Although technically feasible, carbon capture and storage (CCS) equipment installed on fossil-based power plants will not be used to capture more than 90% of emissions as the marginal cost of capturing higher levels of CO2 is too high. Rather, economically viable capture rates are expected to be limited to 85–90% unless CO2 prices above $350 /tCO2 are applied.
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High energy penalties for capturing high levels of CO2
Carbon capture and storage (CCS) is considered one means of reducing emissions from the power generation sector that would also allow existing assets to operate to the end of their useful life, and ensure energy security based on low-cost and available fossil fuels. However, CCS applied to power generation has never been demonstrated to mitigate completely the emissions of a power plant. In situations where it has been applied partially, CO2 capture rates have typically been limited to 85–90% (n.b. the definition of capture rate here is the amount of CO2 collected by the CCS plant from the gas stream it is processing).
Proponents of CCS are keen to stress that capture rates of 99% or higher are possible, which we believe is technically correct, but, typically, no reference is made to the costs of doing so. In this Insight, we explore the energy penalty of higher capture rates and set out why we believe they are unlikely to be applied in practice.
There are multiple published references that have studied the energy requirements to achieve higher capture rates from waste-, coal- and gas-fired power generation and the results of a few are set out below.
In each case, the increase in energy consumed by the boiler at higher capture rates appears limited and, in several of the articles, reference is made to only ‘small increases in energy consumption at higher capture rates’ and that, by extension, higher capture rates are eminently viable. However, this interpretation fails to consider the marginal energy requirements to capture additional CO2.
Below, we construct marginal energy demand curves from the data above, which starts to show a different story.
We can see that the marginal energy consumed by the capture equipment can be between ~5–14x higher to capture the final ~1% of CO2 than to capture the initial 90%. This has implications on the cost of captured CO2 and, indeed, the cost of power produced by a generating plant with such high capture levels. These impacts are set out below.
Even low capture rates increase power costs significantly
To model the costs of CCS on both a coal-fired and gas-fired power plant, the following assumptions are used, taken from CRU’s Power Transition Service that forecasts the global power mix and power costs out to 2050.
In the above assumptions, the unit capex cost of the CCS equipment is different depending on whether it is installed on a coal-fired power plant or a gas-fired power plant (i.e. Combined Cycle Gas Turbine (CCGT)). This difference relates to the concentration of CO2 in the off gas, which is much lower in the case of a CCGT due to the large excess of combustion air that is typical for this technology, which requires larger and more costly equipment to process the off gas.
Applying the above assumptions – and assuming no carbon price applies – the below charts show the total cost of power and the marginal cost of captured CO2 at different capture rates.
Under these assumptions, the cost of power already rises significantly when CCS is installed and a capture rate of at least 80–85% is adopted, which has proven typical under steady-state operations for known projects. However, costs continue to rise further at capture rates above 85%, particularly for the coal plant that is much more CO2-intensive. The right-hand chart demonstrates why this is the case. Here, the marginal capture cost of CO2 rises rapidly at capture rates above 90%, driven by the underlying energy demand of the capture process.
Thus, while a CO2 price above ~$150 /tCO2 might incentivise the use of CCS at capture rates of ~85%, there is little incentive for an operator to lift capture rates above this as the cost of capturing the added CO2 would be higher than the benefit received. A capture rate of 99% would need a carbon price above $350 /tCO2 to be economically viable, which would make CO2 capture at that level one of the most expensive abatement options available. Alternatively, high capture rates might be mandated and the cost simply absorbed.
It should be noted that these costs assume pipeline and injection costs of $20/tCO2 (see table). At higher pipeline and injection costs (i.e. if the storage location is distant or subsea), overall costs will be higher. We understand the costs of the Northern lights CCS storage service in Norway, in its current configuration, are much higher than this. With pipeline and injection costs of $100 /tCO2, coal power costs would be lifted by a further $80–115 /MWh from those shown, depending on capture rate. The marginal cost of CO2 would also be much higher than that shown.
The energy penalty of marginal captured CO2 is high
The main driver of the high marginal cost at high capture rates is the fact that energy use increases significantly for each additional tonne of CO2 captured. Importantly, this energy is provided by the power plant itself and so, as energy demand from the CCS equipment rises, energy available for power generation falls and so the output and, therefore, electricity efficiency of the power plant also falls. You can see the impact of this in the following charts.
The left-hand side chart shows the efficiency of the modelled power plants falling as more of the energy input is delivered to the CCS equipment at increasingly higher capture rates, rather than used for power generation. The right-hand side chart shows the power output of each plant at ever higher capture rates, which is falling. Obviously, if CCS equipment is installed, the effective capacity of a power plant is reduced and so additional power will need to be generated or purchased elsewhere to replace this lost output.
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