Assessing the Economic Efficiency of CCS

To assess and classify the economic efficiency of measures in reducing CO2, the parameter ' CO2 avoidance costs' has become established. This parameter describes how high the costs of avoiding 1 ton of CO2 are in employing a process or measure. The CO2 avoidance costs are obtained from the difference of the specific manufacturing costs for a product, divided by the difference of the specific CO2 emissions:

where a: C02 avoidance costs c1: specific manufacturing costs for the product according to process 1 (e.g., plant with CCS)

c2: specific manufacturing costs for the product according to process 2 (e.g., conventional plant without CCS) e1: spec. CO2 emissions in the manufacture of the product according to process 1

e2: spec. CO2 emissions in the manufacture of the product according to process 2

For power stations, the specific power generation costs 'c' are stated in €/MWh or $/MWh, and the specific CO2 emissions 'e' in t CO2/MWh. Accordingly, the CO2 avoidance costs have the unit €/t CO2 and $/t CO2 resp.

Using the CO2 avoidance costs, we can express in a simple manner how cost-efficient a measure for lowering CO- is. It can be used not only for CCS, but, ultimately, for all technologies or processes. Using this parameter, it is possible, therefore, to compare various processes with one another in order to identify the least - cost CO2 reduction measure.

The CO2 avoidance costs also permit the costs ofCO2 certificates to be compared. If the CO2 avoidance costs are above the CO2 certificate costs, it costs less, from a purely commercial angle, to apply the (conventional) process 2 and to buy CO 2 certificates for the higher CO2 emissions. If, by contrast, the CO2 avoidance costs are below the costs of CO2 certificates, the CO2-lowering process 1 is also advantageous from a commercial angle. The problem in this view of things, however, is assessing future trade in CO2 certificates and the developments in certificate prices.

In applying this system, however, two points must be heeded. The CO2 avoidance costs are used to assess a process 1. To this end, the difference between it and a process 2 is established. Specifically, if various processes 1 are compared with one another, attention must be paid to an appropriate selection of the basic process or also of the basic processes 2. The conclusiveness and interpretation of the parameter 2 CO 2 avoidance costs 2 is very closely related to defining the basic process 2. Here, special care is needed.

The second point to be heeded is that the CO 2 avoidance costs do not express how much CO2 is really saved by a process. Hence, use of the parameter is mainly meant for processes that lead to minimal CO2 emissions, like CCS.

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