CCS in trouble without significant subsidies, report claims

• 12 years ago (2012-05-11)
• Junior Isles

North America 1021 Nuclear 659

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New coal-fired power plants with carbon capture and storage (CCS) technology are unlikely to be built in the US without federal subsidies –even with the new environmental regulations that support the technology, a Bloomberg Government report says.

New source performance standard (NSPS) regulations proposed by the US Environmental Protection Agency (EPA) last month all but rule out coal-fired generation without CCS. Coal plants currently emit almost double the level allowed under the proposed standard, according to the report.

It was hoped this would open a gateway to CCS technology as a way to build new coal plants that could comply with the regulations, but the economics of the technology make this unlikely, the analysis claims.

CCS currently adds 50 per cent to the costs of coal-fired generation and is about twice as expensive as natural gas fired generation, according to the US Energy Information Administration (EIA).

Rob Barnett, a Washington, DC-based energy analyst with Bloomberg Government says CCS is “… a technology that’s just way out of the money… I think the hurdle goes beyond basic [research and development]. There’s only so much you can do to improve the cost and technology profile. Right now, the technology is so out of the money, it would require more support than demonstration and early pilot projects.”

Robert Engelman, president of the Worldwatch Institute, said that CCS’s problems are global and that more needs to be done if it is to realise its potential.

“A technology capable of permanently sequestering large amounts of carbon will be expensive, and so far the world’s markets and governments haven’t assigned much value to carbon or to the prevention of human-caused climate change. Ultimately, that will be needed for real progress in CCS development and implementation,” he said.

Currently, only eight CCS projects are operational, with no new projects since 2009, and a further seven are under construction. The Global CCS Institute says the most common reason for projects being cancelled or put on hold is that they are uneconomical.

“Gas is king right now,” Barnett notes. “It’s bad news for CCS. It also makes it more difficult to do other clean energy options such as renewables and nuclear.”