Research and Development
Carbon Capture and Storage from RD&D to Commercialization
Global warming is an omnipresent topic in the media. Capturing CO2 from industrial plants and pressing it underground (Carbon Capture and Storage, CCS) is a way to reduce global emissions. This paper will introduce the most important economic challenges of CCS today and how they are targeted in 2017. Research is focused on improving the capture process, finding new technologies and stating the overall economic benefits of implementing CCS. Demonstration and Development has proceeded in 2017, but significantly lost momentum since 2010. Commercialization of CCS is challenged by financing capital and operational costs and will always need a protective policy to be an economically viable option. Because CCS is the only means to deeply reduce CO2 emissions of fossil fuel power plants and highly emitting industrial sectors, it should be considered as an important asset in the climate change mitigation portfolio.
One of the most discussed topics, next to Donald Trump’s latest tweets, and also one of the most urging topics is climate change. The Intergovernmental Panel on Climate Change (IPCC) published their 5th Assessment Report in 2014 and stated that global warming should be kept below 2°C to limit problematic consequences of climate change. One year after this, the global community agreed in Paris to keep global warming well below 2°C. There are several measures that can be thought of to accomplish this – renewable energies, reducing individual consumption or higher efficiency of CO2 emitting applications. In fact, a diversified portfolio of climate change mitigation strategies is needed. A controversially discussed option of this portfolio is Carbon Capture, Transportation and Storage (CCS). 
CCS describes the value chain of capturing CO2 from large emitters, transporting it to a suitable geological location and injecting it deep under the earth’s crust. It is the only way to significantly reduce the emissions of fossil fuel power plants and industrial applications like steel plants or cement factories. Furthermore, if biomass is used for energy production and the arising CO2 is captured (BECCS), even negative emissions are possible. 
Since Norway’s Statoil started the first large-scale carbon storage project (Sleipner) in 1996, CCS has seen fluctuating political and financial support. Until 2009 there was a growing interest in this topic with promised capital of $30bn – but the failed climate conference in Copenhagen (2009) and the world economy crisis took out much of this momentum. While the International Energy Agency (IEA) talked about 100 completed CCS projects in 2020, indeed there were 20 advanced large-scale CCS projects cancelled until 2016.
The IPCC expects a cost increase for climate change mitigation of 138% until 2050 if CCS is not widely deployed. The IEA sees CCS as an important factor of their 2°C Scenario (2DS), as they take it into account for 12% of all needed emission reductions compared to a business-as-usual scenario with a temperature rise of 6°C until 2050. Despite these strong arguments, CCS faces a slow development and several economic, technological and societal challenges. 
This paper will introduce the most important economic challenges of CCS today and how they are targeted in 2017. The structure follows the innovation path of a novel technology: from Research over Development and Demonstration to Commercialization.
Research and Development
Research is the act of finding a solution to a certain problem and developing a working small-scale prototype . Since capturing the CO2 makes up for 80% of all costs of the entire value chain, research is directed to improve the process and to find new technologies . The most expensive part of CO2 capture is regenerating the solvent in which the CO2 is dissolved. Therefore, research is working to find 2nd and 3rd generation solvents to reduce the operating costs of the carbon capture process. One example is the Carbon Clean Solutions CRMAXTM proprietary solvent – it reduces operational costs by 30% compared to conventional capture technologies . Another way to reduce especially the high energy efficiency penalty of coal fired power plants with CCS is searching for unconventional technologies . For example, a recently proposed power generation system (supercritical water gasification) could have an efficiency of 38% compared to 30% for the now used system with post-combustion .
Especially for a technology like CCS, which is expensive, but seen as crucial to mitigate climate change, it is important to examine the overall benefits against the costs. In late 2017, the study “How Carbon Capture will boost the UK Economy” was published by the UK East Coast CCS network . It evaluates the economic and societal benefits associated with the deployment of CCS. The study focuses on investments into a CCS network on the east coast of the UK, concentrating on industrial applications of CCS like steel plants rather than implementing CCS in power plants (only 20%). The authors compare the economic consequences of three different scenarios: a prompt start of CCS projects in the respective industries, a start with a 10-year delay and an elimination of efforts to develop CCS. The last scenario implicates that emitted CO2 must be shipped to foreign countries so that the UK can reach its climate goals (3rd country solution).The authors assess the cumulated value of these investments from 2020 to 2060 against the capital and operation costs, which is illustrated in Fig. 3.
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Figure 3 Benefits vs. costs of CCS implementation at the East Coast of the UK, adapted from 
While the costs for the full value chain of CCS is expected to be £34bn or £24 per ton CO2 avoided, the calculated societal and economic benefits will reach £163bn which results in a positive difference of £129bn. They are composed of the price of avoided emissions and the increase in Gross Value Added (GVA) due to economic effects like new jobs, production orders and inward investments. Furthermore, according to the data for the economic value of co-benefits, benefits such as health and well-being are linked to avoided CO2-emissions. The fourth benefit of a positive impact on the Balance of Trade assumes that the UK will be able to export CCS expertise in form of goods and services. A profitable service for example would be to import and store CO2 from foreign countries. In comparison to immediate action towards CCS implementation, a late start reduces the GVA to £33bn and the 3rd country solution would even cost £107bn until 2060 or £88 per ton CO2 avoided. 
This study is conducted by the East Coast CCS network and therefore might be biased towards positive results. For example, risks in terms of storage site CO2 leakage or groundwater acidification are not monetarized. However, the approach to take societal benefits into account when evaluating CCS investments is important. Further research could try to reproduce these results for the UK and other countries, which could lead to more political trust in CCS and faster implementation.
Promising research results and developed prototypes need confirmation by full-scale demonstration projects . The lessons learned from learning-by-doing are important to lower costs of future projects. In early 2018, there are 37 large-scale CCS projects being planned, constructed or already in operation . As an example, Boundary Dam was the first large-scale, coal fired power plant with post-combustion carbon capture (the CO2 is captured after combustion). The retrofitted power plant now produces 120 MW of energy and captures 1million tonnes of CO2 per year, which is 90% of all arising CO2 and equals almost 220.000 cars taken off the road. By using the knowledge gained during construction, the owner claims to be able to reduce capital costs by 30%. An equally high cost reduction is predicted by the owner of the second and bigger coal power plant with retrofitted CCS: Petra Nova in Texas went into operation in early 2017 and captures an amount of 1,4million tons of CO2 per year. Since power generation with coal is responsible for 30% of all energy-related CO2 emissions globally, the two successful projects picture milestones of demonstrating the capture technology. However, to be within the 2DS of the IEA, 94.000 million tons of CO2 would have to be captured until 2050. To achieve this, a wide deployment of large-scale CCS projects is necessary. 
Next to the large-scale CCS projects, 85 small-scale pilot and demonstration projects are located around the world. Only 15 of those are currently in construction or in an advanced development phase. One of them is planned to go online in early 2018 in the U.S. to prove promises of a new power generation technology: the Allam Cycle. The first-of-a-kind natural-gas-fired power plant uses CO2 as working fluid instead of steam to turn the turbines. This technology inherently produces pipeline-ready CO2 and eliminates concerns about other emissions. The owner, NET Power, predicts a near 100% CO2 capture while reducing the capital costs to those of a gas fired power station without carbon capture. 
- Quote paper
- Peter Hinßen (Author), 2018, The Commercialization of Carbon Capture and Storage (CCS). Economic and Technological Challenges, Munich, GRIN Verlag, https://www.grin.com/document/500094