« Previous | Contents | Next »
Listen
7| Economic modelling of potential CCS schemes in Scotland
Economic modelling of possible CCS projects in Scotland was carried out to compare costs with conventional non- CCS power stations. The CCS schemes were compared to each other and the 'without CCS' alternatives to estimate the level of subsidy that would be required to make CCS projects economic.
Five sample schemes were selected for study as shown in Table 13. They are based on key CO 2 sources from the power stations at Longannet and Peterhead combined with network and storage options selected from the options presented earlier in this study.
Table 13
CCS schemes selected for economic analysis.
No. | Driver Source | Non- CCS Technology | CCS Technology | Storage Hub | Primary transport required |
|---|
1 | Longannet | 2.4 GW supercritical coal | 2.4 GW supercritical coal with post combustion capture | Brae | Forth hub (vicinity of Longannet) to Brae with alternatives of new and existing (Miller) pipeline |
2 | Longannet | 2.4 GW supercritical coal | 2.4 GW supercritical coal with post combustion capture | Gannet | Forth hub to Gannet with new pipeline |
3 | Peterhead | 1.2 GWCCGT* | 1.2 GWCCGT with post combustion capture | Brae | N.E Scotland hub (vicinity of Peterhead and St Fergus) to Brae via existing Miller pipeline |
4 | Longannet | 2.4 GW supercritical coal | 2.4 GW supercritical coal with post combustion capture | Gannet | Import of CO 2 from N.E. England hub (vicinity of Blythe/Lynemouth) connected into Scottish Network using new pipelines |
5 | Peterhead | 1.2 GWCCGT* | 1.2 GWCCGT with post combustion capture | Captain | N.E Scotland hub to Captain using new pipeline |
CCGT*, Combined Cycle Gas Turbine
GW, Gigawatt
Table 14 shows these schemes ranked by cost of abatement (in £/t CO 2). Each project was compared with its non- CCS alternative, shown in Table 13, to calculate the subsidy (in terms of £/t CO 2 captured) required to give returns similar to those of the non- CCS alternative. On a lifetime annual basis 'required' subsidies range between £93 M per year for Scheme 5 to £132 M for Scheme 4. The required subsidy (in £/t CO 2) is roughly equal to the abatement cost minus the assumed market price of CO 2 in 2020.
Table 14
Source to storage schemes ranked by cost of abatement (in £/t CO 2).
Scheme no. | Scheme | Abatement cost (£/t CO 2) | Required subsidy (£ M/year) | Required subsidy(£/t CO 2 captured) | Electricity cost (£/M Wh) |
|---|
2 | Longannet supercritical coal to Gannet hub | 37 | 98 | 7 | 65 |
|---|
1 | Longannet supercritical coal to Brae hub | 39 | 117 | 9 | 66 |
|---|
4 | Longannet supercritical coal to Gannet hub with imported CO 2 | 40 | 132 | 10 | 67 |
|---|
5 | Peterhead CCGT to Captain hub without full network | 64 | 93 | 30 | 65 |
|---|
3 | Peterhead CCGT to Brae hub | 70 | 111 | 36 | 67 |
|---|
The cost over the lifetime of the energy generating system (levelised cost) of Scheme 3 and Scheme 2 was compared to that of conventional coal- and gas-fired generation (Figure 19). Calculations of the required subsidy assumes a rate of return of between 9% to 11%. This shows that despite the difference in abatement cost, gas-and coal-fired CCS schemes have very similar levelised costs (Figure 19 and Table 13). However, although the amount of financial support for gas-fired CCS projects is similar to that required to support coal-fired CCS, the tonnage of CO 2 abated is much higher in a coal scheme.
Figure 19
Breakdown of levelised costs in 2020.
Sensitivities on the assumptions - The high degree of uncertainty in elements of cost and the performance of CCS plant in the economic modelling exercise flows through to the estimates of the cost of electricity generation of CCS Coal and CCS Gas schemes in quite a different way (Figure 20). For example, factors which have a strong impact on the power station element of the levelised costs of the schemes such as a reduced load factor (50% instead of 85%), higher discount rates and a higher CAPEX will have a disproportionate effect on the economics of CCS Coal because of the greater weight of the power station costs in CCS Coal. Conversely, assumptions that have a strong impact on fuel costs such as sensitivities to commodity prices will have a stronger effect on the economics of CCS Gas.
Figure 20
Comparison of the impact of sensitivities on power generation by CCS Coal and CCS Gas.
Impact of CO 2- EOR on results - CO 2- EOR may have the ability to lower the overall subsidy required and provide an additional incentive for development of CCS. It may add value to Scotland's hydrocarbon reserves by prolonging the life of oil fields, delaying their closure and postpone decommissioning costs.
Modelling of CCS Schemes - key conclusions
- The underlying economics of energy projects drive power industry development.
- The levelised costs (in £/M Wh) of CCS Gas and CCS Coal are similar.
- CCS schemes are likely to be significantly more expensive than standard conventional Combined Cycle Gas Turbine and pulverised coal plant.
- Uncertainty in the costs and performances of CCS schemes can considerably affect assessment of the relative merits of coal- and gas-fired schemes.
- High or low future commodity prices will determine whether costs for CCS will be competitive with non CCS power generation.
- Although the costs of CCS schemes are similar, CCS coal-fired power generation abates more CO 2 than CCS gas.
« Previous | Contents | Next »