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CCS from the gas-fired power station at Kårstø A commercial analysis

Author

Listed:
  • Osmundsen, Petter

    () (University of Stavanger)

  • Emhjellen, Magne

    (PETORO)

Abstract

Summary The article presents a commercial investment analysis of the carbon capture project at the Kårstø gas processing plant in south-western Norway. We update an earlier analysis and critically review the methods used--including those applied for cost estimating. Our conclusion is that carbon capture and storage (CCS) at Kårstø would be a very unprofitable climate measure with poor cost efficiency. It would require more than USD 1.7 billion1 in subsidies, or in excess of USD 133 million per year. That corresponds to a subsidy of roughly USD 0.1 per kWh on the power station's electricity output. The cost per tonne of carbon emissions abated is about USD 333, which is about 20 times the international carbon emission allowance price and many times higher than alternative domestic climate measures.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Osmundsen, Petter & Emhjellen, Magne, 2010. "CCS from the gas-fired power station at Kårstø A commercial analysis," UiS Working Papers in Economics and Finance 2010/1, University of Stavanger.
  • Handle: RePEc:hhs:stavef:2010_001
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    File URL: http://www1.uis.no/ansatt/odegaard/uis_wps_econ_fin/uis_wps_2010_1_osmundsen_emhjellen.pdf
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    References listed on IDEAS

    as
    1. Osmundsen, Petter & Emhjellen, Magne, 2010. "Decision criteria for climate projects," UiS Working Papers in Economics and Finance 2010/2, University of Stavanger.
    2. Osmundsen, Petter, 2009. "Time consistency in Petroleum Taxation - The case of Norway," UiS Working Papers in Economics and Finance 2009/18, University of Stavanger.
    3. Emhjellen, Kjetil & Emhjellen, Magne & Osmundsen, Petter, 2002. "Investment cost estimates and investment decisions," Energy Policy, Elsevier, vol. 30(2), pages 91-96, January.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Magne Emhjellen & Petter Osmundsen, 2013. "CCS - Failing to Pass Decision Gates," CESifo Working Paper Series 4525, CESifo Group Munich.
    2. Emhjellen, Magne & Osmundsen, Petter, 2012. "Rate of return requirement for climate versus petroleum projects," UiS Working Papers in Economics and Finance 2012/7, University of Stavanger.
    3. repec:ces:ceswps:_4944 is not listed on IDEAS

    More about this item

    Keywords

    Carbon Capture;

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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