A new report cautions that maintaining coal and gas power facilities while claiming to combat climate change would likely result in higher electricity costs for customers. Companies that use fossil fuels have been eager to introduce technologies. They remove carbon dioxide from power plant emissions that heats the earth. Relying on carbon capture tech (CCS) is risky and may burden consumers with higher costs.
Recent research from IEEFA indicates that power plants with carbon capture systems are 1.5 to 2 times more costly than alternative options for electricity generation.
According to research co-author Christina Ng in a news release, “the economic case for CCS in the electricity sector is weak, considering input cost and finance uncertainties, continuous failures of the technology, and the ever improving alternatives.”
The system is designed to catch most CO2 emissions from power plants before they can escape from smokestacks. The greenhouse gas can then be moved and stored in a safe location to prevent it from entering the atmosphere and accelerating climate change.
Usually, fossil fuel firms “store” that CO2 underground by pumping it there. But, they typically do it using a procedure known as enhanced oil recovery. It’s a strategy used to raise challenging oil reserves, which businesses can then market as “carbon neutral” oil. Fossil fuel firms use it to present themselves as eco-champions, while they pursue more oil drilling.
It turns out that using CCS to support fossil fuels will likely result in higher energy costs as well. IEEFA’s report reveals that CCS installation cost estimates often exclude CO2 storage and transportation expenses. These expenses, which could include creating new pipeline networks, are high.
The Petra Nova facility, which opened for business in 2017, operated for a brief while before being shut down by its owners. When oil prices fell in 2020 during the commencement of the COVID-19 pandemic, it ceased to function. Petra Nova is set to resume operations later this year as a result of the recent increase in oil prices. Last year, ING’s analysis predicted that the global capacity of CCS is likely to triple by 2030
According to the IEEFA analysis, optimism bias is pervasive. But the question of who would ultimately foot the bill raises the risk of funding.
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