Carbon capture and storage (CCS) is still too expensive to be commercially
viable, and federal efforts to reduce the cost have not yet been fruitful,
according to a report
released by the Congressional Budget Office June 28.
Congress has provided $6.9 billion in funding to the Energy Department since
2005 to develop and demonstrate the commercial potential of carbon capture and
storage, but the efforts have not brought the cost of the technology down
significantly enough to make it economically viable, according to the report,
Federal Efforts to Reduce the Cost of Capturing and Storing Carbon
Dioxide. CBO prepared the report at the request of the Senate Energy and
Natural Resources Committee.
CCS is the practice of trapping emissions from burning coal, compressing them
into a fluid, and storing it deep underground. The Obama administration said it
is on track to complete six CCS demonstration projects by 2016 and has said the
technology will be commercially viable within 10 years.
But making the technology economically viable would require a large
investment in installing carbon capture and storage systems at new or existing
power plants, and such an investment seems unlikely, CBO found.
“In the absence of a significant technological breakthrough, it seems clear
that a large amount of new CCS capacity … would be needed to reduce costs
substantially,” CBO said. “Such an investment seems unlikely in the foreseeable
future and it might not occur even if the technology became more competitive
Producing energy at coal-fired plants using carbon capture and storage
technology is estimated to cost about 75 percent more than producing electricity
at conventional coal-fired plants, CBO said.
Utilities would need to create more than 200 gigawatts of coal-fired
generating capacity with carbon capture and storage, or two-thirds of the total
current coal-powered generating capacity in the United States, to make
electricity cost only 35 percent more than electricity from traditional
The cost would drop as the technology became more widely available and
equipment manufacturers and construction companies gained experience
manufacturing and installing the systems.
But even if the cost declined, electricity generated from coal-fired plants
with CCS would not be competitive with electricity from traditional coal-fired
plants unless the federal government set policies restricting emissions or
putting a price on carbon, CBO found. Under current laws and policies, utilities
are unlikely to invest in carbon capture and storage for many decades, CBO
EPA proposed a rule in April that would set the first carbon dioxide
emissions limits on power plants. Existing coal-fired power plants would be able
to meet the proposed requirements by installing CCS equipment, according to EPA.
But the power industry has argued that the technology is not commercially
And even if the price of carbon capture and storage technologies drops,
coal-fired plants with CCS would still have to compete with nuclear power, wind,
biomass, other renewables, and natural gas, all of which produce little or zero
emissions, CBO said.
To make carbon capture more cost-competitive, CBO suggested that the
government could take the following actions:
funding that is going toward CCS demonstration projects to research and
costs, such as a carbon tax, on electricity users whose generation releases
with different types of subsidies that would provide more incentive for
private-sector investments in CCS, and
or eliminate future spending for CCS, leaving investment in carbon capture and
storage development mostly to countries like China and India, whose demands for
electricity are increasing at a faster rate than the U.S. demand.
By Avery Fellow
The CBO report, Federal Efforts to Reduce the Cost of Capturing and
Storing Carbon Dioxide, is available at http://1.usa.gov/QuMsHc.