Houston (Platts)--20Jul2009

A Harvard report, released Monday, said the likely cost of using
"first-of-its-kind" technology to capture carbon dioxide at a conventional
coal-fired power plant could range from $100/ton to $150/ton of CO2, which
could add between 8 cents and 12 cents/kWh to the cost of generated power.

The report says that when carbon capture technology has matured, the cost
could plausibly be $30 to $50/ton of CO2, adding about 2 to 5 cents/kWh more
to the cost of electricity.

The Harvard John F. Kennedy School of Government report, "Realistic Cost
of Carbon Capture," said estimates do not include the cost of moving or
storing the captured CO2.

The professors who did the study also said their estimates are based on
2008 cost data, which they said was at the end of a period of sustained
escalation in costs of power generation plants and large capital projects.

"There are now indications of costs falling from these levels," the
authors said. "This may reduce the costs of abatement so costs presented here
may be 'peak of the market' estimates."

They added that if general costs were to return to those prevailing in
2005 to 2006, then the cost of pre-combustion capture with compression for a
"first of its kind" plant might be expected to cost $110/ton of CO2, while the
cost of capturing of an "nth of a kind" facility might be in the range of $25
to $50/ton of CO2, the report says.

The authors, Mohammed Al-Juaied and Adam Whitmore, note there is interest
in carbon capture and sequestration for electricity generation from fossil
fuels, because the power sector worldwide accounts for 40% of total CO2
emissions, and low-carbon electricity likely will be in greater demand.

Most technologies necessary for CCS are already demonstrated, the authors
said, but only four large CCS projects currently are operating worldwide.

"The lack of experience of CCS in the power sector leads to substantial
uncertainty about the costs of low-carbon power generation and thus of CO2
emissions abatement using CCS."

The report says reductions in capture costs should come over time because
of increasing scale, learning related to individual components and
technological innovations to improve plant integration.

"These factors are expected to reduce abatement costs by approximately
65% by 2030, [al]though such estimates are inevitably uncertain," the report
says.

--Jeffrey Ryser, jeffrey_ryser@platts.com