Carbon capture can’t beat energy efficiencyCCS and “clean coal” not cost effective

Blog - Dec. 6, 2016 - By Benjamin Israel

Image courtesy SaskPower

The federal government’s recent commitment to a national coal phase-out by 2030 has reignited a conversation on using carbon capture and storage (CCS) to reduce emissions from coal power stations. Often mentioned in this conversation is the CCS project at Boundary Dam 3 in Saskatchewan – the only commercial operating coal-fired CCS project in the world.

Some people point to this project as an example of what can be done to enable continued use of coal-fired power in the era of increase climate ambition. But this point isn’t consistent with another point often raised in the climate debate: that the transition to low-carbon should occur through cost efficient policies, regulations and strategies. In fact, CCS and “clean coal” boosters often miss this point entirely, and don’t consider the fact that the technology’s economics simply don’t stack up well against the other options on the table to clean up and modernize Canada’s electricity supply.

Source: Lazard’s Levelized Cost of Energy Analysis – Version 9.0, 2015.

Note: Values are the averages from the ranges available for each technology, except for coal equipped with CCS, which the report lists at the high end of overall coal technology. Values for solar PV and wind are for utility-scale, not community or residential. U.S. dollars have been converted to Canadian dollars using Bank of Canada average rate for 2015.

Comparing costs between other electricity options clearly demonstrates that CCS and “clean coal” is not cost effective compared to readily available alternatives. In fact, energy efficiency is the most cost effective. Renewable energy and new natural gas electricity generation are also significantly less expensive than CCS. Renewable energy also has the advantage of being better for communities, given that it doesn’t emit carbon pollution or have adverse impacts on air quality.

In the long-run, CCS could very well be a critical technology for capturing greenhouse gases from sectors (such as production of fertilizers, steel, cement and petrochemicals) and countries (namely, the 2,500+ coal fired electricity plants in India and China) that do not have many alternatives. But for Canada, the equation is different: while CCS might be able to help us manage GHG emissions from fossil fuel dependent technologies, we need to weigh its cost against those of readily available alternatives, like energy conservation, renewable energy, and natural gas. Further, we need to think about what other low carbon innovation those investment dollars could unlock: instead of investing billions of dollars to retrofit Canada’s remaining coal-fired power with CCS, that money might be better spent on research and development, or commercialization of lower-cost technologies that don’t even need fossil fuels. In the inevitable transition away from fossil fuels, we hope governments keep an open mind on how best to make strategic technology and infrastructure investments.

Tags:  National, Alberta, Coal.

Benjamin Israel

Benjamin Israël is an analyst with the Pembina Institute. He is based in Calgary.


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