Turn to the nation's most objective and informative daily environmental news resource to learn how the United States and key players around the world are responding to the environmental...
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 economically.”
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 coal.
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 said.
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 viable.
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:
• redirect funding that is going toward CCS demonstration projects to research and development,
• impose costs, such as a carbon tax, on electricity users whose generation releases greenhouse gases,
• experiment with different types of subsidies that would provide more incentive for private-sector investments in CCS, and
• reduce 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.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)