(591h) The Role of Carbon Capture and Sequestration As a Resilient Technology in the UK’s Electricity System Decarbonisation: A Techno-Economic Analysis for Energy Policy Design

The role of carbon capture and sequestration as a resilient
technology in the UK’s electricity system decarbonisation: A techno-economic
analysis for energy policy design

Yoga W. Pratama^1,2, Niall Mac Dowell^1,2*

¹Centre
for Environmental Policy, Imperial College London, London, UK

²Centre
for Process Systems Engineering, Imperial College London, London, UK

*Corresponding author's
e-mail address: niall@imperial.ac.uk

Keywords:

technology role, carbon capture and sequestration, electricity
system decarbonisation, techno-economic analysis, energy policy

ABSTRACT

Deep decarbonisation of the energy
systems is critical to mitigating climate change. In accordance with this, The
UK has set ambitious and legally binding targets to reduce its greenhouse gas
(GHG) emissions to at least 80% lower than the 1990 baseline by 2050 [1-2].
Among other sectors, the electricity sector is expected to be deeply decarbonised
by the deadline. To meet these targets, carbon capture and sequestration (CCS) has
been acknowledged as an essential technology. However, the deployment of the
technology continues to be hindered owing to its perception as a “pre-commercial
technology” [3], misconception of its potential roles, and therefore lack of
political support. Notwithstanding this, the technology portfolio and
characteristics of future electricity system remain uncertain. Therefore, the potential
values[1]
and roles of energy technologies within the system might be affected.

Understanding the ranges of potential
values and roles of energy technologies are critical to designing a set of
strategic energy policies to cost-effectively drive the system to decarbonise. Accordingly,
this study aims to tackle the following questions: 1) What are the potential role
and value of CCS in the future electricity system? 2) What technology
improvements should CCS have to support its role in the future, 3) What is the
role of policy schemes needed to drive the system to decarbonise? To answer
those questions, we evaluated a wide range of optimal power system expansion trajectories
from the energy systems optimisation framework for system expansion considering
endogenous technology cost learning (ESO-XEL) [4]. A wide range of fuel prices,
technology costs, and thermal plants efficiencies, covering 126,000 scenarios
are included and the UK’s system is used as a case study. The impacts of
different carbon tax trajectories, i.e. the carbon price floor (CPF) in the UK
[5], and CCS deployment delays to the total system cost (TSC) and carbon
intensity (CI) are also evaluated.

This study finds that the CPF
imposed to the system doesn’t significantly increase the total system cost
(ranging around £ 300-500 billion) but can, to some extent, lower the range of the
system’s CIs in 2050 from 31-78 g/kWh to 12.5-54 g/kWh, from the low to high
CPF, respectively (Fig. 1a). The electricity system in the future is
characterised by the deployment of low carbon technologies which are relatively
new. Accordingly, imposing the high CPF to the system will promote more rapid
deployment of these technologies which, in turn, further the technology cost
reduction through technology learning. When the CI of the system has been
substantially reduced, however, the effectiveness of the CPF to advance the
system’s CI reduction drops (Fig. 1b). In the low carbon system with high
intermittent renewables sources (iRES) penetration, the system will rely on CCS
and imported electricity, which emit some residual emissions, to provide low-cost
balancing and ancillary services.  

Fig. 1. (a) TSC vs CI
of the system in various scenarios and (b) CI trajectories under different CPF
trajectories

CCS is a resilient technology which
can play a wide range of roles for the system, i.e. as low electricity producer
and/or balancing and ancillary services provider. Regardless the scenario, the
installed capacity of CCS in 2050 is around 14.25-15.00 GW. In contrast, due to
uncertainty in the future and a limited range of services iRES can provide,
i.e. electricity producer and some extent of inertia only, their level of
deployment may vary significantly among scenarios (Fig. 2a). in 2050,
wind-offshore capacity in average is 26.3 GW but can be as low as 0.5 GW and as
high as 42.6 GW. While for solar PV, the number can be between 31.3 GW and 45
GW. When iRES deployment is high, the primary role of CCS is to provide
balancing and ancillary services and the technology’s capacity factor tends to
be low (around 35.9%). On the other hand, if iRES deployment is lower (in a
case when the cost reduction is less progressive or when fossil fuel price is
low, etc.), CCS will generate more electricity and provide less reserve
capacity for the system (Fig. 2b). This unnecessarily because CCS can generate
electricity with a lower cost but is driven more by its ability to provide a
wider range of services for the grid in a lower overall “joint-product costs”
of all those services.

Fig. 2. The range of
(a) technology installed capacities (stacked) and (b) CCS' capacity factors
under various iRES generation levels in the central CPF scenario

Fig. 1 shows that although the
range of CIs the system with CCS can achieve in 2050 is very low, it still
doesn’t meet the Climate Change Act and the Paris Agreement (i.e. less than 10
g/kWh). In order to achieve net zero carbon by the deadline, CCS with greater
than 90% capture rate and negative emissions technology, i.e. BECCS, to
compensate the residual emissions are critical.  However, the present study
finds that carbon tax-typed mechanism such as the CPF is not suitable to
promote negative emissions technology. Therefore, policy schemes other than the
CPF, e.g. negative emissions credit, emissions portfolio standard, etc., are
necessary.

Owing to its unique role and
because the system becomes more diverse in the future, Fig. 3 shows that efficiency
improvement and capital cost reduction of CCS doesn’t merit its deployment
delay. Further renewables cost reduction, particularly wind turbines, can
substantially benefit the system economically, by reducing the total system
cost by 9.5% from £ 496-430 billion to £ 390-444 billion,  because their costs
are mainly composed of the capital cost. This effect is exaggerated by their
needs to be overcapacity to provide sizeable electricity generation for the
system. However, this economic benefit unnecessarily allows the system to 100%
rely on their generation. Without CCS, it will be uniquely costly for the
system, both economically and environmentally, because the balancing and
ancillary services required by the grid must be met by unabated plants which
already suffer from the CPF imposed – and yet, they remain a low-cost option to
provide the services (Fig. 3c).

Fig. 3. The impact of
(a) CCS plants efficiency improvement, (b) technology cost reduction, and CCS
deployment delay to the range of TSCs and CIs

To conclude our works, we find
that there is no silver bullet that can cost-effectively decarbonise the UK’s
electricity system. From the technology perspective, there is no unicorn
technology that can provide all services required by the grid to deeply
decarbonise the system. A wide range of technologies is needed to contribute
their unique roles to the system to achieve the target. Owing to those
different roles, a set of policy mechanisms to secure the availability of each
role is essential. For instance, the CPF is highly effective to promote cleaner
energy sources such as natural gas (switching from coal to unabated gas and to
abated gas in the lower CI system) and intermittent renewables. However, its
effectiveness diminishes along with the lower system’s CI. To advance the
system’s CI reduction, increasing the CPF dramatically may only increase the
total system cost whilst the range of CIs remains above the target. In this
stage, other schemes such as negative emissions credit and emissions portfolio
standard might be better suited. Finally, a set of policies that enables the
development of a robust electricity market, which can fairly remunerate the
whole range of services required by the grid, is critical to allow each
technology to play their role in the deeply decarbonised system.

REFERENCES

[1]
Climate Change Act 2008. https://www.legislation.gov.uk/ukpga/2008/27/pdfs/ukpga_20080027_en.pdf

[2]
Committee on Climate Change (CCC). The 2050 target – achieving an 80%
reduction including emissions from international aviation and shipping.
(2016).

[3]
Department for Business Energy and Industrial Strategy (BEIS). Clean growth:
The UK carbon capture usage and storage deployment pathway - An action plan.
(2018).

[4]
Heuberger, C.F. et al. Power capacity expansion planning considering endogenous
technology cost learning. Applied Energy 204 (2017) 831–845

[5]
Department for Business Energy and Industrial Strategy (BEIS). Updated
short-term traded carbon values used for UK public policy appraisal.
(2018).