Not on track
With only two large-scale CCUS power projects in operation at the end of 2018 and a combined capture capacity of 2.4 million tonnes of CO2 (MtCO2) per year, CCUS in power remains well off track to reach the 2030 SDS level of 350 MtCO2 per year. As CCUS applied to power is at an early stage of commercialisation, securing investments will require complementary and targeted policy measures such as tax credits or grant funding. Support for innovation needs to target cost reductions and broaden the portfolio of CCUS technologies.
Large-scale CO2 capture projects in power generation
SDS Existing capacity Development pipeline
2023 2.4 2.4
Despite growing recognition that CCUS is an important part of the portfolio of emissions mitigation technologies, its deployment in power remains off track.
However, recent technology innovations and policy developments provide encouraging signs for the future of CCUS in power generation.
The Petra Nova project in Texas has been operating successfully since 2017. The retrofit project is the largest post-combustion carbon capture system installed on a coal-fired power plant. It can capture up to 1.4 MtCO2 annually for use in enhanced oil recovery (EOR), which uses injected CO2 to extract oil that is otherwise not recoverable.
CCUS projects in the power sector
Source: Based on Global CCS Institute’s CO2RE database, accessed 22 May 2019
Petra Nova and the Boundary Dam CCUS project in Saskatchewan, Canada, which started operations in 2014, are providing critical experience to induce future cost reductions.
A recent feasibility study by the operators of the Boundary Dam project suggest that a second-generation capture facility could be built with 65% lower capital costs, at an overall cost of USD 45/tonne of CO2 and a CO2 capture rate of more than 90%.
According to the Global CCS Institute’s CO2RE database, nine CCUS power generation projects are currently in early development: four in China, two in Korea, one in each of the United Kingdom, Ireland and the Netherlands.
In addition, in 2018 the Oil and Gas Climate Initiative announced a partnership with several of its member companies to undertake a Front-End Engineering and Design (FEED) study on a gas-fired power plants in the United Kingdom.
The two large-scale power CCUS projects operational today and the nine projects in early development have a potential combined capture capacity of 18 MtCO2 per year. However, the capture and storage rate and the number of projects receiving final investment decisions would need to increase substantially to meet the 2030 Sustainable Development Scenario (SDS) level of 350 MtCO2 captured annually from power generation.
Reducing the energy penalty (and hence the cost of CO2 capture) is a key innovation goal; the anticipated cost reductions for future installations, owing to experience gained from the first two large-scale CCUS power projects, hold promise.
The two large-scale CCUS power projects operating today are retrofits, and being able to cost-competitively retrofit existing plants will be critical given the young age of the coal fleet and the ongoing construction of unabated coal units in several parts of the world, particularly Asia. Retrofitting these plants with CCUS could therefore address both economic and emissions challenges, allowing plants to be operated while recovering investments and reducing their carbon footprint.
Several other technological innovations have been proposed to reduce CCUS costs and are now being tested at pilot scale.
NET Power’s 50‑MW clean energy plant in Texas is one prominent example. This first-of-its-kind natural gas-fired power plant employs Allam cycle technology, which aims to use CO2 as a working fluid in an oxyfuel, supercritical CO2 power cycle. The NET Power demonstration project started operations in 2018. It could make zero-emissions coal- and natural gas-fired power generation competitive with existing power generation technologies.
In other capture technology, the Fuel Cell Energy company aims to capture CO2 using a system of molten carbonate fuel cells. The system capturing CO2 from the flue gas stream of a host plant would also generate electricity, thereby circumventing the parasitic load cost associated with traditional carbon capture on power plants.
Combining bioenergy with CCUS is also important for its potential to deliver negative emissions, offsetting emissions in harder-to-abate sectors. Drax’s bioenergy CCUS pilot project in the United Kingdom is a world-first demonstration capturing CO2 from a power plant fuelled by 100% biomass feedstock. The pilot commenced operations in early 2019, and if successful it could become the world’s first negative-emissions power station.
Many countries are increasing their support for CCUS development and deployment, including Canada, China, Japan, the Netherlands, Norway, Saudi Arabia, the United Kingdom and the United States.
The United States introduced significant CCUS investment stimulus in 2018 with legislation to expand and enhance its 45Q tax credit. It will provide up to USD 50 per tonne of CO2 permanently stored and USD 35 per tonne of CO2 used for EOR or other industrial uses, provided emissions reductions can be clearly demonstrated.
The IEA estimates that the enhanced 45Q stimulus could trigger new capital investments of USD 1 billion for CCUS over the next six years, for an additional 10 MtCO2 to 30 MtCO2 of capture capacity.
Targeted policy measures to boost early investment
A constant flow of projects – development through operation – is crucial to raise CCUS capacity globally and induce significant cost reductions. As with other low-carbon technologies, securing investment in CCUS, especially during the early phase of commercialisation, will depend on policy support.
Although a carbon price or tax can provide an important long-term investment signal, boosting early investment will require complementary and targeted policy measures.
A range of policy options, including regulatory levers, market-based frameworks and measures such as tax credits, grant funding, feed-in tariffs and CCUS obligations and certificates, could all support power applications of CCUS, depending on national circumstances and preferences.
New business models to reduce costs
Shifting from building stand-alone CCUS facilities with dedicated transport and storage infrastructure to instead developing multi-user hub and cluster facilities to serve industrial and power plants could significantly raise efficiencies and reduce costs.
Exploiting options for CO2 use could also provide a revenue stream for CCUS facilities in the power sector, although this is likely to be limited to EOR (CO2-EOR) in the near term because the amount of CO2 captured from power facilities heavily outweighs other currently available CO2 usage opportunities.
Innovation, in combination with targeted policy measures for deployment, is crucially needed to stimulate CCUS development and bring it into line with the SDS.
Innovation for CCUS in power generation needs to target cost reductions, improve the efficiency of CO2 capture, and expand the portfolio of available CCUS technologies. Approaches like supercritical CO2 power cycles have gained public attention recently for their potential of lowering cost and high capture rates.
CCUS applied to gas-fired power generation at scale
Applying CCUS to gas-fired power plants can substantially reduce the emissions of the gas-fired fleet. While there are no large-scale CCUS projects at gas-fired plants in operation today, the SDS envisions 35 GW by 2030.
Demonstrating supercritical CO2 power cycles at scale
Supercritical CO2 power cycles (sCO2) in principle allow for, in addition to higher plant efficiencies compared with conventional pulverised coal plants, lower pollutant emissions, higher power density (which could reduce capex) and easier CO2 capture. In some cases they could also allow for reduced water consumption. Plant sizes, which can vary from 1 MWe to 600 MWe, could be adjusted to specific electricity demand requirements.
Reduce the energy penalty and cost of CCUS capture
Reducing the energy penalty of capture plants will reduce the cost of capture technology, one of the main barriers to widespread CCUS deployment today.
As the theoretical separation energy for capture is generally very low compared to the requirements of today's typical systems, in particular for post-combustion plants, opportunities for significant cost reductions exist.
- IEA CCC (International Energy Agency Clean Coal Centre) (2019), Technology readiness of advanced coal-based power systems, , https://www.iea-coal.org/technology-readiness-of-advanced-coal-based-power-generation-systems-ccc-292/.
- IEAGHG (IEA Greenhouse Gas R&D Programme) (2015), "Oxy-combustion turbine power plants", , https://ieaghg.org/docs/General_Docs/Reports/2015-05.pdf.
- IEAGHG (2014), "CO2 capture at coal based power and hydrogen plants", , https://ieaghg.org/docs/General_Docs/Reports/2014-03.pdf.
Keith Burnard (IEAGHG), Andrew Minchener (IEA Clean Coal Centre), Hans-Wilhelm Schiffer (World Energy Council), John Scowcroft (Global CCS Institute)