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Carbon capture and storage technologies in the European power market

Author

Listed:
  • Rolf Golombek
  • Finn Roar Aune
  • Mads Greaker
  • Sverre A.C Kittelsen
  • Ole Røgeberg

    () (Statistics Norway)

Abstract

We examine the potential of Carbon Capture and Storage (CCS) technologies in the European electricity markets, assessing whether CCS technologies will reduce carbon emissions substantially in the absence of investment subsidies, and how the availability of CCS technologies may affect electricity prices and the amount of renewable electricity. To this end we augment a multi-market equilibrium model of the European energy markets with CCS electricity technologies. The CCS technologies are characterized by costs and technical efficiencies synthesized from a number of recent cost estimates and CCS technology reviews. Our simulations indicate that with realistic values for carbon prices, new CCS coal power plants become profitable, totally replacing non-CCS coal power investments and to a large extent replacing new wind power. New CCS gas power also becomes profitable, but does not replace non-CCS gas power fully. Substantially lower CCS costs, through subsidies on technological development or deployment, would be necessary to make CCS modification of old coal and gas power plants profitable.

Suggested Citation

  • Rolf Golombek & Finn Roar Aune & Mads Greaker & Sverre A.C Kittelsen & Ole Røgeberg, 2009. "Carbon capture and storage technologies in the European power market," Discussion Papers 603, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:603
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    Cited by:

    1. Rübbelke, Dirk & Vögele, Stefan, 2013. "Effects of carbon dioxide capture and storage in Germany on European electricity exchange and welfare," Energy Policy, Elsevier, vol. 59(C), pages 582-588.
    2. Grimaud, André & Rouge, Luc, 2014. "Carbon sequestration, economic policies and growth," Resource and Energy Economics, Elsevier, vol. 36(2), pages 307-331.
    3. Rolf Golombek & Kjell Arne Brekke & Michal Kaut & Sverre A.C. Kittelsen & Stein W. Wallace, 2016. "Stochastic equilibrium modeling: The Impact of Uncertainty on the European Energy Market," EcoMod2016 9201, EcoMod.
    4. Hoel, Michael & Jensen, Svenn, 2012. "Cutting costs of catching carbon—Intertemporal effects under imperfect climate policy," Resource and Energy Economics, Elsevier, vol. 34(4), pages 680-695.
    5. Eisenack, Klaus & Edenhofer, Ottmar & Kalkuhl, Matthias, 2012. "Resource rents: The effects of energy taxes and quantity instruments for climate protection," Energy Policy, Elsevier, vol. 48(C), pages 159-166.
    6. Anders Skonhoft & Bjart Holtsmark, 2014. "The Norwegian support and subsidy of electric cars. Should it be adopted by other countries?," Working Paper Series 15814, Department of Economics, Norwegian University of Science and Technology.
    7. Durmaz, Tunç & Schroyen, Fred, 2013. "Evaluating Carbon Capture and Storage in a Climate Model with Directed Technical Change," Discussion Paper Series in Economics 14/2013, Norwegian School of Economics, Department of Economics.
    8. Haakon Vennemo & Jianwu He & Shantong Li, 2014. "Macroeconomic Impacts of Carbon Capture and Storage in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(3), pages 455-477, November.
    9. Aune, Finn Roar & Dalen, Hanne Marit & Hagem, Cathrine, 2012. "Implementing the EU renewable target through green certificate markets," Energy Economics, Elsevier, vol. 34(4), pages 992-1000.
    10. Kjell Arne Brekke & Rolf Golombek & Michal Kaut & Sverre A.C. Kittelsen & Stein W. Wallace, 2013. "The Impact of Uncertainty on the European Energy Market: A Scenario Aggregation Approach," CESifo Working Paper Series 4500, CESifo Group Munich.

    More about this item

    Keywords

    Carbon capture and storage; fossil fuels; energy; carbon emissions; abatement.;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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