In this chapter, we address two of the key questions about any CO2 mitigation technology: 'How much will it cost?' and 'How do CCS technologies fit into a portfolio of greenhouse gas mitigation options?' There are no simple answers to these questions. Costs for CCS technologies depend on many factors: fuel prices, the cost of capital, and costs for meeting potential regulatory requirements like monitoring, to just name a few. Add to this the uncertainties associated with technology development, the resource base for storage potential, the regulatory environment, etc., and it becomes obvious why there are many answers to what appear to be simple questions.

This chapter starts (in Section 8.2) by looking at the costs of the system components, namely capture and compression, transport, and storage (including monitoring costs and byproduct credits from operations such as EOR). The commercial operations associated with each of these components provide a basis for the assessment of current costs. Although it involves greater uncertainty, an assessment is also included of how these costs will change in the future. The chapter then reviews the findings from economic modelling (Section 8.3). These models take component costs at various levels of aggregation and then model how the costs change with time and how CCS technologies compete with other CO2 mitigation options given a variety of economic and policy assumptions. The chapter concludes with an examination of the economic implications of different storage times (Section 8.4) and a summary of the known knowledge gaps (Section 8.5).

8.2 Component costs

This section presents cost summaries for the three key components of a CCS system, namely capture (including compression), transport, and storage. Sections 8.2.1-8.2.3 summarize the results from Chapters 3-7. Readers are referred to those chapters for more details of component costs. Results are presented here in the form most convenient for each section. Transport costs are given in US$/tCO2 per kilometre, while storage costs are stated in US$/tCO2 stored. Capture costs for different types of power plants are represented as an increase in the electricity generation cost (US$ MWh-1). A discussion of how one integrates the costs of capture, transport and storage for a particular system into a single value is presented in Section 8.2.4.

8.2.1 Capture and compression1

For most large sources of CO2 (e.g., power plants), the cost of capturing CO2 is the largest component of overall CCS costs. In this report, capture costs include the cost of compressing the CO2 to a pressure suitable for pipeline transport (typically about 14 MPa). However, the cost of any additional booster compressors that may be needed is included in the cost of transport and/or storage.

The total cost of CO2 capture includes the additional capital requirements, plus added operating and maintenance costs incurred for any particular application. For current technologies, a substantial portion of the overall cost is due to the energy requirements for capture and compression. As elaborated in Chapter 3, a large number of technical and economic factors related to the design and operation of both the CO2 capture system, and the power plant or industrial process to which it is applied, influence the overall cost of capture. For this reason, the reported costs of CO2 capture vary widely, even for similar applications.

Table 8.1 summarizes the CO2 capture costs reported in Chapter 3 for baseload operations of new fossil fuel power plants (in the size range of 300-800 MW) employing current commercial technology. The most widely studied systems are new power plants based on coal combustion or gasification. For costs associated with retrofitting existing power plants, see Table 3.8. For a modern (high-efficiency) coal-burning power plant, CO2 capture using an amine-based scrubber increases the cost of electricity generation (COE) by approximately 40 to 70 per cent while reducing CO2 emissions per kilowatt-hour (kWh) by about 85%. The same CO2 capture technology applied to a new natural gas combined cycle (NGCC) plant increases the COE by approximately 40 to 70 per cent. For a new coal-based plant employing an integrated gasification combined cycle (IGCC) system, a similar reduction in CO2 using current technology (in this case, a water gas shift reactor followed by a physical absorption system) increases the COE by 20 to 55%. The lower incremental cost for IGCC systems is due in large part to the lower gas volumes and lower energy requirements for CO2 capture relative to combustion-based systems. It should be noted that the absence of industrial experience with large-scale capture of CO2 in the electricity sector means that these numbers are subject to uncertainties, as is explained in Section 3.7.

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