A framework for assessing the CO2 mitigation options for the electricity generation sub-sector

Carbon capture and storage is a key technology for limiting global warming to 2C above historical levels and, thereby, avoiding the worst impacts of climate change. [24, 5] In particular, CCS (Carbon Capture and Storage) is one of the few alternatives for largescale reductions within the power generating sector. The pace of CCS deployment in the electricity generation sector is slower than would be dictated by environmental concerns and this is attributed to CCS’s relatively high capital and operating costs and the impact that this has on the CoE (Cost of Electricity). CCS is an active area of research with most of the focus being on reducing the capture costs with CoE and CCA (Cost of CO2 Avoided) being the metric of choice. Techno-economic assessments of CCS normally disregard the operation of the electricity system in which CCS is targeted. Generic assumptions are made with respect to the performance (e.g., heat rate, capacity factor) of units fitted with CCS with little or no validation and despite the fact that CCA is highly sensitive to the values selected for these parameters. Additionally, the use of CoE as a key performance metric may lead to suboptimal conclusions since the average electricity price is likely of greater interest to electricity market participants and it is not certain that cost is a good proxy for price. It is proposed that in order to effectively assess the performance of GHG (Greenhouse Gas) mitigation strategies in general, and CCS in particular, one needs to explicitly consider the operation of the target electricity system. The primary objective of this work is to develop and describe an approach for evaluating GHG mitigation strategies that considers the detailed operation of the electricity system in question and to ascertain whether considering the detailed operation of the electricity system affects the assessment of the effectiveness of the GHG mitigation strategy. It is also typically assumed that generating units with CCS operate at full load with a constant CO2 recovery. It is normal for the dispatch of generating units to vary with time in an effort on the part of system operators to optimally meet electricity demand. It may be the case that generating units with flexible CO2 capture may be able experience better performance than units without this flexibility by independently varying production electricity and CO2 to match the instantaneous demand for these commodities. A secondary objective of this work is to evaluate the potential benefit of flexible CO2 capture and storage. An electricity system simulator is developed; it is based upon a deregulated electricity system containing markets for both real and reserve power, with consumers that are priceinsensitive, generators that bid their units’ power at the marginal cost of generating, and a system operator that provides hourly dispatch instructions seeking to maximize social welfare while respecting the physical constraints of the units and transmission system. Using the IEEE RTS ’96 (IEEE One-Area Reliability Test System — 1996) as a test case, the performance of the electricity system is benchmarked with GHG regulation in the form of a carbon tax at $15, $40, and $100/tonne CO2. Two different implementations of CO2