February 27, 2017 Read More →

On the Blogs: Alternate Facts From the Carbon Capture-and-Storage Industry

From Renew Economy:

Supporters of carbon capture and storage (CCS) plants on coal power stations are audaciously seeking to sell the story they are cheaper than renewables – despite overwhelming evidence to the contrary.

An example of this genre of CCS spin was published early last week in the Australian Financial Review (AFR) which reported (paywall) that, according Julio Friedmann from the US Department of Energy, coal plants fitted with carbon capture and storage are one-third the cost of rooftop solar.

According to the AFR, Friedmann “cited findings from Lazard that put the levelised cost of energy … at US8¢-US12¢ [per kilowatt hour] for a new coal-fired plant fitted with CCS.”

“That easily beat rooftop solar at US18¢-30¢/kWh, offshore wind at US15¢ and nuclear at US10¢-18¢, although it fell short of utility-scale solar at US5¢,” wrote the AFR’s Angela MacDonald-Smith.

(Lazard, a global financial advisory firm, calculates the Levelised Coat of Energy (LCOE) as a way of comparing the costs of energy from different generation sources.)

In tune with the lead paragraph the article was headlined “Carbon capture far undercuts rooftop solar: expert”.

Coal wins hands down – or does it?

So, ignoring the fact that according to Friedmann utility scale solar is already cheaper than new coal, Lazard’s data suggests coal with CCS is the way to go for carbon dioxide abatement, right?

Not so fast.

Firstly, Lazard’s data refers only to costs in the US so, while of interest, has limited direct relevance to decisions elsewhere in the world.

Via Twitter Friedmann confirmed the data he was referring to was from Lazard’s Levelized Cost of Energy Analysis 10.0, which was published in December 2016, plus additional data from the US Department of Energy and his own analysis.

So what exactly were Lazard’s estimates for unsubsidised new power generation?

For an Integrated Gasification Combined Cycle (IGCC) plant with 90 per carbon and capture Lazard estimated (p. 13) it came in at US21¢ kWh. Importantly, the cost of transport and storage is not included in this cost estimate. (An IGCC plant, such as the almost-commissioned Kemper plant with CCS in Mississippi, gasifies coal which is then burnt in a gas-fired turbine.)

For a conventional coal plant with 90% carbon capture, Lazard estimated it would cost 14.3¢/kWh excluding the costs of transport and storage.

So Lazard’s range for CCS plants was at least US14.3¢/kWh to US21¢ kWh plus the cost of transport and storage.

What about those solar estimates?

For the utility scale projects Lazard estimated the range between US4.6¢ kWh to 6.1¢ kWh, with only marginal differences between the panel types.

So what about onshore wind, which is growing rapidly in the US but strangely went without mention in the AFR article?

Lazard put the cost at between just US3.2¢ kWh and 6.2¢ kWh.

So there it is: according to Lazard’s analysis onshore wind and utility solar come in at over a half to one-third the cost of an coal plant with CCS. Compared to coal plants with CCS, wind and utility scale solar wins hands down.

Even rooftop solar at the bottom of the cost range came in slightly cheaper than conventional coal with CCS. The most expensive rooftop solar came in only marginally more expensive than an IGCC plant with CCS.

Spinning carbon capture and storage as cheaper than renewables

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