Economic and policy evaluation of SPCC (solar-assisted post-combustion carbon capture) in Australia

Abstract

This paper evaluates the economic feasibility of SPCC (solar-assisted post-combustion carbon capture) at a coal power plant near Sydney, Townsville and Melbourne for implementation in 2020. A review of Australia's carbon and renewable energy policy is performed first, after which the merits of application of each incentive for SPCC are compared. Incentives such as subsidies, preferential discount rate, carbon tax and RECs (renewable energy certificates) are evaluated. No single incentive on its own, and within reasonable limits, is able to provide a favourable economic performance for power plant based renewable powered CCS (carbon capture and storage). However, once the compounded effect of carbon tax and electricity price increase is taken into account, a carbon price as low as A$ 25/tonne-CO2 and a REC price as low as A$ 35/MWhe is able to produce a positive net benefit in Townsville, while a slightly higher carbon price and REC price is required for Sydney. Melbourne performs poorest amongst the three locations, where substantially higher incentives would be needed for economic feasibility. The level of incentives required for SPCC to become feasible are found to fall in the range of current Australian policy incentives accessible to renewable energy technologies for stand-alone power generation.