Despite increasing efforts to decarbonize the power sector, the utilization of natural gas-fired power plants is anticipated to continue. This study models existing solvent-based carbon capture technologies on natural gas-fired power plants, using site-specific emissions and regionally defined cost parameters to calculate the cost of CO2 avoided for two scenarios: Delivery to and injection within reliable sequestration sites, and delivery and injection for the purpose of CO2-enhanced oil recovery (EOR). Despite the application of credits from the existing federal tax code 45Q, a minimum incentive gap of roughly $38/tCO2 remains for the geologic sequestration of CO2 and $56/tCO2 for CO2-EOR (before consideration of revenue generated from delivered CO2 contracts). At full escalation of 45Q, delivered CO2 costs from this sector for geologic sequestration could reach as low as $22/tCO2. However, given the capital investment required in the near-term, it would be beneficial if the credit provided the greatest economic benefit early on and decreasing over time as deployment continues to ramp up. Additionally, due to the high qualifying limit of 45Q for the power sector, e.g., 500 ktCO2/yr, the tax credit incentivizes the capture of roughly 397 MtCO2/yr at a 90% capture efficiency or 75% of the emissions in this sector, with missed opportunities equating to roughly 118 MtCO2. Advancing the scale of carbon capture and sequestration (CCS) will require both technological advances in the capture technology, cost reductions through the leveraging of existing infrastructure, and increased policy incentives in terms of cost along with the reduction of qualifying limits.
ASJC Scopus subject areas
- Environmental Chemistry