This paper reviews and compares the prevailing methods, metrics and assumptions that underlie current cost estimates for CO2 capture and storage (CCS) technologies applied to fossil fuel power plants. This assessment reveals a number of significant differences and inconsistencies across different studies, not only in key technical, economic and financial assumptions related to the cost of a CCS project, but also in the methods and elements of cost that are included in a particular analysis. Such differences often are not readily apparent in the cost results that are reported publicly. As a consequence, there is likely to be some degree of confusion, misunderstanding, and mis-representation of CCS cost information, especially among audiences not familiar with the details of CCS costing methods. Given the current state of CCS technology, more careful attention to the analysis and reporting of cost uncertainties and variability also is especially important. A path forward is suggested to improve the consistency and transparency of CCS cost estimates.

Introduction and Objectives

Carbon capture and storage (CCS) is a potentially critical technology for mitigating global climate change, but its current cost is a major barrier to applications at power plants and other large industrial sources of CO2. Efforts are underway to develop new lower-cost technologies, especially for CO2 capture—the costliest component of a CCS system [1]. Given its importance, information on CCS costs is sought by a broad range of actors and organizations for investment decisions, technology assessments, R&D activities, policy analysis, and energy and environmental policy-making (including legislation and regulations involving CCS).

Yet, as this paper will show, there are significant differences and inconsistencies in the way that CCS costs are currently calculated and reported by various authors and organizations involved in CCS technology development, analysis and use. The major objective of this paper, therefore, is to highlight key methodological issues related to CCS cost estimates, including project scope, terminology, calculation procedures, and the cost elements included or excluded in CCS cost estimates. The paper also discusses the various measures of CCS cost that are commonly sought and reported by organizations worldwide, and identifies some of the critical (and sometimes controversial) assumptions in such estimates. Also discussed are how (or whether) CCS costing methods treat issues such as the level of technological maturity, the type and vintage of facility treated (e.g., new vs. retrofitted power plant), and technological change over time (learning). Issues related to bias, uncertainty and variability in assumptions and underlying data also are discussed and suggestions for a path forward are presented.

Cost Measures and Metrics

A variety of measures are used in the literature to report the overall cost of CO2 capture and storage systems and other CO2 reduction measures [2]. The most common include the:

  • Cost of CO2 avoided

  • Cost of CO2 captured

  • Cost of CO2 reduced (or abated)

  • Increased cost of electricity

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