Realistic Costs of Carbon Capture

COMMENT: The Belfer Center at Harvard has just published a study of carbon capture and storage (CCS). It has determined that the early technology ("first-of-a-kind" or FOAK) implementations will cost in the range of $120-$180 per tonne of CO2 "avoided". On first take, it suggests that a CCS requirement will put the coal business out of business.

Expect plenty of media attention to this discussion paper in coming days. We will add some of them to this post.

CCS, like corn ethanol, and the hydrogen highway, looks like another of those business-as-usual panaceas that government so seems to love - that costs a fortune and doesn't do what it's supposed to do or certainly can't do it in any useful timeframe.

Discussion Paper
July 2009

Authors: Mohammed Al-Juaied, Former Visiting Scholar, Energy Technology Innovation Policy research group, 2008-2009, Adam Whitmore

Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University

ABSTRACT

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.

2009_AlJuaied_Whitmore_Realistic_Costs_of_Carbon_Capture_web.pdf (454K PDF)

For more information about this publication please contact the ETIP Coordinator at 617-495-7961.

For Academic Citation:
Al-Juaied, Mohammed and Adam Whitmore. "Realistic Costs of Carbon Capture." Discussion Paper 2009-08, Energy Technology Innovation Research Group, Belfer Center for Science and International Affairs, Harvard Kennedy School, July 2009

http://belfercenter.ksg.harvard.edu/publication/19185/realistic_costs_of_carbon_capture.html

Carbon capture for coal costly, study finds

To read the study, click here:

Read more in Coal Tattoo

CHARLESTON, W.Va. -- Harvard University researchers have issued a new report that confirms what many experts already feared: Stopping greenhouse gas emissions from coal-fired power plants is going to cost a lot of money.

Electricity costs could double at a first-generation plant that captures and stores carbon dioxide emissions, according to the report from energy researchers at the Harvard Kennedy School's Belfer Center.

Costs would drop as the technology matures, but could still amount to an increase of 22 to 55 percent, according to the report, "Realistic Costs of Carbon Capture," issued this week.

These projections "are higher than many published estimates," but reflect capital project inflation and "greater knowledge of project costs," wrote researchers Mohammed Al-Juaied and Adam Whitmore.

Coal is the nation's largest source of global warming pollution, representing about a third of U.S. greenhouse emissions, equal to the combined output of all cars, trucks, buses, trains and boats.

In the U.S., coal provides half of the nation's electricity. Many experts believe that, because of vast supplies, coal will continue to generate much of the nation's power for many years to come.

Climate scientists, though, recommend that the nation swiftly cut carbon dioxide emissions and ultimately reduce them by at least 80 percent below 2000 levels by mid-century to avoid the worst consequences of climate change.

Industry supporters say the key is for scientists to perfect technology to capture carbon dioxide emissions from coal-fired power plants and pump those gases safely underground. But such technology has never been deployed on a commercial scale. Critics worry about the expense, safety and a host of technical hurdles.

Previous studies have found that carbon capture and storage, or CCS, might cost in the neighborhood of $30 to $50 per ton of carbon dioxide that is captured and stored.

But in a major report last October, the Union of Concerned Scientists warned that such estimates might be overly optimistic. Among other problems, the group said, previous studies did not reflect rising construction, material and labor costs.

The new Harvard study tried to account for such issues. As a result, it projected CCS costs at between $120 and $180 per ton of carbon dioxide captured and stored.

That's for a first-of-its kind, new generation of coal-fired plant that eliminates most carbon dioxide emissions.

The cost translates to an increased cost of electricity of about 10 cents per kilowatt-hour. Nationally, the average electricity cost is about 9 cents per kilowatt-hour, according to the U.S. Department of Energy.

In West Virginia, costs are much lower, an average of 5.3 cents per kilowatt-hour, according to the DOE.

Typically, the state Public Service Commission's Consumer Advocate Division uses the figure of 600 kilowatt-hours per month as an average usage in West Virginia. Using that number, the CCS projections would increase an average power bill by about $60 per month, or $720 per year.

The Harvard study projected that, as technology improves, CCS costs would drop. Later-generation plants would cost between $30 and $50 for every ton of carbon dioxide they capture.

That amounts to between 2 and 5 cents more per kilowatt-hour of power, according to the study. On average, that's between $12 and $30 per month more for electricity.

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.

Clean Coal: Competitive Someday, Just Not Today

The cavalry’s coming–maybe

The good news? Clean coal could become an economically viable alternative source of energy down the road. The bad news? It’s a long road—and the short term isn’t pretty.

“The Realistic Costs of Carbon Capture,” which examined the economics of trapping carbon emissions from coal-fired plants now and in the future, concludes that making coal plants “clean” will be an expensive undertaking until the technology is mature. Actually storing the stuff underground might cost more money, or might be a source of revenue, depending whether it’s used to juice tired oil fields or just stuck in caves.

How much will clean coal cost? The first generation of plants will be able to capture 90% of their carbon emissions at a cost of between $100 and $150 a ton. In layman’s terms, that would add between 8 and 12 cents per kilowatt hour to the cost of coal plants (the national average electricity price is about 9 cents per kilowatt hour).

Once the technology is mature and more efficient plants are up and running, the economics look better: It will cost between $30 and $50 per ton of carbon, or an extra 2 to 5 cents per kilowatt hour. To quote the report: “The range of estimated costs for [future] 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.”

The problem is determining just when clean coal leaves behind its gawky adolescence and enters adulthood. It’s not a question of getting a couple of demonstration plants up and running; rather the world needs to make a huge, concerted push to enjoy economies of scale and the like. Harvard figures that “maturity” means between 50 and 100 gigawatts of clean coal plants in operation. Right now, there are four demonstration plants in the world, not including FutureGen.

One interesting tidbit: Less is not more. That is, “clean coal” doesn’t get any cheaper by capturing fewer of the plant’s emissions (as the reborn FutureGen seeks to do). To wit: “Indeed for the benchmark of a conventional coal plant…costs decrease markedly with increasing capture rates… There do not seem to be any grounds based on unit cost of abatement to prefer lower capture rates” for advanced coal plants.