Flexible operation of a carbon capture and storage (CCS) plant can lower the cost of foregone electricity sales in competitive wholesale electricity markets, but it reduces the amount of carbon dioxide (CO2) captured over the lifetime of a CCS plant and increases the capital cost of CCS systems per unit of emissions captured. Whether the benefits of flexible CCS exceed the increased costs depends on a relationship between capital and operating costs and cyclical electricity price differentials. This paper explores these tradeoffs, proposes a method to quantify them, and applies this framework to U.S. data on CCS capital costs and electricity prices.
Author(s): Dalia Patino-Echeverri and David C. Hoppock
Published: December 2012