4th CCS Cost Network Meeting

Publication Overview

The purpose of the workshop is to share and discuss the most currently available information on the cost of carbon capture and storage (CCS) in electric utility and other industrial applications, as well as the current outlook for future CCS costs and deployment. The workshop also seeks to identify key issues or topics related to CCS costs that merit further discussion and study.

Publication Summary

Session 1: Framing the Issue

This presentation reviewed the methodology that goes into generating a baseline technology cost estimate for the “next commercial offering.” The seven key steps are: 1. Develop a technology analysis plan and solicit feedback from stakeholders. 2. Create a performance model of each power plant based on NETL process models. 3. Integrate carbon capture technology models based on literature and developer input. 4. Adjust balance of plant as needed per the new technology demands. 5. Estimate the capital, operating and maintenance cost of all plant components using the method described in NETL’s QGESS documents and elaborated in the Baseline studies. 6. Apply plant financing and utilization assumptions to develop a cost of electricity. 7. Perform sensitivity analyses and provide R&D guidance.

Session 2: Project Costs – Some key messages were: · It was emphasised that adequate support is needed to demonstrate CCS and reduce costs from FOAK to NOAK to deliver a competitive and viable technology in a decarbonised world. · For FOAK plants, capital grants (to support build) and OPEX support (to ensure the plant operates) are required, plus other temporary measure (e.g. CCS certificates) if the uptake rate continues to be disappointing. · Non‐financial measures (enabling regulations, liability agreements etc) are also important. · The main requirement for NOAK plants is expected to be a robust CO₂ price.

Session 3: Project Costs – Power Applications: Power purchase agreement signed · Final permits were issued for air, water, pipeline and CO₂ storage · Subsurface rights were acquired and CO₂ liability management was addressed · Mega‐FEED was completed (70‐90% of final design, at a cost of $90 million) · Project labor agreements were signed.
Session 4: CCS in the Context of Changing Electricity Markets

The presentation from Andy Boston captured the lessons from an ERP analysis of future United Kingdom electricity systems, and highlighted three key messages: · A zero‐ or very low‐carbon electricity system with variable renewables (e.g., solar, wind) needs dispatchable, low‐ carbon technologies to provide firm capacity · Policy makers and system operators need to value services that ensure grid stability to establish a market for new providers · A holistic approach that accounts for the cost of balancing the system would better recognize the importance of firm low carbon technologies than conventional measures of individual technology cost