A new study by The Brattle Group has assessed the cost-effectiveness of carbon capture and sequestration (CCS) for utilities to help meet decarbonisation goals, highlighting potential growth for the technology.
Released earlier this week, the study showed some opportunities in retrofit coal-fired power plants with CCS at low net costs. The report also highlighted that, in the future, the economics of CCS are likely to become more favourable as the value of emission-free dispatchable energy grows.
“Utilities should shift their perspective of CCS as a ‘retrofit technology’ to a technology that is a valuable option in a long-range solution set to reduce costs and improve the reliability of achieving a very clean grid,” said Kasparas Spokas, Brattle Associate and Study Co-Author.
Until recently, the development of CCS has progressed slowly, due to the more favourable economics of other clean generation technologies, as well as uncertainty about public policies for decarbonisation.
However, the recent expansion of US federal tax credits (45Q), which provide $35 or $50 per tonnes of emissions sequestered depending on the storage location, combined with the possibility for enhanced oil recovery revenues in some locations, has created a new incentive for CCS.
Brattle’s analysis finds that the amount and timing of when CCS becomes cost-effective will depend on the renewable resources in the power system’s region, opportunities to sell or sequester CO2, the cost of alternative technologies, and the degree of decarbonisation desired.