Carbon Capture and Storage - Cost

Cost

Although the processes involved in CCS have been demonstrated in other industrial applications, no commercial scale projects which integrate these processes exist; the costs therefore are somewhat uncertain. Some recent credible estimates indicate that a carbon price of US$60 per US-ton is required to make capture and storage competitive, corresponding to an increase in electricity prices of about US 6c per kWh (based on typical coal-fired power plant emissions of 2.13 pounds CO₂ per kWh). This would double the typical US industrial electricity price (now at around 6c per kWh) and increase the typical retail residential electricity price by about 50% (assuming 100% of power is from coal, which may not necessarily be the case, as this varies from state to state). Similar (approximate) price increases would likely be expected in coal dependent countries such as Australia, because the capture technology and chemistry, as well as the transport and injection costs from such power plants would not, in an overall sense, vary significantly from country to country.

The reasons that CCS is expected to cause such power price increases are several. Firstly, the increased energy requirements of capturing and compressing CO₂ significantly raises the operating costs of CCS-equipped power plants. In addition, there are added investment and capital costs. The process would increase the fuel requirement of a plant with CCS by about 25% for a coal-fired plant, and about 15% for a gas-fired plant. The cost of this extra fuel, as well as storage and other system costs, are estimated to increase the costs of energy from a power plant with CCS by 30–60%, depending on the specific circumstances. Pre-commercial CCS demonstration projects are likely to be more expensive than mature CCS technology; the total additional costs of an early large-scale CCS demonstration project are estimated to be €0.5-1.1 billion per project over the project lifetime. Other applications are possible. In the belief that use of sequestered carbon could be harnessed to offset the cost of capture and storage, Walker Architects published the first CO₂ gas CAES application, proposing the use of sequestered CO₂ for Energy Storage on October 24, 2008. To date the feasibility of such potential offsets to the cost have not been examined.

The cost of CCS depends on the cost of capture and storage, which varies according to the method used. Geological storage in saline formations or depleted oil or gas fields typically cost US$0.50–8.00 per tonne of CO₂ injected, plus an additional US$0.10–0.30 for monitoring costs. When storage is combined with enhanced oil recovery to extract extra oil from an oil field, however, the storage could yield net benefits of US$10–16 per tonne of CO₂ injected (based on 2003 oil prices). This would likely negate some of the effect of the carbon capture when the oil was burnt as fuel. Even taking this into account, as the table above shows, the benefits do not outweigh the extra costs of capture.

Cost of electricity generated by different sources including those incorporating CCS technologies can be found in cost of electricity by source. If CO₂ capture was part of a fuel cycle then the CO₂ would have value rather than be a cost. The proposed Solar Fuel or methane cycle proposed by the Fraunhofer Society amongst others is an example. This "solar fuel" cycle uses the excess electrical renewable energy to create hydrogen via electrolysis of water. The hydrogen is then combined with CO₂ to create synthetic natural gas SNG and stored in the gas network. See the latest Cost Report on the Cost of CO₂ Capture produced by the Zero Emissions Platform

Governments around the world have provided a range of different types of funding support to CCS demonstration projects, including tax credits, allocations and grants. The funding is associated with both a desire to accelerate innovation activities for CCS as a low-carbon technology and the need for economic stimulus activities. As of 2011, approximately US$23.5bn has been made available to support large-scale CCS demonstration projects around the world.