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Argument: Carbon capture and sequestration raises costs and energy prices

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Although the processes involved in CCS have been demonstrated in other industrial applications, no commercial scale projects which integrate these processes exist, the costs therefore are somewhat uncertain. However, some recent credible estimates indicate that a carbon price of US$60 per US-ton is required to make capture and storage competitive,[78] corresponding to an increase in electricity prices of about US 6c per kWh (based on typical coal fired power plant emissions of 2.13 pounds CO2 per kWh). This would double the typical US industrial electricity price (now at around 6c per kWh) and increase the typical retail residential electricity price by about 50% (assuming 100% of power is from coal, which may not necessarily be the case, as this varies from state to state). However similar (approximate) price increases would likely be expected in coal dependent countries such as Australia, because the capture technology and chemistry, transport and injection costs from such power plants would not, in an overall sense, vary significantly from country to country. The reasons that CCS is expected to cause such power price increases are several. Firstly, the increased energy requirements of capturing and compressing CO2 significantly raise the operating costs of CCS-equipped power plants. In addition there is added investment or capital costs. The process would increase the fuel requirement of a plant with CCS by about 25% for a coal-fired plant and about 15% for a gas-fired plant. The cost of this extra fuel, as well as storage and other system costs are estimated to increase the costs of energy from a power plant with CCS by 30-60%, depending on the specific circumstances. Pre-commercial CCS demonstration projects are likely to be more expensive than mature CCS technology, the total additional costs of an early large scale CCS demonstration project are estimated to be €0.5-1.1bn per project over the project lifetime.

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