----The relevance of Carbon Capture and Storage ----
The large deployment of CCS after 2020 is required partly as a fossil-fuel assets protection
strategy.26 In 2020, there are almost 2 000 GW of ...
coal-fired capacity and almost 1 800 GW
of gas-fired capacity installed worldwide in the 4-for-2 °C Scenario, together representing
58% of total electricity generation. Deploying CCS and retrofiting fossil-fuel plants with CCS
avoids the need to mothball large parts of this feet and improves the economic feasibility
of the climate objective, in particular in regions where geological formations allow for
CO2 storage (IPCC, 2005). So far, only a handful of large-scale CCS projects in natural
gas processing are operating, together with some low-cost opportunities in industrial
applications. While many projects are economically viable because CO2 is purchased for
enhanced oil recovery (EOR), there is no single commercial CCS application to date in the
power sector or in energy-intensive industries. Additional to technological and economic
challenges, CCS must overcome legal challenges related to liabilities associated with the
perceived possibility of the escape of the CO2 gases that are stored underground. Existing
policies so far are insufficient to incentive investments in commercial-scale CCS (Box 2.4).
Although progress has been made towards improving the regulatory framework, sufficient
technology and deployment support is lacking and the absence of a substantial price signal
has impeded necessary development of CCS technology.
Past analysis has demonstrated that emissions mitigation becomes more costly without CCS
(IEA, 2011c).27 In the power sector, delaying introduction of CCS from 2020 to 2030 would
increase the investment required to keep the world on track for the 2 °C target by more than
$1 trillion, as the need for additional investment in other low-carbon technologies, such
as renewables and nuclear, would more than offset the reduced investment in coal power
plants and CCS (Figure 2.19). Although a reduction of electricity demand can accommodate
lower CCS deployment in the power sector, there are limits to the extent to which energy
efficiency can reduce energy demand without reducing energy services.
While the delayed availability of CCS can be compensated in the power sector by increasing
investment in renewables and nuclear, albeit at higher costs, the fact that alternatives
are not available to compensate for a short-all of the deployment of CCS technologies
in industry is a bigger challenge. Energy-efficient equipment can go a long way (and is
deployed to its maximum in the 450 Scenario), but the potential for renewables in
industrial applications is limited. A higher use of decarbonised electricity in industry has
some potential, for example in iron and steel via secondary steelmaking, but this would
not allow the production of certain product qualities. Whithout the deployment of CCS or an
alternative low-carbon technological breakthrough in industrial processes, industry would
struggle to reach the levels of decarbonisation necessary to achieve the 450 Scenario,
so putting further pressure and imposing greater costs on sectors with more options to
decarbonise, such as transport and power generation.
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