Dynamic optimization of carbon capture technology deployment targeting carbon neutrality, cost efficiency and water stress: Evidence from China's electric power sector

Lin Yang, Haodong Lv, Ning Wei, Yiming Li and Xian Zhang

Energy Economics, 2023, vol. 125, issue C

Abstract: The potential of carbon capture, utilization and storage (CCUS) has been widely discussed worldwide, while the dynamic changing process, lock-in risk and water resource constraints towards carbon neutrality target are not fully considered in the previous studies. This study developed a comprehensive approach to optimize carbon mitigation potential, total capital expenditure and water resource stress for China's coal-fired power plants (CFPPs) with CCUS retrofitting in a dynamic environment. We found that the annual capture scale will start to increase significantly until 2030 and reach 2.4 billion tons CO2 in 2050. The newly-added capture scale of first-generation technology will decline gradually after 2030 due to the breakthrough in second-generation technology. Inner Mongolia, Jiangsu and Guangdong have the greatest potential for implementing CCUS projects, and the least in Hainan, Sichuan and Qinghai. The annual capture cost roughly presents an "inverted U" shape with the peaking (14.70 billion CNY) occurring in 2035, while the annual R&D investment can be observed a moderate "N" shape with the peaking (11.24 billion CNY) occurring in 2030. The annual non-corporate expenditures (subsidy) will picture a significant "inverted U" type trend, peaking at 63.71 billion CNY in 2044 as a result of the risk factors such as CCUS facility investment and additional storage cost caused by uncertain geological conditions. In addition, the annual water withdrawal and consumption of capture process will increase from 0.09 and 0.06 billion m3 respectively in 2021 to 9.12 and 6.22 billion m3 respectively in 2050, while CO2-EWR (Enhanced water recovery) process will make CCUS technology supply extra water resource since 2035, reaching 27.05 billion m3 in 2050. Meanwhile, in terms of first- and second-generation capture technology, the unit water withdrawal will drop 35.04% and 36.71%, respectively, while the unit water consumption will drop 66.89% and 74.12%, respectively during 2021–2050. Overall, although CCUS will not intensify water resource stress in the future, the appropriate relaxation ratio of water quota is essential at the initial stage.

Keywords: Carbon capture utilization and storage (CCUS); Capture scale; Capture cost; Subsidy; Water withdrawal; Water consumption (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:125:y:2023:i:c:s0140988323003699

DOI: 10.1016/j.eneco.2023.106871

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