Vattenfall - Abatement potential

Abatement potential for the power sector

Five major abatement possibilities have been identified in the power sector. These abatement possibilities have the potential to decrease emissions with close to 35% compared with business-as-usual emissions in 2030, at a marginal cost of less than €40/tonne CO₂e compared to the BAU scenario. Most of these abatement possibilities are based on known technologies, however not all technologies are expected to be competitive in the beginning of the 2002-2030 period. The five abatement possibilities are:

• Reduction of the demand for power through increased energy efficiency among end-users
• Installation of Carbon Capture and Storage (CCS). The installation of the CCS technology is assumed to reach a commercial scale over the period 2015-2030 and to reach 85% penetration of new buildt coal plants after 2020
• Growth of emerging renewables to 15-20% share of power production in 2030. This assumes a marginal cost of new assets in 2030 corresponding to €5-50/tCO₂e
• Growth in nuclear power is assumed to approximately double, reaching an installed capacity of approximately 740 GW
• Growth in gas instead of coal, generated by high CO₂ emission prices. This will also lead to an earlier replacement of old coal plants, which in turn leads to higher overall efficiency

Additional technical potential from for example nuclear, carbon capture and storage and renewables also exists, but these come at a higher marginal cost of € 40-65/tCO₂e. CCS re-powering of gas plants can be achieved at a marginal cost of € 55-65/tCO₂e. On the other hand, this means that the power sector could act as a ‘safety valve’if abatements are not successful in other sectors. Around 40-50% of the reduced impact from not delivering in end-user efficiency could be absorbed by a more aggressive deployment of CCS and renewables below € 40/tCO₂e. Feasibility of achieving abatement in the power sector is high relative to other sectors, primarily since it is easy to track emissions in the power sector and financial incentives are likely to significantly affect investment behaviour.

Five major abatement possibilities

Five key sources of abatement possibilities in the power sector have been analysed:

Carbon Capture and Storage (CCS) is assumed to be a proven technology by 2015-2020. The stand alone potential at a cost below €40/tCO₂e is found to be 2.6-4.3 GtCO₂e. This includes CCS on biomass. By 2030, abatement costs are assumed to decrease to €20-40/tCO₂e. CCS can reach an implementation rate of approximately 85% of newly built coal plants in the period 2020-2030. Renewables: The cost of wind, biomass and solar power is assumed to decrease due to learning curve effects and will become cost competitive by 2015-2020 at a CO₂ price of €40/tCO₂e. The abatement costs by 2030 are assumed to be €5-40/tCO₂e and the stand-alone potential is approximated to 1.4-2.0 GtCO₂e. This includes co-firing of biomass in coal plants. Until 2015-2020, biomass will require subsides. Emerging renewables is assumed to amount to 20% of the power production by 2030. Nuclear power is an already proven technology with moderate cost improvements assumed to be driven by reduced cost of capital. Volume deployment will depend on political decisions. The abatement costs for this technology is assumed to be in the range of €-5-10/tCO₂e by 2030 and the stand-alone potential is estimated to 0.7-1.3 GtCO₂e. CO₂-efficient fossil fuel sources are also a proven and existing technology. The abatement cost of this technology is assumed to be in the range of €25-40/tCO₂e by 2030 and the standalone potential is estimated to be 0.2-0.5 GtCO₂e. Demand reduction is assumed to come primarily from increased end-user efficiency in the Buildings (residential & commercial) and the Industry sectors. This will impact the power sector by reduced emissions from reduced power production. However, actions to reduce end-user consumption will also take place in other sectors. Generally, the cost of reducing demand is low in the Buildings (residential & commercial) sector and higher in the Industry sector. The stand-alone potential is assumed to be in the range of 2-4 GtCO₂e and the abatement cost by 2030 is assumed to be €-5-20/tCO₂e. However, the abatement achieved by demand reduction through increased energy efficiency is not considered a power sector improvement and are therefore not further developed in the power sector abatement part. In addition to these five key abatement opportunities, another three abatement opportunities have been identi-fied. These abatement measures were found to take place at a higher cost than €40/tCO₂e. CCS retrofitting on existing coal, gas and biomass plants: The additional abatement potential is estimated to 1.0-1.5 GtCO₂e with an abatement cost in the range of €40-60/tCO₂e. This assumes 100% CCS penetration in industrialised countries and 50% in developing countries after 2020. These figures include retrofitting also on small coal and gas plants. Larger penetration of intermittent renewable energy sources will be possible as economics become more attractive. The additional abatement potential between €40-60/tCO₂e is estimated to be 1.0-1.5 GtCO₂e. This is assumed to come from a 25-30% penetration of wind power in all regions and additionally by an increased co-firing, also in plants with CCS. The co-firing in coal plants is estimated to increase to 25% or more when the CO₂ price make imported biomass from the southern hemisphere profitable. Further increased CO₂ efficiency: At the abatement cost of €40-60/tCO₂e, there is an additional abatement potential of 1.5 - 2.5 GtCO₂e. This assumes up to 30% reduction in coal consumption in favour of gas; accelerated replacement of old plants with new, more efficient plants. With a stable CO₂-price of €60/tCO₂e, the power sector emissions could be brought close to zero by 2030.

Read more

Emission in the power sector, business-as-usual

Central assumptions & major uncertainties