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A Least-Cost optimisation Model of Co2 Capture Applied to Major uK Power Plants Within The Eu-ETS Framework

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  • A.G. Kemp and A.S. Kasim

Abstract

Concerns about the cost of CO2 capture and sequestration, and the effective¥ness of carbon abatement policies loom large in discussions on climate change mitiga¥tion. Several writers address the issue from various perspectives. This paper attempts to add relative realism to discussions on CO2 capture costs, and, the deployment of carbon capture technology in the UK by using publicly available company data on the long term capacity expansion and CO2 capture investment programmes of selected power plants in the UK. With an estimated £8 billion plan to install a generation ca¥pacity of 11 GW and capture capability of 44 MtCO2/year, it is imperative to optimise this huge potential investment. A least-cost optimisation model was formulated and solved with the LP algorithm available in GAMS. The model was then applied to ad¥dress a number of issues, including the choice of an optimal carbon abatement policy within the EU-ETS framework. The major findings of the study include (a) the long term total cost curve of CO2 capture has three phases Ð rising, plateau, rising; (b) alternative capture technologies do not have permanent relative cost advantages or disadvantages; (c) Government incentives encourage carbon capture and the avoid¥ance of emission penalty charges; and (d) the goals of EU-ETS are more effectively realised with deeper cuts in the EUA ratios than merely hiking the emission penalty, as proposed in EU-ETS Phase II.

Suggested Citation

  • A.G. Kemp and A.S. Kasim, 2008. "A Least-Cost optimisation Model of Co2 Capture Applied to Major uK Power Plants Within The Eu-ETS Framework," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 99-134.
  • Handle: RePEc:aen:journl:cw-sped-a07
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    Citations

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    Cited by:

    1. Massol, Olivier & Tchung-Ming, Stéphane & Banal-Estañol, Albert, 2015. "Joining the CCS club! The economics of CO2 pipeline projects," European Journal of Operational Research, Elsevier, vol. 247(1), pages 259-275.
    2. Harinder Kohli & Ashok Sharma & Anil Sood (ed.), 2011. "Asia 2050: Realizing the Asian Century," Books, Emerging Markets Forum, edition 1, number asia2050, August.
    3. Harinder Kohli & Anil Sood (ed.), 2010. "India 2039: An Affluent Society in One Generation," Books, Emerging Markets Forum, edition 1, number india2039, August.
    4. Janne Kettunen, Derek W. Bunn and William Blyth & Derek W. Bunn & William Blyth, 2011. "Investment Propensities under Carbon Policy Uncertainty," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 77-118.
    5. Kemp, Alexander G. & Sola Kasim, A., 2010. "A futuristic least-cost optimisation model of CO2 transportation and storage in the UK/UK Continental Shelf," Energy Policy, Elsevier, vol. 38(7), pages 3652-3667, July.
    6. Abadie, Luis M. & Chamorro, José M., 2008. "European CO2 prices and carbon capture investments," Energy Economics, Elsevier, vol. 30(6), pages 2992-3015, November.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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