Harvard’s Belfer Center for Science and International Affairs has published a blockbuster study, “Realistic Costs of Carbon Capture.” The paper concludes that First-of-a-Kind (FOAK) carbon capture and storage plants are going to be much more expensive than most people realize:
1. The costs of carbon abatement on a 2008 basis for FOAK IGCC plants are expected to be approximately $150/tCO2 avoided (with a range $120-180/tCO2 avoided), excluding transport and storage costs….
This yields “levelised cost of electricity on a 2008 basis is approximately 10¢/kWh higher with capture than for conventional plants.” So pick your favorite price for new coal plants – Moody’s said last year that is about 11¢/kWh – and add 10¢ and you get 20+¢/kWh.
We’re talking nuclear power prices (see “$26 Billion cost – $10,800 per kilowatt! – killed Ontario nuclear bid“).
But all is not lost for CCS, because we have many optimistic assumptions yet to be thrown in:
2. 2008 may have represented a peak in costs for capital-intensive projects. If capital costs de-escalate, as appears to be happening, then these costs may decline. If general cost levels were to return to those prevailing in 2005 to 2006, for example, the costs of abatement for FOAK plants would fall by perhaps 25-30 percent to a central estimate of some $110/tCO2 avoided (with a range of $90-135/tCO2 avoided).
3. Consequently, the realistic costs of FOAK plant seem likely to be in the range of approximately $100-150/tCO2.
Harvard’s analysis is a regular FOAK Festival!
But maybe 2008 is the normal price for capital intensive projects in a world building lots of new capital-intensive projects. And maybe capital costs are dropping because we are in the biggest financial meltdown since the Great Depression…. Nah!
Yet even this optimism only gets you down to 18 cents per kWh, give or take a few cents.
Don’t worry, though, because we can make yet more optimistic assumptions. Let’s hypothesize that the plants will drop in price “for more mature technologies (Nth-of-a-Kind plant),” which has been true of renewables, but isn’t so true of, say, big central station power plants like nuclear.
4. The costs of subsequent solid-fueled plant (again excluding transport and storage) are expected to be $35-70/tCO2 on a 2008 basis, reducing to $25-50/tCO2 allowing for capex de-escalation.
Ahh, capex de-escalation. It’s like a warm ocean that you can dive into and get lost in forever.
The bottom line is that these plants are gonna cost a staggering amount of money if anyone ever actually started building them. And without a couple of miracles occurring, they will still cost a lot in, say, 2025. That is not the biggest shock to CP readers (see “Is coal with carbon capture and storage a core climate solution?“), but it may be surprising to some:
5. The FOAK estimates are higher than many published estimates. This appears to represent a combination of previous estimates preceding recent capital cost inflation, greater knowledge of project costs following this more detailed study, and the additional costs of FOAK plants compared with the NOAK costs quoted in any published estimates.
But wait, we have one final knight in shining armor to rescue new CCS plants so they aren’t just plain FOAKs :
6. The value of EOR [enhanced oil recovery] can reduce the net cost of CCS to the economy to zero as oil prices approach approximately $75/bbl for FOAK plants if the full net value of the EOR accrues to the project.
Yes, if we allow the captured CO2 to be used to extract more oil from currently unprofitable wells, then the net cost of FOAKs vanishes.
Only two problems. First, while it may be okay to do a couple of experimental plants with EOR — assuming you can actually build them near a place where you have a lot of such oil wells, like Texas — you certainly wouldn’t want to make a habit out of this since the recovered oil, when burned, will release just about as much carbon dioxide as you “sequestered” underground, rendering the whole effort kind of pointless from a climate perspective (see “Rule Four of Offsets: No Enhanced Oil Recovery“).
Second, and more problematic I think, is that you would still be left with the cost of power of a new traditional coal plant which is greater than $0.10 a kilowatt hour. Now why would you do that when you’ve probably got this overabundance of moderate price natural gas to run in existing combined cycle gas turbines? Why would you do that when you can pair that natural gas with wind or concentrated solar power again for far lower emissions at a lower price, with no technology or price risk — and without having to rely on absurdly overoptimistic assumptions? And don’t get me started on why the Harvard study makes all these absurdly optimistic assumptions about the future price of CCS, but refuses to do the same for CSP, even though the price drop in that technology is infinitely more inevitable.
Back in the real world, I can’t imagine we are going to build many CCS plants over the next two decades, except for the handful that get massive government subsidies. In that regard, CCS is a lot like nuclear power.
A big hat tip to the best journalist in West Virginia, Ken Ward, Jr., for his Charleston Gazette story on this, “Carbon capture for coal costly, study finds.”
