will need to come down significantly.'

Combining CCS with energy efficiency measures

One reader of the Oil Drum remarks that this extra cost of 20 to 30 per cent is not insurmountable, and suggests compensating for the extra electricity cost by realizing energy savings of 20 to 30 per cent. This would be technically feasible and politically acceptable. However, if CCS is to be combined with far-reaching energy efficiency measures, this would require an even larger amount of initial capital investment from the economy.

References

• Article on the Oil Drum Web site: 'CO2 capture and storage: The economic costs'
• IPCC 'Special Report on Carbon dioxide and Storage'