RESEARCHERS PITCH STANDARDIZED WAY OF DETERMINING CCS COSTS

Tamar Hallerman
GHG Monitor
6/7/13

A group of energy researchers is circulating a standardized method of determining the cost of carbon capture and storage projects in order to eliminate data discrepancies and reduce confusion for outside parties. An informal task force comprised of CCS experts in academia, industry, government and NGOs recently released a white paper aimed at doing just that. The report is based on the premise that different groups like the Electric Power Research Institute (EPRI), the International Energy Agency’s Greenhouse Gas R&D Programme (IEAGHG) and the Department of Energy’s National Energy Technology Laboratory (NETL) incorporate different factors and assumptions while estimating the cost of CCS projects, according to task force lead Ed Rubin of Carnegie Mellon University.

In a recent interview, Rubin said, for example, that some groups calculate project costs throughout the life of a plant using “constant” dollars that do not take into account inflation, while others do incorporate that metric by calculating costs in “current” dollars. Such a discrepancy could have a large impact on final cost figures, Rubin said. “That discrepancy could be a big deal, particularly when numbers are being fed into political systems and could influence policy judgments,” Rubin said. “The bottom line is that that one item can add 20 percent to 30 percent to the cost of a project. So by not including it in one person’s method and including it in another’s, you’re not going to be getting an apples-to-apples comparison.” 

Side-By-Side Review

The task force examined the costing methodologies and assumptions from organizations like EPRI, NETL, IEAGHG and others side-by-side to see where there are overlaps and holes in the factors they consider. “When we put the different sets of guidelines side-by-side, we found that they don’t all do things the same way,” Rubin said. “The basic shopping lists for which items go into a cost estimate are different. Many of them are similar, but there are still significant differences.” The paper argues that those differences in methodologies are often not readily apparent to the readers of different studies. “Taken together, the result in many cases is to confuse, rather than clarify, the cost of a particular CCS technology or process,” the white paper states. Those inconsistencies could create a “misunderstanding and misrepresentation” of CCS costs to the public and policymakers, according to the paper, which could have negative political impacts for a fledging technology like CCS that must also compete with other low-carbon energy sources like renewables and nuclear.

The white paper draws out a standardized “shopping list” of factors that should be included in CCS costing methodologies for different organizations and governments. It also notes that some details and assumptions cannot be standardized since they vary greatly from project to project. In those cases, the paper provides a checklist of points that authors should communicate to their audience in order to avoid misunderstandings. “We need to do a better job of getting a more systematic nomenclature. We should be able to speak the same language,” Rubin said.