Strategic priorities and cost considerations for decarbonizing electricity generation using CCS and nuclear energy

Abstract

This paper investigates the economics of deploying carbon capture and storage (CCS) on gas-fired power plants while covering its entire value chain, i.e., carbon capture, transport, and storage, and conducting a thorough sensitivity scenario analysis. Our analysis shows that adopting CCS translates into a CO 2 capture cost ranging from approximately 86 to 130 $/ton for both newly built and retrofit plants, depending on the natural gas prices. Accounting for the transport and storage segment will result in an additional ∼24 $/ton to the overall cost of carbon management. It was also found that, even after several years of commissioning, a gas plant can be retrofitted with CCS economically from a carbon abatement cost perspective. Finally, from a purely levelized cost viewpoint, and compared with natural gas power plants, nuclear energy emerges as the more cost-effective option if the natural gas price exceeds the threshold of ∼4 $/MMBtu. Other strategic and operational aspects of natural gas and nuclear generation that impact their deployment, beyond the finances, are also discussed and contrasted. The research and its findings offer valuable insights for policymakers to make informed decisions about deploying CCS in different scenarios. These scenarios include varying domestic fuel prices, choosing between base load and peaking power plants, and considering retrofitting versus greenfield options. Finally, the comparison of CCS gas fired power plants with nuclear generation provides policy insight to aid policymakers make better decisions between these two popular dispatchable technologies to reach net-zero emissions in power sector. • Carbon capture can increase electricity generation costs by 70–100 %. • High carbon tax of 100+ $/ton will be needed to make carbon capture attractive. • Costs of carbon transport and storage are not significant. • Plant retrofitting is cost-effective if 15 years or more of useful life is available.