PDF - Graduate Institute of International and Development Studies

The main cost component is the capture stage. Retrofitting an existing power
plant that was not conceived with CO 2 capture in mind is more expensive than building a
new plant equipped for CO 2 capture. The main cost of capture in a new plant is the
investment cost and the loss in efficiency. McKinsey estimates the total cost of CSS for a
new coal-fired plant at €35–50 per ton of CO 2 abated (McKinsey 2008; figure 8).
This is well above the current carbon price in the EU Emission Trading System,
but well below the levels envisaged by the IEA in their Blue scenario, which reach to
above $200 towards 2050 (see figure 9). The IEA envisages the generalized adoption of
CCS from around 2030, and the challenge would be how to encourage early projects
before that date. Obviously the Gulf countries, facing an already daunting investment
effort to meeting growing electricity demand, would normally avoid incurring the
additional cost of introducing CCS but, in the presence of determined global policies to
reduce GHG emissions, their relative position would be very favourable.
Figure 9
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