Carbon Capture and Storage

T he greatest challenge to carbon capture and storage (CCS) is likely to be economic rather than technical. A September 2008 McKinsey report estimated that the first commercial scale CCS projects, potentially to be built soon after 2020, would cost €35-50 per metric ton of CO2 abated. They assume that if 500+ projects were built by 2030, the cost might fall to €25-40 per ton. About two-thirds of that cost is for CO2 capture. It is interesting to consider those costs on a global scale. A study by Pacala and Socolow implies that we need to cut a cumulative 25 Gton of CO2 over the next 50 years just to cap the CO2 concentration in the atmosphere at a modest 500 ppm (we are now at 390 ppm). If all of our solutions cost €25 per ton, the economic impact would be €625 billion ($833 billion) over the next 50 years. Reducing CO2 is a global issue, but the US creates 20% of the problem. It also offers an interesting case study on the difficulty of finding practical solutions in a challenging political and economic environment. Hopefully along the way the reader will discover opportunities as well as pitfalls to avoid. According to the US Department of Energy’s Energy Information Administration (DOE-EIA), 98% of America’s human-generated CO2 comes from energy use, with 40% of that from electricity (coal and natural gas) and 33% from transportation (mostly petroleum). Coal produces 45% of America’s electricity and natural gas produces 23% (see Figure 1). McKinsey’s study notes that ‘Retrofitting of existing power plants is likely to be more expensive than new installations, and economically feasible only for relatively new plants (with high efficiencies).’ But according to the DOE-EIA, over the past 20 years coal contributed only 3.7% of total added US capacity while natural gas accounted for 88%. Few modern, efficient US coal plants have been added in the past 20 years. ‘Efficiency’ is a term used to define the conversion of the theoretical energy content of a fuel into electricity. The McKinsey report notes that the energy required for the CCS CO2 capture process increases the amount of coal that must be burned per MW-hour delivered, and estimates a CCS ‘efficiency penalty’ of 10%. This means that if a future coal plant could be built to achieve a 50% thermal efficiency, CCS would decrease that efficiency to 40%. Such a plant would be burning 50/40=1.25 times as much coal per MW-hour. And burning 25% more coal would also increase harmful emissions since CCS captures only about 90% of CO2 and none of the other pollutants. CCS also faces storage challenges, such as site selection, CO2 transportation costs, pipeline and CCS site permits, and uncertainties in monitoring CO2 sequestration. Leakage of just 0.5% per year would result in a loss of 64% of CO2 to the atmosphere over 200 years. What company wants to expose itself to superfund-type legal and financial exposure with a time horizon that extends out a century or more? But the biggest challenge in the US may be the low efficiency levels of the installed base of coal-fired plants. While the World Coal Association argues that new technology coal plants can achieve 45% efficiency, DOE/ EIA data show that existing US coal plants only operate at an average efficiency of 33.5%. A 10% efficiency penalty would lower that efficiency to 23.5% and decrease the electricity output by almost 30%. Given the capital investment