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EnergyInnovation / eps-us

Energy Policy Simulator - United States
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Allow carbon tax to drive CCS deployment #11

Open jrissman opened 4 years ago

jrissman commented 4 years ago

If a carbon tax makes it cost-effective to adopt CCS, the EPS should deploy CCS to the extent it is cost-effective to do so. The CCS policy lever would then be additional to economically-driven CCS deployment, up to the limit of CCS potential.

Currently, capital and O&M costs for CCS are handled separately from the capital costs of the underlying power plants or industrial equipment. This is fine today, when the CCS is not price-driven. But if CCS is price-driven, it would be necessary to incorporate the CCS equipment and O&M costs into the cost to build and maintain particular types of power plants (and maybe also industrial equipment, if we have already implemented an industrial equipment stock turnover model, as is required by issues #8 and #9). It might also be necessary to track fossil plants with and without CCS equipment (perhaps with a variables specifying the share of power plants or industrial equipment that is equipped with CCS), and to move between those categories if retrofitting old equipment, and to preferentially retire non-CCS-equipped power plants or industrial machinery. Accordingly, implementing the financial accounting and equipment tracking required by this feature request would entail significant development effort.

mkmahajan commented 3 years ago

Robbie and I just had a conversation with CCL where they requested this feature. Here are two sources that could help set up some of the requirements: see Exhibit ES-1 in this NETL report (https://www.netl.doe.gov/projects/files/CostofCapturingCO2fromIndustrialSources_011014.pdf) that shows the breakeven cost by industrial process and this CATF report on power sector CCS with 45Q credits that could be useful for calibration (https://www.catf.us/wp-content/uploads/2019/02/CATF_CCS_United_States_Power_Sector.pdf).

We also discussed the possibility of setting up new power plant types that include CCS, which is referenced above as part of this issue, and retrofitting power plants with CCS, which I think could be handled through the elec/EoPPFTSwFP variable.

robbieorvis commented 2 months ago

This is handled now in the electricity sector. I suggest we consider it for 4.1 or 4.2 for industry.