Uncertainties in relation to CO

This paper has been presented at an expert meeting on CO2 capture technology learning at the IEA headquarters, January 24th 2003. The electricity sector is a key source of CO2 emissions and a strong increase of emissions is forecast in a business-as-usual scenario. A range of strategies have been proposed to reduce these emissions. This paper focuses on one of the promising strategies, CO2 capture and storage. The future role of CO2 capture in the electricity sector has been assessed, using the Energy Technology Perspectives model. Technology data have been collected and reviewed in cooperation with the IEA Greenhouse Gas R&D implementing agreement and other expert groups. CO2 capture and sequestration is based on relatively new technology. Therefore its characteristics and its future role in the energy system is subject to uncertainties, as for any new technology. The analysis suggests that the choice of a reference electricity production technology and the characteristics of the CO2 storage option constitute the two main uncertainties, apart from a large number of other factors of lesser importance. Based on the choices made cost estimates can range from less than zero USD for coal fired power plants to more than 150 USD per ton of CO2 for gas fired power plants. The results suggest that learning effects are important, but they do not affect the CO2 capture costs significantly, other uncertainties dominate the cost estimates. The ETP model analysis, where choices are based on the ideal market hypothesis and rational price based decision making, suggest up to 18% of total global electricity production will be equipped with CO2 capture by 2040, in case of a penalty of 50 US$ per ton of CO2. However this high penetration is only achieved in case coal fired IGCC-SOFC power plants are developed successfully. Without such technology only a limited amount of CO2 is captured from gas fired power plants. Higher penalties may result in a higher share of CO2 capture and sequestration. While CO2 capture technology will be important for the future role of coal, the model results suggest that the future role of natural gas is not affected significantly. Model results indicate only limited competition between CO2 capture and renewables. Both CO2 mitigation strategies show a significant growth in case of the 50 USD/t CO2 penalty. In conclusion it is recommended to develop CO2 capture and sequestration technology, to reduce remaining uncertainties regarding the permanence of CO2 storage, and to reduce the costs of this strategy through advanced power plant designs. In a next step, this model will be further developed with CO2 capture in industry and in other parts of the energy sector. A report on CO2 capture and sequestration, building on the work that is described in this paper, is planned for the fall of 2003.