Electricity from fossil fuels without CO2 emissions: Assessing the costs of carbon dioxide capture and sequestration in U.S. electricity markets

Abstract

The decoupling of fossil-fueled electricity production from atmospheric CO2 emissions via CO2 capture and sequestration (CCS) is increasingly regarded as an important means of mitigating climate change at a reasonable cost. Engineering analyses of CO2 mitigation typically compare the cost of electricity for a base generation technology to that for a similar plant with CO2 capture and then compute the carbon emissions mitigated per unit of cost. It can be hard to interpret mitigation cost estimates from this plant-level approach when a consistent base technology cannot be identified. In addition, neither engineering analyses nor general equilibrium models can capture the economics of plant dispatch. A realistic assessment of the costs of carbon sequestration as an emissions abatement strategy in the electric sector therefore requires a systems-level analysis. We discuss various frameworks for computing mitigation costs and introduce a simplified model of electric sector planning. Results from a “bottom-up” engineering-economic analysis for a representative U.S. North American Electric Reliability Council (NERC) region illustrate how the penetration of CCS technologies and the dispatch of generating units vary with the price of carbon emissions and thereby determine the relationship between mitigation cost and emissions reduction. © 2001 Air and Waste Management Association.