Research Economics and Costs

Project: Economic Evaluation of Leading Technology Options for Sequestration of Carbon Dioxide

Research Team: Jeremy David and Howard Herzog

Year: 2000

Abstract:
The greatest contribution to greenhouse gas emissions is the burning of fossil fuels, which releases nearly six billion tons of carbon per year into the atmosphere. These fuels will continue to be used well into the 21st century, although there is a urgent need to manage a sustainable economic development. Since power plants are the largest point sources of CO2 emissions, capturing the carbon dioxide at power plants and sequestering it has been suggested. This approach would be complementary to the current strategies that aim at reducing greenhouse gas emissions by improving the energy efficiency and by increasing the use of non-fossil energy resources. However, a major barrier to CO2 capture and sequestration is its cost.

This thesis presents the results of a detailed analysis of costs associated with today's technology for CO2 separation and capture at three types of power plants: Integrated Gasification Combined Cycles (IGCC), coal-fired simple cycles (Pulverized Coal, PC), and natural gas-fired combined cycles (Natural Gas Combined Cycles, NGCC). The analysis is based on studies from the literature that are reviewed and adjusted to a common economic basis. A composite cost model is then developed, and a sensitivity analysis performed to identify the cost-drivers of the capture. Finally, the economics at the three types of power plants are predicted for a 10-year horizon, and the competitiveness of CO2 separation technologies under a specific policy scenario are discussed.

Publications:
David, J. and H. Herzog, "The Cost of Carbon Capture," Proceedings of 5th International Conference on Greenhouse Gas Control Technologies (GHGT-5), Cairns, Australia, D.J. Williams, R.A. Durie, P. McMullan, C.A.J. Paulson and A.Y. Smith (eds.), CSIRO, pp 985-990, (2001). <PDF>

David, J., "Economic Evaluation of Leading Technology Options for Sequestration of Carbon Dioxide," M.I.T. Masters Thesis, June (2000). <PDF>