Cost Analysis of Carbon Capture and Sequestration from U.S. Natural Gas-Fired Power Plants

Abstract

Despite increasing efforts to decarbonize the power sector, the utilization of natural gas-fired power plants is anticipated to continue. This study models existing solvent-based carbon capture technologies on natural gas-fired power plants, using site-specific emissions and regionally defined cost parameters to calculate the cost of CO2 avoided for two scenarios: delivery to and injection within reliable sequestration sites, and delivery and injection for the purpose of CO2-enhanced oil recovery (EOR). Despite the application of credits from the existing federal tax code 45Q, a minimum incentive gap of roughly $38/tCO2 remains for the geologic sequestration of CO2 and $56/tCO2 for CO2-EOR (before consideration of revenue generated from delivered CO2 contracts). At full escalation of 45Q, delivered CO2 costs from this sector for geologic sequestration could reach as low as $22/tCO2. However, given the capital investment required in the near-term, it would be beneficial if the credit provided the greatest economic benefit early on and decreasing over time as deployment continues to ramp up. Additionally, due to the high qualifying limit of 45Q for the power sector, e.g., 500 ktCO2/yr, the tax credit incentivizes the capture of roughly 397 MtCO2/yr at a 90% capture efficiency or 75% of the emissions in this sector, with missed opportunities equating to roughly 118 MtCO2. Advancing the scale of carbon capture and sequestration (CCS) will require both technological advances in the capture technology, cost reductions through the leveraging of existing infrastructure, and increased policy incentives in terms of cost along with the reduction of qualifying limits.

A review of technologies for carbon capture, sequestration, and utilization: Cost, capacity, and technology readiness

“…Edwards and Celia estimated the cost of new pipeline construction as $118 000 per inch‐mile (inch pipe diameter, mile pipe length), which is consistent with the industry's rule of thumb of $100 000 per inch‐mile, according to the authors 129 . The cost of pipeline transport at constant capacity increases linearly with distance, but nonlinearly with capacity 130 . While large‐scale transport of CO 2 is expected to be primarily dominated by pipeline transport, 25 for capacities less than 500 ktCO 2 year –1 trucking becomes cost‐competitive, and for capacities less than 200–300 ktCO 2 year –1 trucking is expected to be the more economical transport mode 130,131 .…”

“…The cost of pipeline transport at constant capacity increases linearly with distance, but nonlinearly with capacity 130 . While large‐scale transport of CO 2 is expected to be primarily dominated by pipeline transport, 25 for capacities less than 500 ktCO 2 year –1 trucking becomes cost‐competitive, and for capacities less than 200–300 ktCO 2 year –1 trucking is expected to be the more economical transport mode 130,131 . Also, marine transport using ships is expected to be more economical than having coast‐to‐coast pipelines, and it may be used for importing CO 2 for geological sequestration in the United States 35…”

Carbon capture and storage at the end of a lost decade

“…Additional challenges occur in the form of the cost and the associated legislations and liabilities of CCS. [78][79][80][81] Studies have made efforts to calculate the potential costs of the technology [81][82][83][84] and, while this is no easy task based on variability across different industries, it shows that the capture phase is generally the most costly when compared with transport and storage. 81 Similarly, start-up costs for initial projects are usually extremely high as these bear the brunt of supplying the transport and storage mechanisms, of which subsequent projects can then take advantage.…”

The Cost of CO2 Transport and Storage in Global Integrated Assessment Modeling

“…Many of these studies were focused on bottom-up cost analyses for ship transport schemes in Europe, particularly given ongoing projects that are actively injecting CO 2 for permanent storage in the North Sea. Several studies explored truck and rail transport (Sanchez et al, 2018;Psarras et al, 2020). Rail and truck transport typically involve small volumes of CO 2 .…”

“…CO 2 can be transported via train or truck and may be economic over short distances and small CO 2 quantities (Sanchez et al, 2018;Psarras et al, 2020). While rail and truck transport may be important for small-scale transport in the early years of CCS expansion, it is not expected to play a major role in large-scale rollout of CCS.…”