CCS: Keeping the lights on without costing the earth
Carbon Capture and Storage (CCS) is a cost effective and affordable way to help secure, low carbon energy supplies. The cost of reducing carbon dioxide (CO2) emissions will be dramatically higher without CCS, up to 70% higher internationally (according to the IEA).
The cost of individual CCS project can vary substantially depending on the source of the carbon dioxide to be captured, the distance to the storage site and the characteristics of the storage site. The cost of capturing the carbon dioxide is typically the greatest cost of a CCS project. Recent studies conclude that the first CCS projects in the power sector are likely to cost between €60 – 90 per tonne of carbon dioxide abated although these costs are expected to decline significantly reaching €35 – 50 in the early 2020s primarily as a result of cost reductions for carbon dioxide capture.
Deploying CCS on coal fired power plants is already cost-competitive (per tonne of carbon dioxide emission abated) with other forms of low-carbon energy. Our next step should be to build commercial-scale power plants with CCS to optimise operations and so realise future cost reductions.
Low-cost CCS projects can be developed where carbon dioxide is already separated as part of an existing industrial process, resulting in a pure carbon dioxide stream with very low capture costs. Where these pure carbon dioxide streams are located close to suitable geological storage sites, the complete CCS project chain can be developed at a relatively low cost. Natural gas processing and ammonia plants are examples of industrial activities that separate carbon dioxide as part of standard industrial activity and which may be suitable for developing low-cost CCS projects.
As with other forms of low-carbon generation, first-of-a-kind CCS projects will be subject to higher costs and somewhat greater technical uncertainties. They will therefore need additional incentives as – with the exception of some of the low-cost CCS opportunities – they cannot be developed based on current carbon prices. CCS should be treated similar to other low-carbon technologies; it needs only a long-term support structure equivalent to that which has been given to other low-carbon technologies in recent years.