4.5 Cost of CO2 avoided

The cost of CO2 avoided reflects the cost of reducing CO2 emissions to the atmosphere while producing the same amount of product from a reference plant. The cost of CO2 avoided is expressed as a $/tonne of CO2 not emitted with respect to the reference process. As illustrated in Figure 4-2, a facility with CO2 capture generates additional CO2 per unit of product with respect to a reference plant due to the lower plant efficiency related to the increased auxiliary power required to run the CO2 capture process. In the CO2 capture case, the emissions are reduced through the capture of CO2. However, with respect to CO2 emissions in the reference case, emissions reduction is less than that in the capture case.

Figure 4-2 Illustration of CO2 avoided for a hypothetical power generation plant

The cost of CO2 avoided is determined by combining the difference in the levelised costs with and without CCS, with the decrease in emissions in the reference case.

The reference plant used for determining the cost of CO2 avoided has an impact when comparing values from different technologies. Two prominent approaches to selecting the reference plant include:

  1. Reference plant set to similar technology without CCS
  2. Reference plant set to low cost alternative for all options

The DOE/NETL Bituminous Baseline (2007) and IPCC Carbon Dioxide Capture and Storage Special Report (2005) select the first approach of using similar technology without CCS as the reference cases for the determining cost of CO2 avoided. The reasoning provided by the IPCC for this approach is that it “provides a consistent basis for reporting the incremental cost of CO2 capture for a particular type of facility”. This approach, of using a similar technology without CCS as the reference, is valid as long as the cost of CO2 avoided is used for assessing a particular type of facility. For comparing different technologies, as was performed in this study, the second approach of the reference plant set to the low cost alternative without CCS, is most suitable since the technologies are compared to a single reference point.