What carbon capture and storage seeks to do is to capture all the CO2 emitted by burning coal to generate electricity and then store it safely underground. But it turns out that it would significantly increase the cost of electricity generated by coal-fired power stations.
Capturing the CO2 from the exhaust of coal power plants requires energy in the form of steam and electricity. Because some energy is used for CO2 capture, CCS reduces a power plant’s electric power output and/or increases its fuel input. This creates an “energy penalty” for power plants that increases their operating costs. In addition, there is the large capital costs of building the CCS system.
Previous studies typically estimated that the fuel cost of coal power plants capturing 90% of their CO2 emissions would increase by about 30%-60%. However, data emerging from recent pilot or small-scale commercial CCS plants have consistently indicated that in reality the energy penalty and fuel costs are much higher. So why the discrepancy?
Our research, which was funded by the US National Science Foundation, showed that the fuel costs of coal-fired power plants can increase by up to 136% with the addition of a CO2 capture plant. That is, the fuel costs, which dictate the marginal cost of electricity generation (and consequently profits) for a power plant, would more than double in a CCS future.
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The percentage cost of fuel as part of the total cost of coal-powered electricity varies a lot depending on the age of the power station (is it fully depreciated? Does it need lots of maintenance because it's old and worn out?) to the contracts the power station has with coal suppliers (some power stations are next to coal fields, so transport costs are minimal, some have specially low contract prices). For new coal power stations in Australia, the cost of the fuel as a percent of total cost is over 50%. At 50%, the additional cost of adding CCS to a power station would therefore increase the cost of the electricity produced by 50%. That's why there are virtually no coal power stations globally currently using CCS.
Coal is already more expensive than renewables. Adding CCS to coal power stations, to reduce their CO2 emissions to those of renewables would make coal even more uneconomic. Even if you argue that renewables are too variable to be relied on, the fossil fuel we should use to "firm" renewables output should be gas, because it can be easily dialled up or down to complement changes in output and demand. Burning gas instead of coal produces half the CO2 emissions of coal. A grid with 75% renewables and 25% gas would still slash emissions by nearly 90%. And ultimately we could produce the gas via the Sabatier process.