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Abstract
This paper reviews and compares the prevailing methods, metrics and assumptions
that underlie current cost estimates for CO2 capture and storage (CCS)
technologies applied to fossil fuel power plants. This assessment reveals a
number of significant differences and inconsistencies across different studies,
not only in key technical, economic and financial assumptions related to the
cost of a CCS project, but also in the methods and elements of cost that are
included in a particular analysis. Such differences often are not readily
apparent in the cost results that are reported publicly. As a consequence,
there is likely to be some degree of confusion, misunderstanding, and
mis-representation of CCS cost information, especially among audiences not
familiar with the details of CCS costing methods. Given the current state of
CCS technology, more careful attention to the analysis and reporting of cost
uncertainties and variability also is especially important. A path forward is
suggested to improve the consistency and transparency of CCS cost
estimates.
Introduction and Objectives
Carbon capture and storage (CCS) is a potentially critical technology for
mitigating global climate change, but its current cost is a major barrier to
applications at power plants and other large industrial sources of CO2. Efforts
are underway to develop new lower-cost technologies, especially for CO2
capture—the costliest component of a CCS system [1]. Given its importance,
information on CCS costs is sought by a broad range of actors and organizations
for investment decisions, technology assessments, R&D activities, policy
analysis, and energy and environmental policy-making (including legislation and
regulations involving CCS).
Yet, as this paper will show, there are significant differences and
inconsistencies in the way that CCS costs are currently calculated and reported
by various authors and organizations involved in CCS technology development,
analysis and use. The major objective of this paper, therefore, is to highlight
key methodological issues related to CCS cost estimates, including project
scope, terminology, calculation procedures, and the cost elements included or
excluded in CCS cost estimates. The paper also discusses the various measures
of CCS cost that are commonly sought and reported by organizations worldwide,
and identifies some of the critical (and sometimes controversial) assumptions
in such estimates. Also discussed are how (or whether) CCS costing methods
treat issues such as the level of technological maturity, the type and vintage
of facility treated (e.g., new vs. retrofitted power plant), and technological
change over time (learning). Issues related to bias, uncertainty and
variability in assumptions and underlying data also are discussed and
suggestions for a path forward are presented.
Cost Measures and Metrics
A variety of measures are used in the literature to report the overall cost of
CO2 capture and storage systems and other CO2 reduction measures [2]. The most
common include the:
• Cost of CO2 avoided
• Cost of CO2 captured
• Cost of CO2 reduced (or abated)
• Increased cost of electricity
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