Global warming is an omnipresent topic in the media. Capturing CO2 from industrial plants and pressing it underground (Carbon Capture and Storage, CCS) is a way to reduce global emissions. This paper will introduce the most important economic challenges of CCS today and how they are targeted in 2017. Research is focused on improving the capture process, finding new technologies and stating the overall economic benefits of implementing CCS. Demonstration and Development have proceeded in 2017 but significantly lost momentum since 2010. Commercialization of CCS is challenged by financing capital and operational costs and will always need a protective policy to be an economically viable option. Because CCS is the only means to deeply reduce CO2 emissions of fossil fuel power plants and highly emitting industrial sectors, it should be considered as an important asset in the climate change mitigation portfolio.
One of the most discussed topics and also one of the most urging topics is climate change. The Intergovernmental Panel on Climate Change (IPCC) published their 5th Assessment Report in 2014 and stated that global warming should be kept below 2°C to limit problematic consequences of climate change. One year after this, the global community agreed in Paris to keep global warming well below 2°C. There are several measures that can be thought of to accomplish this – renewable energies, reducing individual consumption or higher efficiency of CO2 emitting applications. In fact, a diversified portfolio of climate change mitigation strategies is needed. A controversially discussed option of this portfolio is Carbon Capture, Transportation and Storage (CCS).
Table of Contents
1. Introduction
2. Research and Development
3. Demonstration
4. Commercialization
5. Conclusion
Objectives and Topics
This paper examines the economic challenges associated with Carbon Capture and Storage (CCS) technology and explores the factors influencing its deployment within the current global climate mitigation framework as of 2017. The primary objective is to analyze the viability of CCS by following its innovation path from early research and development through demonstration projects to full-scale commercialization, while considering policy and market incentives.
- Economic challenges of CCS implementation
- Innovation pathway: Research, Development, Demonstration, and Commercialization
- Market pull factors, including electricity markets and enhanced oil recovery
- Governmental technology push mechanisms and subsidies
- The impact of carbon pricing and policy on CCS viability
Excerpt from the Book
Research and Development
Research is the act of finding a solution to a certain problem and developing a working small-scale prototype [2]. Since capturing the CO2 makes up for 80% of all costs of the entire value chain, research is directed to improve the process and to find new technologies [4]. The most expensive part of CO2 capture is regenerating the solvent in which the CO2 is dissolved. Therefore, research is working to find 2nd and 3rd generation solvents to reduce the operating costs of the carbon capture process. One example is the Carbon Clean Solutions CRMAXTM proprietary solvent – it reduces operational costs by 30% compared to conventional capture technologies [5]. Another way to reduce especially the high energy efficiency penalty of coal fired power plants with CCS is searching for unconventional technologies [5]. For example, a recently proposed power generation system (supercritical water gasification) could have an efficiency of 38% compared to 30% for the now used system with post-combustion [6].
Especially for a technology like CCS, which is expensive, but seen as crucial to mitigate climate change, it is important to examine the overall benefits against the costs. In late 2017, the study “How Carbon Capture will boost the UK Economy” was published by the UK East Coast CCS network [7]. It evaluates the economic and societal benefits associated with the deployment of CCS. The study focuses on investments into a CCS network on the east coast of the UK, concentrating on industrial applications of CCS like steel plants rather than implementing CCS in power plants (only 20%). The authors compare the economic consequences of three different scenarios: a prompt start of CCS projects in the respective industries, a start with a 10-year delay and an elimination of efforts to develop CCS. The last scenario implicates that emitted CO2 must be shipped to foreign countries so that the UK can reach its climate goals (3rd country solution). The authors assess the cumulated value of these investments from 2020 to 2060 against the capital and operation costs, which is illustrated in Fig. 3.
Summary of Chapters
Introduction: Provides an overview of the global warming challenge and introduces Carbon Capture and Storage (CCS) as a vital technology for reducing emissions in heavy industry and power generation.
Research and Development: Focuses on technical innovations to lower capture costs, such as advanced solvents, and discusses economic benefit assessments for CCS infrastructure.
Demonstration: Analyzes the transition from small-scale prototypes to large-scale demonstration projects, using examples like Boundary Dam and Petra Nova to illustrate progress and scale-up challenges.
Commercialization: Evaluates the financial landscape of CCS, focusing on market pull factors, government subsidies, and the crucial role of carbon policy and pricing mechanisms.
Conclusion: Synthesizes the importance of CCS in the climate mitigation portfolio and emphasizes the urgency of technological deployment to meet global emission targets.
Keywords
Carbon Capture and Storage, CCS, Global Warming, Climate Change, CO2 Mitigation, Research and Development, Demonstration Projects, Commercialization, Carbon Pricing, EU-ETS, Technology Push, Market Pull, Fossil Fuels, Emission Reduction, Economic Viability
Frequently Asked Questions
What is the core subject of this paper?
The paper focuses on the economic challenges and the innovation trajectory of Carbon Capture and Storage (CCS) technology, exploring how it can be scaled and utilized to mitigate climate change.
What are the central thematic fields addressed?
The work covers the entire technology chain, starting from technical research to demonstration projects and finally the financial and policy-based requirements for commercial success.
What is the primary objective of this study?
The main objective is to identify the economic hurdles CCS faces and how they are currently being addressed in 2017 through technology improvements, market mechanisms, and policy support.
Which scientific methodology is applied?
The author applies a structured analysis of the innovation path, reviewing industry reports, case studies, and economic evaluations to assess the current status and future potential of CCS.
What topics are covered in the main section?
The main part systematically breaks down the CCS lifecycle, specifically detailing R&D efforts, the role of demonstration projects in learning-by-doing, and the essential financial incentives needed for commercial viability.
What keywords characterize the study?
Key terms include Carbon Capture and Storage, climate mitigation, CO2 capture, carbon pricing, technological innovation, and economic feasibility.
How does the "Allam Cycle" contribute to CCS technology?
The Allam Cycle represents a new power generation technology that uses CO2 as a working fluid, inherently producing pipeline-ready carbon and aiming for near 100% capture efficiency.
What is the significance of the "Technology Push" for CCS?
Technology Push refers to government interventions like subsidies, tax credits, and loan guarantees, which the author argues are necessary to bridge the gap between high initial costs and commercial feasibility.
How does the EU-ETS influence the economic model of CCS?
The EU Emissions Trading System (EU-ETS) is intended to place a price on carbon, thereby incentivizing low-carbon investments, although the paper notes it has historically faced challenges due to fluctuating prices.
What does the "3rd country solution" imply for the UK?
It describes a scenario where a country fails to implement its own CCS infrastructure and is instead forced to export its captured CO2 emissions to foreign nations to meet international climate goals.
- Quote paper
- Peter Hinßen (Author), 2018, The Commercialization of Carbon Capture and Storage (CCS). Economic and Technological Challenges, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/500094
