Defining CCS Ready: An Approach to An International Definition

Appendix C: Policy Considerations and Assessments of CCS Ready Economics• Reference Plant (Not CCS Ready) – A business-as-usual (“BAU”) plant with noanticipation of future carbon capture controls. The plant is a nominal 600 MWsupercritical PC. Although no specific space and tie-ins are provided in this plant, aretrofit is assumed to be reasonably possible.• Option 1 (Throttle valve case) – Along with the minimum essential capture readysteps, such as ensuring enough land and building space, the only major expense for thisoption is the front-end engineering design (FEED) work to plan for retrofitting an aminebasedcarbon capture system, with a provision for incorporation of a throttle valve,ducting, and extraction steam piping to the amine reboiler.• Option 2 (Clutch case) – The second option has a FEED and the incorporation of aclutch between the two low-pressure steam turbine stages. With 50% steam extractionfor the amine reboiler, declutching the second low pressure steam turbine stage fromoperation would improve heat rate performance.• Option 3 (Oversize case) – Option 3 increases the size of the steam furnace suchthat there is no loss in electric output capacity (MWe) compared with after a captureretrofit. All downstream systems are upsized as well to accommodate both the increasein steam flow as well as flue gas. Before retrofitting, the boiler is assumed to operate atpartial load with no heat rate penalty.To account for uncertainties in future CCS technologies, two CCS retrofit options arerepresented in addition to a “no CCS retrofit” option. The “current” capture technology isan amine solvent and the “advanced” case is an unspecified solvent process that requiresone-half of the energy used for current amine solvent regeneration.C.4.2 Decision Criteria for CCS RetrofitIn the Monte Carlo analysis the option to retrofit the plants to current CCS technology(and, if available, the advanced CCS technology) is evaluated in each operating year based onthe principle of profit maximization by the plant developer. If the discounted net presentvalue of the plant can be increased by the CCS retrofit, then retrofit is assumed to takeplace that year. Because the plants are modelled as having a maximum life of 41 years,retrofit costs must be recovered between the retrofit year through the year 2055. Thedecision between current and advanced CCS technologies is assumed to be made“myopically” based only on whether or not the advanced technology exists in the retrofityear. In other words, the power plant owner does not know the advanced CCS technologyis coming until after it arrives.A key determinant of when the retrofit will take place is the assumed CO 2 allowance price.Sufficient economic incentive for retrofit may be provided as the allowance priceapproaches or exceeds the per-unit-abated total cost (i.e. $/tCO 2 e) of the CCS retrofitincluding all money-forward capital and operating costs. This per-unit-abated economicindicator is “approximate” because the process of retrofit likely will increase plant dispatch(capacity utilization) and may increase operating life by dropping the variable operating costof the power plant (chiefly because the CO 2 allowance cost then will be paid for 90 percentfewer CO 2 emissions) 154 Because the hours dispatched and operating life of the plant mayincrease after CCS retrofit, the economic measure of $/tCO 2 e abated versus allowance154 If the Monte Carlo example were done for a jurisdiction that has severe electricity supply shortages, then the retrofit ofthe plant to CCS might not be modeled as increasing capacity utilization.23 February 2010 108