McKinsey & Company has just released a study entitled “Carbon Capture and Storage: Assessing the Economics,” which focuses on CCS costs in Europe. Key findings of the study include:
- Recent high profile reports, such as those by IPCC, Lord Stern and IEA have described CCS as a key potential abatement measure to help slow climate change.
- For the reference case of new coal power installations, CCS costs could come down to around € 30-45 per tonne of CO2 abated in 2030 — which is in line with expected carbon prices in that period. Early demonstration projects will typically have a significantly higher cost of € 60-90 per tonne.
- Individual project costs can vary from the reference case costs, depending on their specific characteristics.
- The costs of different capture technologies are at this stage quite similar, while retrofit and industrial CCS applications will typically have higher costs than new build coal power applications.
- There are feasible paths for the European CCS industry to develop from the demonstration phase to substantial scale in 2030; however, this requires storage and business model challenges to be resolved.
- Capturing the CCS abatement potential in Europe would require rapid deployment of a demonstration program and planning for a subsequent commercial roll-out. Several barriers and uncertainties would need to be addressed.
To view the study, go to: http://www.mckinsey.com/clientservice/ccsi/pdf/CCS_Assessing_the_Economics.pdf.