CO₂ Capture as a Factor in Power Station Investment Decisions

Technical Report

1 May 2006

Philip Napier-Moore, Pete Lilley, Guy Doyle

Citation: IEAGHG, "CO₂ Capture as a Factor in Power Station Investment Decisions", 2006-08, May 2006

Publication Overview

There is increasing interest in capture and storage of CO₂ from fossil fuel fired power stations, to mitigate climate change. The IEA Greenhouse Gas R&D Programme (IEA GHG) has recently carried out studies to assess the performance and costs of various types of power station incorporating CO₂ capture. IEA GHG has commissioned Mott MacDonald to pull together the results from these studies on a consistent basis and review features of the technologies which may be important for plant investors. The opinions of a range of potential investors were surveyed and the results of the survey were combined with the technology evaluations using a multi-criteria analysis, to show how far each technology matches the surveyed investor preferences.

Publication Summary

Coal fired power plants with CO₂ capture are predicted to have lower generation costs than gas fired plants with capture. This conclusion is based on Mott MacDonald’s predicted average fuel prices over the next 20 years, which are broadly similar to current prices. However, it is recognised that there is a significant degree of uncertainty in future energy prices and the level of technology risk is considered to be higher for coal fired plants.
Based on recent IEA GHG studies on new-build power plants, the optimum coal gasification combined cycle plant with CO₂ capture is estimated to have a lower generation cost than post combustion capture and oxy-combustion plants. None of these technologies has been fully demonstrated and the actual costs will depend on the accuracy of the cost estimates, whether the technologies perform as predicted, future technology improvements and various local factors.
A survey of power utilities and developers worldwide showed considerable interest in CO₂ capture technologies and in many cases the companies were actively investigating the possibility of plant development.
There is a sharp contrast evident in the survey results between the technologies that can currently best meet the different investors’ broad set of investment preferences for new thermal generation plant, and those technologies that they currently see as most needed within their operations. Natural gas CCGT plant incorporating pre-combustion capture is best able to meet investors’ preferences, but coal-fired plant with post-combustion capture is viewed as the “most needed” technology in the direct question responses.

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