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McKinsey Report Concludes CCS Could Be Economic at New Power Plants by 2030

29 September 2008

Mckinseycs1
While many CCS component technologies are relatively mature, to date there are no fully integrated, commercial-scale CCS projects in operation. Click to enlarge. Source: McKinsey

Carbon capture and storage (CCS) at new power plants could become economic by 2030, according to a new report by management consultancy McKinsey & Co. The report, which focuses on the European power generation market, projects CCS costs in the reference case scenario down to around €30-45 (US$43-65) per tonne of CO2 abated by then—costs which are in line with expected carbon prices in that period.

Early CCS demonstration projects will have a significantly higher cost of €60-90 per tonne, according to the report. Early full commercial-scale CCS projects—potentially to be built soon after 2020—are estimated to cost €35-50/tonne CO2 abated.

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Global cost curve of GHG abatement opportunities beyond business as usual. Click to enlarge. Source: Vattenfall

A 2007 analysis published by Vattenfall (earlier post) estimated the global potential for CCS abatement at 3.6 Gt/year, with 0.4 Gt/year in Europe—about 20% of the European abatement potential in 2030.

A 0.4 Gt CO2 abatement by 2030 would require the installation of between 80 and 120 commercial-scale CCS projects, the McKinsey report says. These are likely to develop as a set of capture clusters, comprising new power plants and adjacent retrofit and industrial capture projects, all connected into a common transport and storage network.

Storage remains a key area where uncertainty needs to be resolved, the report says, to understand the possibility and cost of developing CCS clusters in specific regions within Europe.

The timing of the roll-out of CCS would have a major impact on the level of abatement achieved by 2030. If the first commercial projects do not start until well after the demonstration phase, of if projects are delayed due to difficulties with permits or other uncertainties, CCS could struggle to reach large scale in 2030. To achieve that, the first commercial projects would have to be started shortly after the demonstration phase or a fast roll-out programme would be needed.

...The implication is that early attention must be given to the prerequisites for commercial roll-out beyond the first 10-15 projects—including cluster development, infrastructure networks, permits, industry preparations, and possible business models and commercial approaches to the next stage of development.

—McKinsey 2008

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Capture clusters are a possible scenario. Click to enlarge. Source: McKinsey

Cost differences between the three main capture technologies—oxyfuel-combustion; post-combustion; and pre-combustion—are relatively small at this point. McKinsey suggests that multiple technologies should be tested at this early stage of development. Retrofitting is likely to be more expensive than new installations, and economically feasible only for relatively new, highly efficient plants.

The reference case costs are especially sensitive to deviations form the assumed risk of capital and the capital investments required for CCS. In addition, actual costs are likely to vary significantly between individual projects, depending on their scale, their location, and the technologies being tested. For a demonstration project, for instance, a transportation distance 200 km longer than the reference case would add $10/tonne CO2.

—McKinsey 2008

The report identifies four key barriers to the development of CCS: public safety and support questions; lack of a specific legal framework; funding for demonstration projects; and development of commercial and risk allocation models.

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September 29, 2008 in Carbon Capture and Storage (CCS), Europe, Power Generation | Permalink | Comments (12) | TrackBack (0)

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CCS is not 100% CO2 captured. It is at best capturing 80% of the CO2 at costs that far exceed that of wind power that is 100% CO2 neutral and in addition does not use any water resources and does not cause any particle pollution.

All talk about >clean coal< is utter nonsense on par with >healthy smoking< as recently mentioned by Al Gore.

Some of the existing coal power plants could be converted to multi-fuel power plants that burn trash, biomass or natural gas to provide intermittency services. The remaining plants should be closed and replaced with wind power.

A ton of coal will generate about 2000 kWh of electricity and have between 2.5 and 3 tons of CO2 associated with it. Given the range of costs listed in the article: $43 to $75 to capture and store the CO2 the cost of elect will increase by somewhere between 5.4 cents at the low end and 11.25 cents at the high end.
Add to this the cost to generate the electricity; six cents or so.
Does it not seem like something is wrong with this picture...given the progress in commercializing SOFCs...or other RE alternatives?

Henrik:

One could say the same (or worse) about clean ICE vehicles. All we have done is to reduce CO2 by half from 300g/Km to barely 150g/Km for the average mid-size car.

Both sources contribute 35+% each of all GHG emissions and should be addressed vigourously.

Technologies already exist to progressively reduce GHG from both sources before irrevocable damage is done.

Unfortunately, not much will be done before it hurts a lot more (like the current financial crisis).

This study finds that the cheapest carbon-free source of additional generating capacity is nuclear, some $20 less per tonne of CO2 emission avoided than for CCS. Other studies including the US' DOE find even larger advantages for nuclear, $45 or more per tonne of CO2 emission avoided.

I think Big Coal and their captive politicians may have welcomed this report as a lifeline and an excuse to relax. However I'd ask whether the physical parameters (parasitic losses, volume) have yet to be proved on a large scale, whether there will be much easily mined coal left by 2030 and who will pay such high prices for coal derived energy.

As annual coal consumption is increasing 6.5% if I recall it seems like a kind of a race between permanent energy shortages and climate disaster. By delaying the move away from coal these reports make the problem harder.

I, like many others, spoke ideally about an immediate move to solar and renewable energy to solve our problems with fossil fuel reliance. After much reading and thoughts, I find we must be realistic about changing over to clean energy. The first thing is our politicians must start listening to our scientists and not be bought out by lobbyists with their campaign contributions and favors. This should lead them to the next step, a national energy policy. The policy must address plans to transition to clean energy, reduce CO2 and clearly define and support clean transportation.

Give my a effing break! These shmucks claim to know whats economical 20 years from now!!!

In 22 years birds might start barking. You can't predict what's going to happen that far in the future. All this is is a statement that they're stalling.

They'll just keep polluting until a clean powersource is economical enough to replace coal. It's not the coal companies fault that there's been a lack of effective leadership and high-level cooperation on the renewable energy front. Vote, volunteer, and be vocal.

PS Nukes are just changing one problem for another, potentially worse one. It's time for something new, because if the old idea worked like it was supposed to we'd be doing it already.

Henrik,

I'm with 'Lad' - I'd expect and hope CCS will mitigate the CO2 impact of the developing world's urgent bid to 'catch up' whilst also changing to low 'total cost' lifestyles.

There is a possibility that at times we will end up burning some form of bio fuel - e.g. when the instantaneous wind based power supply is insufficient. Combining Bio-Fuel based electrical generation with CCS (would be inefficient but...) could result in a negative CO2 power supply even at 80% capture.

The option to capture and re-release CO2 at a future date may contribute to the climate moderating technology we will need to develope anyway.

Technically I understand we are already living in an ice age - we just happen to be at the end of a brief (14000 year!) interglacial period.

"...could become economic by 2030.."

As I read it, they are not predicting but projecting trends and what may be necessary to allow a higher probability of this happening. That is very different from a prediction.

I have to chuckle as I play devil's advocate here....

If something like this becomes profitable, we could end up with a reverse problem. Too much CO2 sequestering from the air, plants start to die from a lack of CO2, our planet starts to cool, ice age begins, farm lands dissappear, mass starvations and wars for food...

Maybe global warming is the lesser of two evils?

I am just sayin... (>:

Personally I am more worried about real pollution from coal fired power plants, much less so about something the trees in my yard need to survive.

So the public are being encouraged to support css with funding for r&d.

No one says it is likely to be effective, but we can keep the power on full throttle for a bit longer , make a dollar on the side , avoid the development of renewables and supporig infrastructure (too hard) and best of all, when the s**** hits the fan, the public will see it as their failure, the polliticians will have moved on.
Some might even be still waiting for EESTOR.

Sounds like a plan.

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