5.2 Application of CCS to power generation

For the application of CCS in power generation in the United States, a decrease in fuel costs was seen across all of the coal fired technologies, related to the lower coal costs that emerged in 2010. The reduction in the length of the pipeline relative to the 2009 study reduced the contribution of transport cost to the overall cost of CCS to the power generation applications.

5.2.1 Levelised cost of electricity

For the reference cases, taking into account currently available technologies, the lowest LCOE was for oxyfuel combustion at US$114/MWh, in contrast to 2009 where LCOE for NGCC technologies was the lowest at US$112/MWh. Consistent with the findings in 2009, the LCOE for PC supercritical and IGCC technologies were the greatest at US$131/MWh and US$125/MWh respectively.

An update to the oxyfuel combustion process with CCS was the inclusion of an additional purification process when capturing the CO2. This resulted in an increase in the capital contribution of oxyfuel combustion with CCS to the LCOE. The effects of the ranges in the coal and natural gas prices were variations in the LCOE of US$10/MWh and US$30/MWh respectively. This reflects the potential greater volatility of natural gas prices.

For a supercritical PC with CCS technology, for a fixed fuel cost, the sensitivity of the CO2 capture installed capital costs and LCOE to the labour costs was reduced. The installed capital costs increased by 23 per cent (32 per cent in 2009), while the LCOE increased by 11 per cent (21 per cent in 2009). A similar trend would be observed for the other coal-fired technologies as they tend to be relatively labour-intensive installations.

5.2.2 Cost of CO2 avoided

For both FOAK and NOAK plants, the cost of CO2 avoided for the application of CCS across all power generation technologies decreased since 2009. There are various factors that resulted in this, including that most of the coal prices are lower than those modelled in the 2009 study, and that the CO2 transport distance for the reference case was reduced from 250km to 100km, reducing the transport costs and its contribution to the overall cost of CCS;

5.2.3 Regional observations

In India, the installed CO2 capture equipment cost and LCOE increased across all technologies. This was due to the revised consideration of a 30 per cent increase in equipment being imported into the country as well as India's typical coal heating value being very low, resulting in a greater capital cost.

The increase in costs for the coal fired technologies in Eastern Europe was primarily due to an increase in labor conversion factor from the reference location and switching to a low rank coal. Similarly, the capital cost in the euroregion increased related to a change to a low rank coal.

A higher coal price was utilised for Australia in this study, which resulted in a 20 per cent increase in the country's technology cost.

The costs in Brazil increased significantly, partially because of a lower labour rate being used in 2009. The revision of the coal type to one with a lower heating value also led to a higher capital cost. Further, additional costs associated with importing capital equipment contributed to the increase in CO2 capture costs in Brazil.

Only NGCC costs were presented for Saudi Arabia, reflecting that there are no coal-fired power generation applications in the region.

5.2.4 CO2 credit value breakpoint

The CO2 credit value, on a $/tonne of CO2 emitted basis that drives the economics of CCS in favour of a CCS system over that without CCS is known as the CO2 value breakpoint. Once the breakpoint is exceeded, it becomes more economically favourable to operate the system with CCS.

The CO2 credit value breakpoint for oxyfuel decreased from US$60/tonne of CO2 in 2009 to US$55/tonne, which can be attributed to the lower coal costs offsetting the additional purification step included in this study. This analysis continues to indicate that oxyfuel still has the lowest CO2 credit value breakpoint of approximately US$55/tonne of CO2.

For IGCC, the CO2 breakpoint with respect to supercritical PC technology PC technology has decreased from $80/tonne in 2009 to $70/tonne of CO2. This reflects the increase since 2009 in the LCOE and cost of CO2 avoided and captured for IGCC with CCS.

The cost breakpoint for the supercritical technologies is approximately $80/tonne of CO2, an 11 per cent decrease from the 2009 breakpoint of $90/tonne of CO2.

Finally, the high breakpoint for NGCC technology has remained relatively unchanged at $112/tonne of CO2, reflective of the lower CO2 emission intensity of natural gas and higher cycle efficiency compared to coal-fired technologies.