Perspectives on CCS Cost and Economics

Focus on Carbon Capture and Storage (CCS) has grown over the past decade with recognition of CCS’s potential to make deep CO2 emission reductions and that fossil fuels will continue to be needed to supply much of the world's energy demands for decades to come. How CCS will compare to other options in the future depends critically on the cost of CCS (the focus of this paper) and resolution of barriers to CCS deployment, as well as costs and barriers for other emission reduction options. This paper provides a comparison of the cost of electricity of five power generation options – coal and gas Combined Cycle Gas Turbine (CCGT,) with and without CCS and nuclear – and shows regions of carbon price and fuel prices where each can be economically viable. Current cost estimates for coal CCS for Nth-of-a-kind power generation plant are in the 60-100 $/ton of CO2 avoided – higher than some of the earlier CCS estimates, and higher than the generally accepted range of expected carbon prices in the next two decades. The high cost of coal CCS suggests that:Gas based power generation is much more economical than coal CCS at carbon prices below 60-100 $/ton CO2.Even after carbon prices reach 60-100 $/ton CO2, gas CCS produces lower cost electricity than coal CCS as long as natural gas prices remain below 9 $/MBTU.Nuclear has a lower cost of electricity than coal CCS. Although Coal or Gas CCS is unlikely to be economical in power generation over the next two decades, subsidized demonstrations of CCS are likely to occur. In addition, components of CCS technologies will continue to be economically practiced in early use segments such as natural gas processing and Enhanced Oil Recovery (EOR) operations. In this paper, we share ExxonMobil’s experience at LaBarge in using CO2 from a natural gas facility for EOR use – the single largest CO2 capture site for sub-surface injection in the world today. In the natural gas processing industry, CO2 separation cost is a fraction of the cost of CO2 capture in power generation due to its higher gas pressure, and the CO2 separation is typically necessary to monetize the natural gas resource. In contrast, CCS for most refinery and industrial emissions is expected to be significantly more costly than power generation because the CO2 streams are typically smaller scale and more distributed than those from large power plants. Realistic estimates of cost for CCS, as well as for other greenhouse gas (GHG) mitigation options, are an important input for focusing research, development and demonstration (RD&D) addressing barriers to applications that show the greatest promise, and development of sound policy.

Global decarbonisation scenarios include Carbon Capture and Storage (CCS) as a key technology to reduce carbon dioxide (CO2) emissions from the power and industrial sectors. However, few large scale CCS plants are operating worldwide. This mismatch between expectations and reality is caused by a series of barriers which are preventing this technology from being adopted more widely. The goal of this paper is to identify and review the barriers to CCS development, with a focus on recent cost estimates, and to assess the potential of CCS to enable access to fossil fuels without causing dangerous levels of climate change.The result of the review shows that no CCS barriers are exclusively technical, with CCS cost being the most significant hurdle in the short to medium term. In the long term, CCS is found to be very cost effective when compared with other mitigation options. Cost estimates exhibit a high range, which depends on process type, separation technology, CO2 transport technique and storage site.CCS potential has been quantified by comparing the amount of fossil fuels that could be used globally with and without CCS. In modelled energy system transition pathways that limit global warming to less than 2 °C, scenarios without CCS result in 26% of fossil fuel reserves being consumed by 2050, against 37% being consumed when CCS is available. However, by 2100, the scenarios without CCS have only consumed slightly more fossil fuel reserves (33%), whereas scenarios with CCS available end up consuming 65% of reserves. It was also shown that the residual emissions from CCS facilities is the key factor limiting long term uptake, rather than cost. Overall, the results show that worldwide CCS adoption will be critical if fossil fuel reserves are to continue to be substantively accessed whilst still meeting climate targets.


 
 
 
 Aim: This article provides insight into the portfolio of regulations advancing Carbon Capture and Storage (CCS) deployment. Using a taxonomy of policy portfolio tools adapted for regulations specific to CCS, this research identifies regulatory gaps as well as supports for CCS projects.
 Design / Research methods: Through a case study approach, this article analyzes the regulatory provisions in six jurisdictions (Texas, North Dakota, the U.S, Saskatchewan, Alberta and Canada) which have a successful CCS facility. Analyzing the provisions and content of regulations in these jurisdictions, this article highlights regulatory supports or areas of gaps for CCS projects in each jurisdiction.
 Conclusions / findings: There is no uniform definition or categorization of CO2 as a hazard, waste, pollutant or commodity across jurisdictions. This has serious impact on CO2 transport, especially across jurisdictions. It also impacts the administration of storage systems for CCS facilities. Regulations focusing primarily on technical aspects of CCS including capture, transport, and liability predominate while there are less regulatory provisions for the financial aspects of CCS technology as well as public engagement and support. While capital grants and emission and tax credits are the predominant financial issues covered in regulations, contract for differences, streamlining emission trading across borders and enhancing cooperation and multilevel engagement in CCS warrant more attention.
 Originality / value of the article: Many scenarios to maintain global warming below 2 degrees Celsius require combinations of new technology including CCS. The focus on CCS cost as a barrier to deployment overshadows the needs for regulatory support as a means of reducing uncertainties and de-risking CCS investments.
 
 
 
 
 

Best practices and recent advances in CCS cost engineering and economic analysis

A proposed methodology for CO2 capture and storage cost estimates

Feasible roadmap for CCS retrofit of coal-based power plants to reduce Chinese carbon emissions by 2050

The UK has made a binding commitment to reach net zero emissions by 2050 and Carbon Capture and Storage (CCS) is seen as a key component of getting there. In the March 2020 spring budget statement the UK Government committed a minimum spending of £800million to promote the development of CCS and help address the concerns regarding the cost of CCS. Here we find that a Government investment of £1.75billion in critical CO2 transport and storage infrastructure over a 6 year period can be an effective stimulus to the economy while importantly laying the foundations for reducing emissions from key industries over the coming decades. Ultimately, the cumulative 30-year GDP boost associated with the investment equates to around £0.2million of cumulative GDP per £million spent in a time frame up to 2026. Importantly given current COVID -19 related circumstances, the investment can lead to the almost immediate creation of thousands jobs in a number of sectors. Over a 6 year period the job creation associated with the expansion leads to an additional 3,850 full-time equivalent (FTE) jobs in the first year, between 2,250 and 2,670 additional FTE jobs in each of the subsequent 4 years, and 1,700 in 2026. The societal return is the transitory creation of one additional job per £1million spend in the 6 year time frame. As is common with any large public investment, consideration should be given to the subsequent effects on prices and exports which may be constrained as a result. Beyond our analysis, a key question remains how a large-scale operational CCS sector can constitute a fiscally and economically sustainable return to public and private sector investments. Could CCS provide a sustained financial contribution by helping to sustain industrial activity, maintain employment, minimises potential losses in productivity, and prevent offshoring of industries, emissions and jobs while crucially allowing key industries to reduce their emissions in line with targets set out in UK law?

The moderating effect of emission reduction policies on CCS mitigation efficiency

Being home to the largest oil and gas operators, its advanced subsurface technologies, extensive expertise, skilled labor, and abundant resources, the Middle East is a prime region for large-scale deployment of Carbon Capture and Storage (CCS) technology. Driven by the obligations of reducing carbon emissions and maintaining economic competitiveness in a carbon-constrained world; this study examines the regulatory foundations, and the market dynamics shaping CCS initiatives in the region. This study assesses the current deployment of (CCS) technology in the Middle East. It involves an analysis to assess the region's growing commitment to CCS within its broader sustainability and economic diversification strategies. The evaluation of government policies and incentives, such as carbon pricing mechanisms and investment subsidies, helps determine their effectiveness in supporting CCS initiatives and mitigating technological uncertainties. Moreover, the study reviews the adoption of international best practices to ensure safe, long-term CO2 storage and optimize storage capacity. Finally, the study identifies the critical roles of governments, industry stakeholders, and international partners in overcoming regulatory and technical barriers, emphasizing the need for collaborative efforts in advancing CCS deployment in the Middle East. This study is performed using published data for the pilot CCS and Co2 EOR projects in the Middle East highlighting the current regulatory frameworks. The Middle East shows a strong and increasing commitment to CCS, various governments in the region have introduced supportive policies and incentives, such as carbon pricing mechanisms and investment subsidies, to mitigate technological uncertainties and address challenges like water scarcity. Demand forecasts and market assessments indicate substantial potential for CCS, particularly in industrial hubs with high CO2 emissions, driven by regulatory pressures and the strategic importance of CCS for the long-term viability of the oil and gas sector. Successful CCS deployment requires collaboration between stakeholders. Overall, the region's advanced capabilities positioning it uniquely to lead in CCS initiatives in addition CCS is poised to play a pivotal role in the Middle East's energy transition, contributing significantly to carbon mitigation and economic resilience, emphasizing the importance of tailored approaches and collaborative efforts to realize the full potential of CCS in the region. This study offers a fresh perspective by thoroughly analyzing MENA's high potential for large-scale deployment of Carbon Capture and Storage (CCS) technologies. It highlights the region's proficiency ineffectively implementing CCS technologies and the potential for the Middle East to significantly enhance the global reputation of CCS by fostering public acceptance and reassurance. Through a detailed examination, the study provides novel insights into the potential and strategic importance of CCS in securing the long-term viability of the oil and gas sector while meeting climate targets.

Nowadays, CO2 is the primary greenhouse gas pollutant and fossil fuel-fired electrical power plants are the major producer of CO2. In this regard, it is required to equip the electrical power plants with carbon capture and storage (CCS) systems. This paper addresses a multistage generation expansion planning (GEP) including nuclear units, renewable energy units, and different fossil fuel-fired units equipped with CCS. The proposed GEP minimizes the planning costs and CO2 at the same time, while it considers CCS cost and revenue. The problem is mathematically expressed as a constrained, mixed-integer, and nonlinear optimization problem and solved using particle swarm optimization (PSO) algorithm. The problem considers all practical constraints including security constraints of the network, and the generating units constraints of operation. Simulation results demonstrate that utilizing CCS significantly impacts on the planning output. Eventually, a comprehensive sensitivity analysis is carried out based on the CCS cost and revenue.

‘Clean’ hydrogen? – Comparing the emissions and costs of fossil fuel versus renewable electricity based hydrogen

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 cents/kWh higher with capture than for conventional plants (with a range of 8-12 cents/kWh). Costs of abatement are found typically to be approximately US$150/tCO2 avoided (with a range of US$120-180/tCO2 avoided). For NOAK plants the additional cost of electricity with capture is approximately 2-5 cents/kWh, with costs of the range of US$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 US$110/tCO2 avoided (with a range of US$90-135/tCO2 avoided). For NOAK plants costs are expected to be US$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 US$100-150/tCO2 for first-of-a-kind plants and perhaps US$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.

Limits to Paris compatibility of CO2 capture and utilization

In chemical engineering design, process plants are often capable of turndown and flexible operation to maximise profitability depending on demand and price signals, and the optimisation of these processes needs to take into account the variability in the plant operation. By performing the optimisation with flexible operating conditions the overall plant performance can be improved. The optimisation process makes use of two computational modelling techniques: multi-objective optimisation (MOO) and surrogate modelling. Multi-objective optimisation allows for the optimisation of two or more competing variables simultaneously. In the cases studied here, the long individual simulation time coupled with the large number of individual simulations required meant that the total simulation time was prohibitive for dynamic MOO. In order to reduce computation time surrogate models of the processes are developed using artificial neural networks. A statistical dynamic modelling framework within a multi-objective optimisation methodology is developed to optimise a process plant’s performance. Here the dynamic modelling is used to optimise the economic and environmental performance of natural gas combined cycle power plant systems fitted with carbon capture and storage (CCS) and solar thermal energy (STE) in a time-integrated MOO framework. This framework allows for variable process inputs and flexible operation based on external signals, such as product price. By introducing a probabilistic approach to the modelling of flexible operation allows for more data to be included in the analysis. The methodology for dynamic modelling of flexible operation could be applied to other industrial processes that face similar dynamic economic and/or environmental conditions. From a CCS standpoint dynamic MOO was used to show that variable capture can be used to make the CCS plant more profitable over steady state operation. At a capture rate of 80 % the NPV of a gas turbine combined cycle with CCS improved by 38 m$AU by utilising flexible operation of the capture process. This also allows for various economic scenarios to incentivise the reduction of CO₂ emissions from natural gas based power plants, with the use of CCS and STE used to reduce the greenhouse emissions. The economic strategies of a carbon price and governmental grants are investigated to determine the levels of policy help to incentivise implementing CO₂ reduction technologies. In order to achieve a financial incentive for limiting CO₂ emissions from a combined cycle power plants equipped with CCS a government co-investment grant of 50 % of the capital costs and a carbon price of 83 $AU/tCO₂ is required.

Representing the costs of low-carbon power generation in multi-region multi-sector energy-economic models