CO2 Abatement Costs Research Articles

Energy conservation measures for the German cement industry and their ability to compensate for rising energy-related production costs

Cement is a bulk commodity that is correlated with the population growth. While the world-wide sales are continuously increasing, the demand for cement in Germany is stagnating. Nevertheless, cement production accounts for 3.8% of Germany's industrial final energy consumption and 2.9% of Germany's total CO2 emissions in 2012. We assessed the energy conservation and CO2 abatement potential of 21 identified measures by deriving fuel, electricity conservation and CO2 abatement cost curves. In our bottom-up investigation, we account for the current efficiency of plants and use two different system boundaries: a process boundary for benchmarking measures and a facility boundary for calculating the total potential. We identified economical conservation and abatement potentials for the year 2013 of 4% for fuel, 0.7% for electricity and 3.4% fuel and process-related CO2 emissions in relation to 2012. The results of the subsequent sensitivity analysis showed that electricity conservation measures in cement grinding can compensate for higher electricity prices in the amount of the German electricity tax. In contrast, the sector's energy-related productions costs showed a high sensitivity against rising CO2 prices. Without radical process innovations such as low carbon cements, CO2 prices until 2035 accounted in average for more than 40% of the gross value-added which indicates, according to the EU ETS directive, the carbon leakage risk of the cement sector.

Estimating the CO2 abatement cost: Substitute Price of Avoiding CO2 Emission (SPAE) by Renewable Energy׳s Feed in Tariff in selected countries

Abstract Many renewable energy policies are looking into new incentives to absorb investments by targeting abating CO 2 emission and fixing energy price fluctuation. Feed in Tariff (FIT) is a policy for rebating the amount of generated renewable electricity to investor. FIT is also defined as a CO 2 mitigation policy in electricity generation from renewable sources. This paper presents a cost benefit survey that estimates the real produced carbon dioxide for electricity generation in selected countries. This study introduces the substitute price of avoiding CO 2 emission as an indicator. The new indicator shows how much is paid for avoiding CO 2 by each selected countries through the FIT policy for renewable technologies. The amount calculated for solar energy is taken as a case in this paper. The result confirms that the FIT policy reasonably works for solar energy in absorbing investment. However the FIT policy claims a large portion of liquidity compared with other approaches. Hence makes this mechanism inept as a CO 2 mitigation policy.

Does Carbon Revenue Finance Learning Investment? Evidence from the Wind Power Sector in China

This paper empirically investigates the implications of setting up sector-wide consistency between climate finance and technology adoption in the wind power sector. Relying on a panel dataset consisting of information from 1207 CDM wind projects in thirty provinces over the period of 2004-2011, this study estimates the learning rate of wind technology deployment and forecasts the learning investment corresponding to the additional costs required to reach breakeven point under the constraints of wind resources and grid capacity. Carbon revenue is estimated to be USD18/ton CO2 in order to provide funding for this learning investment. The relative low CO2 abatement cost supports the feasibility of linking carbon finance and learning investment unless the expected learning rate is sufficiently high.

Impacts of different diffusion scenarios for mitigation technology options and of model representations regarding renewables intermittency on evaluations of CO2 emissions reductions

This paper evaluated the impacts of climate change mitigation technology options on CO2 emission reductions and the effects of model representations regarding renewable intermittency on the assessment of reduction by using a world energy systems model. First, different diffusion scenarios for carbon dioxide capture and storage (CCS), nuclear power, and wind power and solar PV are selected from EMF27 scenarios to analyze their impacts on CO2 emission reductions. These technologies are important for reducing CO2 intensity of electricity, and the impacts of their diffusion levels on mitigation costs are significant, according to the analyses. Availability of CCS in particular, among the three kinds of technologies, has a large impact on the marginal CO2 abatement cost. In order to analyze effects of model representations regarding renewables intermittency, four different representations are assumed within the model. A simplistic model representation that does not take into consideration the intermittency of wind power and solar PV evaluates larger contributions of the energy sources than those evaluated by a model representation that takes intermittency into consideration. Appropriate consideration of renewables intermittency within global energy systems models will be important for realistic evaluations of climate change mitigation scenarios.

Assessment of the emission reduction target of halving CO2 emissions by 2050: Macro-factors analysis and model analysis under newly developed socio-economic scenarios

This paper assesses the global emission reduction target of halving CO2 emissions by 2050. First, future GDPs with specific uncertainty ranges were developed. The Kaya identity and the developed GDP outlook indicate that halving global CO2 emissions by 2050, which corresponds to almost 450 ppm-CO2eq. stabilization, requires an improvement approximately four times as large as the historical CO2 intensity improvement rate on average up to 2050, if GDP loss should remain within a few percent of potential baseline GDP. In addition, the global energy-related CO2 emission reductions were assessed by using an energy systems model. Marginal abatement cost of CO2 is over 470 $/tCO2 for halving global CO2 emissions by 2050 relative to 2005 even under the lower GDP scenario and technology improvements. Great challenges will have to be met for achieving the 450 ppm-CO2eq. Realistic alternative emission reduction scenarios should be explored in two ways; 1) more innovative technological development than any present imaginable development, and/or drastic social innovations are needed for cheaper carbon costs, e.g., within a few tens of US$ per tonne of CO2, and 2) more modest emission reduction targets, e.g., 550 ppm-CO2eq., and adaptation measures are considered.

CO2 abatement costs of greenhouse gas (GHG) mitigation by different biogas conversion pathways

Biogas will be of increasing importance in the future as a factor in reducing greenhouse gas emissions cost-efficiently by the optimal use of available resources and technologies. The goal of this study was to identify the most ecological and economical use of a given resource (organic waste from residential, commercial and industry sectors) using one specific treatment technology (anaerobic digestion) but applying different energy conversion technologies. Average and marginal abatement costs were calculated based on Life Cycle Cost (LCC) and Life Cycle Assessment (LCA) methodologies. Eight new biogas systems producing electricity, heat, gas or automotive fuel were analyzed in order to identify the most cost-efficient way of reducing GHG emissions. A system using a combined heat and power station (which is connected to waste treatment and digestion operation facilities and located nearby potential residential, commercial or industrial heat users) was found to be the most cost-efficient biogas technology for reducing GHG emissions. Up to € 198 per tonne of CO2 equivalents can be saved by replacing the “business as usual” systems based on fossil resources with ones based on biogas. Limited gas injection (desulfurized and dried biogas, without compression and upgrading) into the gas grid can also be a viable option with an abatement cost saving of € 72 per tonne of CO2 equivalents, while a heating plant with a district heating grid or a system based on biogas results in higher abatement costs (€ 267 and € 270 per tonne CO2 eq). Results from all systems are significantly influenced by whether average or marginal data are used as a reference. Beside that energy efficiency, the reference system that was replaced and the by-products as well as feedstock and investment costs were identified to be parameters with major impacts on abatement costs. The quantitative analysis was completed by a discussion of the role that abatement cost methodology can play in decision-making.

Modelling the impacts of challenging 2050 European climate mitigation targets on Ireland’s energy system

The Copenhagen Accord established political consensus on the 2°C limit (in global temperature increase) and for deep cuts in greenhouse gas (GHG) emissions levels to achieve this goal. The European Union has set ambitious GHG targets for the year 2050 (80–95% below 1990 levels), with each Member State developing strategies to contribute to these targets. This paper focuses on mitigation targets for one Member State, Ireland, an interesting case study due to the growth in GHG emissions (24% increase between 1990 and 2005) and the high share of emissions from agriculture (30% of total GHG emissions). We use the Irish TIMES energy systems modelling tool to build a number of scenarios delivering an 80% emissions reduction target by 2050, including accounting for the limited options for agriculture GHG abatement by increasing the emissions reduction target for the energy system. We then compare the scenario results in terms of changes in energy technology, the role of energy efficiency and renewable energy. We also quantify the economic impacts of the mitigation scenarios in terms of marginal CO2 abatement costs and energy system costs. The paper also sheds light on the impacts of short term targets and policies on long term mitigation pathways.

Bioenergy production and use: Comparative analysis of the economic and environmental effects

This study analyses the use of liquid, solid and gaseous biomass for power generation in Germany with respect to the Renewable Energy Sources Act (EEG), a significant policy instrument for promoting electricity generation based on renewable energy sources. The aim is the identification of bioenergy conversion pathways that have a low environmental impact and are cost-effective. To achieve this objective several research steps were undertaken, including a life-cycle analysis (LCA), economic analysis and the determination of the CO2 abatement costs.Besides, the authors show and discuss how a simplification of the environmental assessment by considering only the impact category greenhouse gases or the application of different calculation methodologies (i.e. allocation rules between electricity and heat produced) can affect the results.Overall the results show that the use of solid (wood) and gaseous biomass pathways causes both the lowest environmental impacts and electricity production costs when used for electricity generation. The choice of the modelling and calculation methodology may significantly influence the outcome (i.e. application of an exergetic allocation increases the environmental burden related to electricity generation). The lowest CO2-abatement costs were determined for the biodegradable waste pathway.

Climate change external cost appraisal of electricity generation systems from a life cycle perspective: the case of Greece

Abstract The aim of the present work is to estimate the carbon footprint of the Greek electricity sector and the associated damages. This is being realized by quantifying the external cost related with the climate change airborne emissions (i.e. carbon dioxide) generated during all stages of the power plants life cycle in Greece. For this purpose, the paper applies the EcoSenseLE tool, together with the basic principles of the Life Cycle Assessment (LCA) approach. The examined external cost has been calculated for seven types of power plants. Results show that hydro and wind power plants have an excellent performance; close to them is the performance of PV and biomass-fired power plants. The performance of natural gas-fired power plants is good, while the performance of oil-fired power plants is, as it is expected poor. Lignite clearly has the worst performance, which affects the average external cost of the sector, since it is the dominant energy source in electricity production in Greece. Regarding the life cycle stages, for thermal systems, the climate change external cost is primarily made of CO2 emitted at the power plant, while in hydro, wind and PV systems, it is totally associated with the plant construction stage. Moreover, the paper includes also issues regarding the evolution of the examined footprint within the next years, considering the various Greek national policies and measures that have been announced and started to be realized; the cost/benefit analysis (CBA) of these policies and measures based on this footprint; and the investigation if this CBA is being affected by the CO2 abatement cost associated with the various external cost estimation approaches.

Estimating Potential and Costs of Reducing CO2 Emissions in Lithuanian Buildings

The EU is considering increasing the GHG emissions reduction target by 2020 from 20% to 30% by committing each member state to tighten up its emission reduction goals. According to the recent study such decision could cost some 2 365 million LTL to Lithuanian economy. Evaluation and comparison of CO2 abatement costs incurred by the state implementing a variety of measures in different sectors allow choosing a most cost effective policy scenario. The paper focuses on CO2 emissions related to energy use in buildings. First, this paper reviews the role of the Lithuanian building stock in overall GHG emissions. Then the paper examines the existing studies on the CO2 mitigation potential and cost in buildings. Given the limitations of existing evaluation and lack of comprehensive modelling in the existing studies, this paper proposes a framework for examining the technology options aimed to inform policy making on the options to reduce CO2 emissions in Lithuanian housing and service sectors.DOI: http://dx.doi.org/10.5755/j01.erem.59.1.680

Marginal abatement costs of carbon dioxide in China: A nonparametric analysis

Abstract The estimates of abatement costs about CO2 can provide useful information for policy-makers. With the framework of production theory, a marginal abatement costs model is established using the nonparametric method, and empirical results about China in 2007 are found in this paper. The two CO2 reduction strategies, maintaining the level of CO2 or reducing CO2 and expanding GDP at the same time, impact potential GDP greatly. 143.5 millions CO2 reduction means 35.1billions GDP loss and the marginal abatement cost of CO2 is 475.3yuan/ton on average.

Review of the various CO2 mineralization product forms

Two experimental modes of operation, a sequence of batch and a continuous one, have demonstrated the technical feasibility of Shell’s proposed slurry-based direct flue gas mineralization concept on the basis of activated serpentine. The base case mineralization concept can be simplified yielding a variety of product forms and significantly reduced CO2 abatement costs. Combined with a positive first assessment of the sustainability of the various mineralization product forms, all mineralization concepts deserve to be further investigated. To optimally take advantage of integration opportunities so as avoid parasitic CO2 emissions and minimize cost, this should be done over the complete technology chain.

Forecasting the CO2 Certificate Price Risk

Modeling the price risk of CO2 certificates is one important aspect of integral corporate risk management related to emissions trading. The paper presents a risk model which may be the basis for evaluating the risk of emission certificate prices. We assume that the certificate price is determined by the expected marginal CO2 abatement costs prevailing at the current trade period and stochastically fluctuates around the respective level as returned from the mean reversion process. Due to uncertainties about future environmental states we suppose that within one trade period, erratic changes in the expected marginal abatement costs may occur leading to shifts in the price level. The aim of the work is to model the erratic changes of the expected reversion level and to estimate the parameters of the mean reversion process.

Climate policy in Western Europe and avoided costs of air pollution control

Abstract Abatement of CO2 emissions will be accompanied by reduced air pollutant emissions such as particulate matter (PM), SO2, and NOx. This, in turn, will reduce the need for end of pipe (EOP) pollution control technologies to meet future air quality targets. This dynamic could put more stringent air quality goals within reach, and increase the political feasibility of climate policy. This paper presents a CGE model that has been modified to include the emissions and EOP abatement of PM, SO2, and NOx from stationary sources in the EU-17. Emissions of pollutants are modeled as fixed-factor complementary inputs to their associated source. Abatement in each sector is modeled as a substitution between the pollutants and discrete abatement technologies, each of which is sector-specific and characterized by a marginal abatement cost and technical capacity constraint. Scenarios are run to 2020, to assess the costs and co-benefits of simultaneous air quality and climate policies. We find that under the Kyoto Protocol in 2010, the welfare cost of pollution control is reduced by 16% compared to the baseline, effectively offsetting the cost of CO2 abatement by 15%. The co-benefit results depend heavily on policy choices, and their magnitude relative to total costs is likely to decline as greenhouse targets become more ambitious. In our scenarios, pollution control cost savings range from 1.3 to 20% in 2020, yielding a climate cost offset range of 0.2 to 3.9%. The CO2 credit imports allowed by the EU via the Clean Development Mechanism (CDM) offer a total savings of $9.7bn in 2020, but only need to be compensated by an additional $0.3–0.4bn in domestic pollution control from stationary sources.

Multi-objective design optimization of a natural gas-combined cycle with carbon dioxide capture in a life cycle perspective

The use of multi-objective optimization techniques is attractive to incorporate environmental objectives into the design of energy conversion systems. A method to locally optimize a given process while considering its global environmental impact by using life cycle assessment (LCA) to account for avoidable and unavoidable off-site emissions for each independent material input is presented. It is applied to study the integration of a CO2-capture process using monoethanolamine in a natural gas-combined cycle power plant, simultaneously optimizing column dimensions, heat exchange, and absorbent flow configuration with respect to two objectives: the levelized cost of electricity and its life cycle global-warming potential. The model combines a process flow-sheeting model and a separate process-integration model. After optimization using an evolutionary algorithm, the results showed that widening the absorber and generating near-atmospheric pressure steam are cost-effective options but that increasing stripper complexity is less so. With $7.80/GJ natural gas and $20/ton CO2 handling, the minimum on-site CO2 abatement cost reaches $62.43/ton on a life cycle basis, achieved with a capture rate of over 90%. Of this, $2.13/ton is related to off-site emissions – a specific advantage of LCA that could help industries and governments anticipate the actual future costs of CO2 capture.

園芸施設におけるバイオマスガス化＋燃料電池CGSのシステム分析

The necessity of the low carbon society has been more significant since Toya Lake summit was held in Hokkaido, Japan. Under the circumstances, the biomass energy system and/or fuel cell system are promising systems for CO2 emission mitigation. In order to promote PEFC-CGS (Polymer Electrolyte Fuel Cell Co-generation), on the promotion of PEFC-CGS, we have to solve the discrepancy between the supply and the demand. In this paper, the operating cost, the equivalent CO2 emissions including N2O emissions and CO2 abatement cost for the greenhouse facility of strawberries in which PEFC-CGS was installed were analyzed. Through the Blue Tower process, which is one of gasification processes, the high concentration hydrogen gas (Bio-H2) is synthesized. The PEFC-CGS operation using Bio-H2 fuel, that is, the PEFC-CGS combined with BT gasifier would be extremely significant for the realization of low carbon emission society. In our analyses, the green house scale was assumed to be 1 to 5 ha. As a result, the power efficiency and the heat recovery efficiency were 24.0 LHV-% and 22.1 LHV-%, respectively. Also, the annual CO2 emissions in the case of 1ha green house were 2,350t-CO2/yr, and the abatement cost range was between 7,675 and 33,393 JPY/t-CO2.

Carbon dioxide sequestration: how much and when?

Carbon dioxide (CO2) sequestration has been proposed as a key component in technological portfolios for managing anthropogenic climate change, since it may provide a faster and cheaper route to significant reductions in atmospheric CO2 concentrations than abating CO2 production. However, CO2 sequestration is not a perfect substitute for CO2 abatement because CO2 may leak back into the atmosphere (thus imposing future climate change impacts) and because CO2 sequestration requires energy (thus producing more CO2 and depleting fossil fuel resources earlier). Here we use analytical and numerical models to assess the economic efficiency of CO2 sequestration and analyze the optimal timing and extent of CO2 sequestration. The economic efficiency factor of CO2 sequestration can be expressed as the ratio of the marginal net benefits of sequestering CO2 and avoiding CO2 emissions. We derive an analytical solution for this efficiency factor for a simplified case in which we account for CO2 leakage, discounting, the additional fossil fuel requirement of CO2 sequestration, and the growth rate of carbon taxes. In this analytical model, the economic efficiency of CO2 sequestration decreases as the CO2 tax growth rate, leakage rates and energy requirements for CO2 sequestration increase. Increasing discount rates increases the economic efficiency factor. In this simple model, short-term sequestration methods, such as afforestation, can even have negative economic efficiencies. We use a more realistic integrated-assessment model to additionally account for potentially important effects such as learning-by-doing and socio-economic inertia on optimal strategies. We measure the economic efficiency of CO2 sequestration by the ratio of the marginal costs of CO2 sequestration and CO2 abatement along optimal trajectories. We show that the positive impacts of investments in CO2 sequestration through the reduction of future marginal CO2 sequestration costs and the alleviation of future inertia constraints can initially exceed the marginal sequestration costs. As a result, the economic efficiencies of CO2 sequestration can exceed 100% and an optimal strategy will subsidize CO2 sequestration that is initially more expensive than CO2 abatement. The potential economic value of a feasible and acceptable CO2 sequestration technology is equivalent – in the adopted utilitarian model – to a one-time investment of several percent of present gross world product. It is optimal in the chosen economic framework to sequester substantial CO2 quantities into reservoirs with small or zero leakage, given published estimates of marginal costs and climate change impacts. The optimal CO2 trajectories in the case of sequestration from air can approach the pre-industrial level, constituting geoengineering. Our analysis is silent on important questions (e.g., the effects of model and parametric uncertainty, the potential learning about these uncertainties, or ethical dimension of such geoengineering strategies), which need to be addressed before our findings can be translated into policy-relevant recommendations.

Power Generation Investments and Technology Choices under Emissions Trading

The overall purpose of this paper is to analyse how power generation technology choices will be affected by climate policy. Special attention is paid to the dissemination of renewable power technologies following climate policy initiatives in Sweden and Eastern Europe. An overall conclusion is that carbon policy will affect new investments in renewable power technologies in both Sweden and Eastern Europe, but it is difficult to provide a comprehensive assessment of the future power generation technology mix. In the Swedish case, it is suggested that in general it is not certain that compliance with the Kyoto commitments implies substantial increases in renewable power sources. If, therefore, renewable power sources are favoured for reasons beyond climate policy, additional policy instruments will be needed. In the Eastern European case it is indicated that although it is clear that the Eastern European countries are not homogeneous in terms of CO2 abatement potential and costs, no single country emerges a...

CO2 Capture and Storage with Leakage in an Energy-Climate Model

Geological CO2 capture and storage (CCS) is among the main near-term contenders for addressing the problem of global climate change. Even in a baseline scenario, with no comprehensive international climate policy, a moderate level of CCS technology is expected to be deployed, given the economic benefits associated with enhanced oil and gas recovery. With stringent climate change control, CCS technologies will probably be installed on an industrial scale. Geologically stored CO2, however, may leak back to the atmosphere, which could render CCS ineffective as climate change reduction option. This article presents a long-term energy scenario study for Europe, in which we assess the significance for climate policy making of leakage of CO2 artificially stored in underground geological formations. A detailed sensitivity analysis is performed for the CO2 leakage rate with the bottom-up energy systems model MARKAL, enriched for this purpose with a large set of CO2 capture technologies (in the power sector, industry, and for the production of hydrogen) and storage options (among which enhanced oil and gas recovery, enhanced coal bed methane recovery, depleted fossil fuel fields, and aquifers). Through a series of model runs, we confirm that a leakage rate of 0.1%/year seems acceptable for CCS to constitute a meaningful climate change mitigation option, whereas one of 1%/year is not. CCS is essentially no option to achieve CO2 emission reductions when the leakage rate is as high as 1%/year, so more reductions need to be achieved through the use of renewables or nuclear power, or in sectors like industry and transport. We calculate that under strict climate control policy, the cumulative captured and geologically stored CO2 by 2100 in the electricity sector, when the leakage rate is 0.1%/year, amounts to about 45,000 MtCO2. Only a little over 10,000 MtCO2 cumulative power-generation-related emissions are captured and stored underground by the end of the century when the leakage rate is 1%/year. Overall marginal CO2 abatement costs increase from a few €/tCO2 today to well over 150 €/tCO2 in 2100, under an atmospheric CO2 concentration constraint of 550 ppmv. Carbon costs in 2100 turn out to be about 40 €/tCO2 higher when the annual leakage rate is 1%/year in comparison to when there is no CO2 leakage. Irrespective of whether CCS deployment is affected by gradual CO2 seepage, the annual welfare loss in Europe induced by the implementation of policies preventing “dangerous anthropogenic interference with the climate system” (under our assumption, implying a climate stabilisation target of 550 ppmv CO2 concentration) remains below 0.5% of GDP during the entire century.

Co2 Abatement Costs and Permits Price: Exploring the Impact of Banking and the Role of Future Commitments

Since the signing of the Kyoto Protocol in December 1997, several authors have computed the costs of reducing greenhouse gas emissions by the amount specified in the Protocol, while accounting for the possibility to use the flexible mechanisms of the Protocol (internationally tradable emission permits). A number of such studies have recently shown that, following the US withdrawal and the Bonn and Marrakesh agreements, these abatement costs will be very low and the price of the permits could reach zero. However, these analyses usually take only the first commitment period (20082012) into account and do not explicitly consider the possibility of banking permits from one commitment period to the other (Art. 3.13 of the Protocol). The simple dynamic model that we develop here introduces this possibility. It allows one to analyze the impact of alternative future commitments (post 2012) for the US and the non-Annex B countries on world emissions, abatement costs and the permits price. We find that, provided ambituous post-Kyoto commitments are negotiated: (i) in 2008-2012, the amount of banked permits will largely exceed the amount of hot air and permits prices will be much higher than predicted by most other studies, (ii) the banking provision significantly reduces world total costs but increases total costs for all permit-importing Annex B countries (i.e. all Annex B countries except countries of eastern Europe) via a rise in the permits price in 2008-2017 and (iii) the issue of market power on hot air is not likely to be a relevant one.