Figure 3 - uploaded by Samuela Bassi
Content may be subject to copyright.
Source publication
This policy brief identifies the key factors that currently hold back CCS investment in the European
Union and explores ways that CCS can be made viable. A simple cash flow model is used to test
various cost sensitivities on the only operating CCS power plant (Boundary Dam, in Canada),
providing insights on the levels of investment required for CCS...
Context in source publication
Context 1
... this case the estimated capital cost would be €82 billion for 2030 and €740 billion for 2050 (in 2013 terms). The latter could also be seen as the upper bound cost of retrofitting the whole 100 GW of old coal power stations in the European Union, i.e. the plants that are more than 35 years old in Figure 3 (section 2.2). It is important to stress, however, that this is likely to be a significant overestimate as the Boundary Dam's figures are based on the retrofit of a 35-year-old and relatively small plant (which is likely more expensive, per kW of capacity, than larger CCS plants, due to economies of scale) and because it is a first of a kind project with large potential for cost reductions. ...
Similar publications
A suitable model of coordinated control system (CCS) with high accuracy and simple structure is essential for the design of advanced controllers which can improve the efficiency of the ultra-super-critical (USC) power plant. Therefore, with the demand of plant performance improvement, an improved T-S fuzzy model identification approach is proposed...
In the IPCC Intergovernmental Panel on Climate Change Special Report on Emission Scenarios (SRES), it was projected that the number of CO 2 emission sources from the electric power and industrial sectors will increase significantly until 2050. Because fossil fuel-fired power plants are responsible for around one-third of total global CO 2 emissions...
In the process of energy transformation in China, the potential competitiveness of natural gas power plants and coal-fired power plants equipped with carbon capture and storage (CCS) technology should be considered. In this study, the levelized cost of electricity (LCOE) method is used to compare the competitiveness of these two types of power plan...
Citations
... Also noted is a "lottery approach to grant funding" for small organisations, charities, or Councils needing support for CHP purchase (Sinclair et al., 2015a), though Polzin et al. (2015) are of the view that feed-in tariffs (FIT) provide a better long-term signal than grants. Bassi et al. (2015) suggest that the risk perception of biomass is 'medium'. We interpret the essential nature of subsidies (whether by FIT or grant) as that the risk may occur but could halt a project entirely. ...
... In addition, public financial institutions can provide finance at low cost. 25 These could be among the most effective contributions to the sustainable transformation of the electricity system, because the future should not be discounted too strongly when aiming for ' development that meets the needs of the present without compromising the ability of future generations to meet their own needs'. 26 Downloaded from https://academic.oup.com/book/55104/chapter/423912489 by guest on 15 December 2023 by determining the application requirements that allow to optimize revenues through the provision of multiple services with the same device: ...
Economic assessment of energy storage must be based on the lifetime cost of energy or power delivered, factoring in all parameters for technology cost, performance, and the service it provides. This chapter develops a comprehensive lifetime cost methodology for electricity storage technologies and projects future levelized costs using insights from the experience curve analyses in Chapter 4. It shows how to account for parameter uncertainty and considers various sensitivities around discount rate, electricity purchase price, and technology performance. It brings these elements together to chart the ‘competitive landscape’ for energy storage, a visual representation of which technologies will be able to provide different services at lowest cost, now and in the future. A worked example tied to www.EnergyStorage.ninja allows readers to explore the impact of custom cost, performance, and application parameters on the lifetime cost of the respective technology.
... CCS is expected to play a critical role in the European Union in meeting emissions reduction goals at the lowest possible cost [4]. CCS includes three steps: capture, transport and storage of CO2 from electricity production, industries, or other sources [5]. ...
... Large-scale transportation of captured carbon dioxide in order to be stored on-shore or off-shore can be achieved through pressurized pipelines or ships [4]. The best choice is defined by the quantity of CO2 to be transported, the distance between the CO2 source and the storage site and also the regulatory framework. ...
... So far, European funding has mostly concentrated on capital grants for the construction of CCS infrastructures. However, support is required during the project's operational phase to be financially successful [4]. ...
The installation and operation of infrastructures for carbon capture, transport and storage of CO 2 to reduce CO 2 emissions from power plants and carbon-intensive industries, is of major importance to fulfil the targets for the mitigation of greenhouse gas emissions. The industrial sector is considered a major contributor to CO 2 emissions. Carbon dioxide Capture and geological Storage (CCS) is currently the only technology considered to be able to directly decarbonise industrial facilities such as cement, petrochemical, and steel industries, without requiring a complete rethinking of the industrial sectors. Although CCS technologies contribute to climate change mitigation, the number of CCS installations constructed in Europe is weaker than expected, among others, due to several aspects of the CCS legal framework implementation and legal gaps. For this purpose, the MOF4AIR European project performed an overall assessment of the legislative and regulatory framework in the EU on the capture, transport and storage systems of CO 2 . This paper presents the results of the assessment; an analysis of the legislative and regulatory conditions in MOF4AIR participating countries; a comparison between the examined countries on the legislative framework and a set of recommendations for the improvement of the legal framework.
... While the technological maturity of CO 2 capture options has improved considerably over the past decade, costs have barely fallen due to limited learning in commercial settings and increased resource and energy costs [54]. The perceived risk of long-term CO 2 storage is a further barrier to deployment [55]. ...
Fifteen years ago, Pacala and Socolow argued that global carbon emissions could be stabilised by mid-century using a portfolio of existing mitigation strategies. We assess historic progress for each of their proposed mitigation strategies and convert this into the unit of ‘wedges’. We show that the world is on track to achieve 1.5 ± 0.9 wedges relative to seven required to stabilise emissions, or 14 required to achieve net-zero emissions by mid-century. Substantial progress has been made in some domains that are not widely recognised (improving vehicle efficiency and declining vehicle use); yet this is tempered by negligible or even negative progress in many others (particularly tropical tree cover loss in Asia and Africa). By representing global decarbonisation efforts using the conceptually simple unit of wedges, this study helps a broader audience to understand progress to date and engage with the need for much greater effort over the coming decades.
... It is possible to reduce this figure by up to 68% with the inclusion of CCS [9]. However, CCS deployment has so far been disappointing due to high associated weighted average cost of capital (WACC) rates, the lack of a significant carbon price and a lack of policy support [10]. Therefore, the deployment of CCS to decarbonise the SMR process cannot be relied upon. ...
Heat and transport are much harder to decarbonise than the electricity sector with little progress made in the past decade. Hydrogen can offer the energy system a low-carbon fuel that has direct exchangeability with natural gas, a higher specific energy density and more flexibility than electrification. However, this 'sustainable' fuel of the future is currently produced using a high-carbon process. This study proposes a more sustainable alternative. A techno-economic model of an offshore wind farm, offshore water electrolysers (both alkaline and proton exchange membrane) and salt-cavern storage is built. The model output is the Levelized Cost of Gas (LCOG), or the lifetime costs portioned across the lifetime hydrogen production. The LCOG has been calculated using deterministic and stochastic approaches. The deterministic model is based on discounted cashflow analysis whereas the stochastic model uses Monte Carlo analysis to calculate the expected LCOG by varying input parameters. Three scenarios were modelled, and alkaline electrolysis cost the least at 8.38 EUR/kgH2. This is at minimum four times the cost of the most common conventional hydrogen generation method and twelve times that of natural gas. States are in a unique position to make renewable hydrogen more competitive by reducing the uncertainty around private investment with a supportive policy environment. Reducing the risk of investment alone could see the LCOG of alkaline electrolysis fall to 5.32 EUR/kgH2, near competitive with conventional generation methods.
... Typically, high technology costs are cited as the main reason for public sector reluctance 10 . This fails to recognize that first-of-a-kind projects will be particularly costly owing to the commercial risk associated with new business models, and the cross-chain risks associated with the deployment and operation of the CO 2 transport and storage infrastructure 11,12 . Technology learning and cost reduction is primarily achieved via deployment 13,14 . ...
The delayed deployment of low-carbon energy technologies is impeding energy system decarbonization. The continuing debate about the cost-competitiveness of low-carbon technologies has led to a strategy of waiting for a ‘unicorn technology’ to appear. Here, we show that myopic strategies that rely on the eventual manifestation of a unicorn technology result in either an oversized and underutilized power system when decarbonization objectives are achieved, or one that is far from being decarbonized, even if the unicorn technology becomes available. Under perfect foresight, disruptive technology innovation can reduce total system cost by 13%. However, a strategy of waiting for a unicorn technology that never appears could result in 61% higher cumulative total system cost by mid-century compared to deploying currently available low-carbon technologies early on.
... 5 The costs of electricity generation from CCS power plants in the UK expressed as Levelised Cost of Electricity (LCOE) are estimated between d70-150/MWh § depending on technology type, fuel used and region. [48][49][50][51] The estimated LCOE of the only existing large-scale project (Boundary Dam in Saskatchewan, Canada) is calculated to range between d105-177/MWh depending on the cost of capital. 50 The costs of CO 2 avoided are in the range of d20-70 per t CO 2 52,53 for CCS power plants. ...
... [48][49][50][51] The estimated LCOE of the only existing large-scale project (Boundary Dam in Saskatchewan, Canada) is calculated to range between d105-177/MWh depending on the cost of capital. 50 The costs of CO 2 avoided are in the range of d20-70 per t CO 2 52,53 for CCS power plants. Up front capital costs of a CCS power plant are estimated to be between 40-80% greater than those of an unabated plant. ...
Ambitions to produce electricity at low, zero, or negative carbon emissions are shifting the priorities and appreciation for new types of power generating technologies. Maintaining the balance between security of energy supply, carbon reduction, and electricity system cost during the transition of the electricity system is challenging. Few technology valuation tools consider the presence and interdependency of these three aspects, and nor do they appreciate the difference between firm and intermittent power generation. In this contribution, we present the results of a thought experiment and mathematical model wherein we conduct a systems analyses on the effects of gas-fired power plants equipped with Carbon Capture and Storage (CCS) technology in comparison with onshore wind power plants as main decarbonisation technologies. We find that while wind capacity integration is in its early stages of deployment an economic decarbonisation strategy, it ultimately results in an infrastructurally inefficient system with a required ratio of installed capacity to peak demand of nearly 2.. Due to the intermittent nature of wind power generation, its deployment requires a significant amount of reserve capacity in the form of firm capacity. While the integration of CCS-equipped capacity increases total system cost significantly, this strategy is able to achieve truly low-carbon power generation at 0.04 tCO2/MWh. Via a simple example, this work elucidates how the changing system requirements necessitate a paradigm shift in the value perception of power generation technologies.
... A technical project lifetime of 50 yr (including construction) was assumed. For project financing, a debt-to-equity ratio of 70/30 was assumed, with debt assumed to be available at 5% and equity valued at 8%, yielding a weighted average cost of capital (WACC) of approximately 6%, this is in line with other estimates [34]. Future cash flows were discounted at a rate of 5%. ...
Current ambitions to limit climate change to no more than 1.5 °C-2 °C by the end of the 21st century rely heavily on the availability of negative emissions technologies (NETs) - bioenergy with CO2 capture and storage (BECCS) and direct air capture in particular. In this context, these NETs are providing a specific service by removing CO2 from the atmosphere, and therefore investors would expect an appropriate risk-adjusted rate of return, varying as a function of the quantity of public money involved. Uniquely, BECCS facilities have the possibility to generate both low carbon power and remove CO2 from the atmosphere, but in an energy system characterised by high penetration of intermittent renewable energy such as wind and solar power plants, the dispatch load factor of such BECCS facilities may be small relative to their capacity. This has the potential to significantly under utilise these assets for their primary purpose of removing CO2 from the atmosphere. In this study, we present a techno-economic environmental evaluation of BECCS plants with a range of operating efficiencies, considering their full- and part-load operation relative to a national-scale annual CO2 removal target. We find that in all cases, a lower capital cost, lower efficiency BECCS plant is superior to a higher cost, higher efficiency facility from both environmental and economic perspectives. We show that it may be preferable to operate the BECCS facility in base-load fashion, constantly removing CO2 from the atmosphere and dispatching electricity on an as-needed basis. We show that the use of this 'spare capacity' to produce hydrogen for, e.g. injection to a natural gas system for the provision of low carbon heating can add to the overall environmental and economic benefit of such a system. The only point where this hypothesis appears to break down is where the CO2 emissions associated with the biomass supply chain are sufficiently large so as to eliminate the service of CO2 removal.
... 5 The costs of electricity generation from CCS power plants in the UK expressed as Levelised Cost of Electricity (LCOE) are estimated between d70-150/MWh § depending on technology type, fuel used and region. [48][49][50][51] The estimated LCOE of the only existing large-scale project (Boundary Dam in Saskatchewan, Canada) is calculated to range between d105-177/MWh depending on the cost of capital. 50 The costs of CO 2 avoided are in the range of d20-70 per t CO 2 52,53 for CCS power plants. ...
... [48][49][50][51] The estimated LCOE of the only existing large-scale project (Boundary Dam in Saskatchewan, Canada) is calculated to range between d105-177/MWh depending on the cost of capital. 50 The costs of CO 2 avoided are in the range of d20-70 per t CO 2 52,53 for CCS power plants. Up front capital costs of a CCS power plant are estimated to be between 40-80% greater than those of an unabated plant. ...
Many studies have quantified the cost of Carbon Capture and Storage (CCS) power plants, but relatively few discuss or appreciate the unique value this technology provides to the electricity system. CCS is routinely identified as a key factor in least-cost transitions to a low-carbon electricity system in 2050, one with significant value by providing dispatchable and low-carbon electricity. This paper investigates production, demand and stability characteristics of the current and future electricity system. We analyse the Carbon Intensity (CI) of electricity systems composed of unabated thermal (coal and gas), abated (CCS), and wind power plants for different levels of wind availability with a view to quantifying the value to the system of different generation mixes. As a thought experiment we consider the supply side of a UK-sized electricity system and compare the effect of combining wind and CCS capacity with unabated thermal power plants. The resulting capacity mix, system cost and CI are used to highlight the importance of differentiating between intermittent and firm low-carbon power generators. We observe that, in the absence of energy storage or demand side management, the deployment of intermittent renewable capacity cannot significantly displace unabated thermal power, and consequently can achieve only moderate reductions in overall CI. A system deploying sufficient wind capacity to meet peak demand can reduce CI from 0.78 tCO2/MWh, a level according to unabated fossil power generation, to 0.38 tCO2/MWh. The deployment of CCS power plants displaces unabated thermal plants, and whilst it is more costly than unabated thermal plus wind, this system can achieve an overall CI of 0.1 tCO2/MWh. The need to evaluate CCS using a systemic perspective in order to appreciate its unique value is a core conclusion of this study.
... This project is a seminal example of a retrofit on to an existing coal/lignite combustion plant. Boundary Dam boiler unit BD3 of five was repowered during a 42-month programme (including winter downtime), by renewing the 130MW steam boiler, and at the same time installing amine CCS from Cansolv at a cost of $Can600m (Bassi et al., 2015). The 1 Mt/yrCO 2 is sold by pipeline to nearby enhanced oil recovery at 30km distance and sulphuric acid and fly ash are also sold. ...
... The project received $Can240m of Federal support (about 20 per cent of capital cost), with no subsidy for operational costs. If borrowing rates were 5.9 per cent (internal borrowing), then the electricity price would be €142/MWhr (£104/MWhr) (Boyd, in Bassi et al., 2015). Note that many reports of Boundary Dam costs are inaccurate, because they combine the cost of boiler replacement and CCS fitting, whereas the CCS component was only half the total capex spend. ...
Carbon capture and storage (CCS) does not generate energy. CCS applied to fossil and modern bio-carbon fuels and feedstocks
removes environmentally damaging CO2 emissions. CoP21 stipulated a maximum 2°C–1.5°C global warming from 2050 in perpetuity. Both CCS and negative emission technology
(NET) are now required to manage the carbon stock in earth’s atmosphere and oceans. All components of CCS are operationally
proven secure at the industrial scale. Fifteen CCS projects operate globally; seven are under construction. CCS systems increase
electricity prices, to about £100/MWhr. CCS on industry is cheaper and storage costs minimal (£5–20/tonne). CCS reduces whole
economy costs of carbon transition by 2.5 times. Policies of capex subsidy, oversupplied emissions certificates, weak carbon
pricing, and weak emissions standards have all failed to develop large cost CCS mega-projects. New carbon certificates could
link the extraction of carbon to an obligation to store a percentage of emissions. Certificates connect CCS and NET pathways
to secure carbon storage for the public good.
