A review of cost estimates for Carbon Capture and Storage in the power sector, ICSC/317
Carbon capture and storage frequently features heavily in lowest-cost decarbonisation pathways for society, and has received growing attention as ‘net zero’ carbon emissions become a widespread policy goal. At the same time, the technology has been hindered by the perception of high costs at the plant level, particularly in the power sector, where wind and solar power offer much more competitive costs on a levelised cost of electricity (LCOE) basis. In recent years, there has been a trend towards developing new cost metrics which better represent the characteristics of different generation sources in a viable electricity grid, thereby highlighting the need for dispatchable power plants to complement intermittent renewable sources. Using such metrics, including levelised avoided cost of electricity (LACE) and value-adjusted LCOE (VALCOE), a more accurate determination of the value to grid decarbonisation of gas- or coal-fired power plant equipped with carbon capture and storage (CCS) can be obtained. However, for highly decarbonised or net zero scenarios, a more rigorous assessment is offered by a total system cost analysis, in which a grid model determines total costs under operational reliability constraints. This analysis highlights that the value of CCS in reducing total grid decarbonisation costs can only become apparent at high levels of renewable penetration (80–90%), at which point, the absence of the technology can result in exponential cost escalation.