Managing the risks of climate change requires the development and adoption of a wide range of low-carbon technologies across many industrial sectors.
It is likely that the stringent targets of 450ppm can only be achieved efficiently with a portfolio of technologies that include options that have the potential for removing carbon dioxide (CO2) from the atmosphere as well as negating CO2 emissions from industrial sources, such as carbon capture and storage (CCS) technologies.
This paper focuses on the electric power generation industry, and examines the costs of different technologies that are expected to play a part in reducing carbon dioxide emissions to the atmosphere.
The Global CCS Institute has been tracking and reporting on the latest cost studies of various CCS technologies for the past two years. Together with recent studies into other low-carbon technologies, current cost estimates for a range of low-carbon technologies are compared including CCS, wind, nuclear, and solar thermal and solar photovoltaics. The comparison is done on an equivalent basis using a consistent methodology and underlying economic assumptions for the technologies.
The key findings are:
- CCS is a competitive power sector emissions abatement tool when compared to other low-carbon technologies.
- Hydropower and onshore wind technologies are among the least-cost technologies identified for reducing emissions from the power sector.
- Once these relatively low-cost technologies options are fully exploited – because of limits in their availability – or in countries where these technologies are not an option, CCS becomes a very competitive option.
- The cost of mitigating, or avoiding, CO2 emissions for a coal power plant fitted with current CCS technology ranges from US$23-92 per tonne of CO2 and is a little higher for natural gas fuelled power plants. This is compared to an avoided cost of US$90-176/tonne for offshore wind, US$139-201/tonne for solar thermal, and even more for solar PV.
- It is important to note that the costs of new technologies that have not yet reached full maturity, such as CCS amongst others, will become lower in the future.
- These findings are in line with International Energy Agency (IEA) estimates that identify that without CCS, abatement costs in the electricity sector could be higher by more than 70 per cent.