Clean Coal is Expensive

• July 20, 2009
• Jay Yarow
• The Business Insider

Even worse, that's the cost projection for CCS 20 years from now. Until then, if your utility bets on CCS instead of alternative energy, you'll be paying even higher electricity bills. (Someone has to pay for those new coal burning plants that can capture CO2.)

Building a "first of its kind" CCS plant will cost $150 per ton of CO2 captured, which equates to a 10 cents per kilowatt hour increase in electricity prices, according to the Harvard Study. The national average for electricity is 10 cents per kilowatt hour, according to the EIA. As more plants are built, the cost of the carbon sequestration will drop to about $50 per ton of CO2, or 2-5 cents per kilowatt hour.

Interestingly, this indicates to us that it's going to be cheaper to pollute and buy carbon credits under cap and trade than it is to build carbon capture coal plants. The CBO's analysis of cap and trade indicated that the price of carbon would be $28 per carbon credit. According this estimate, if credits cost less than $50 per ton, then it doesn't provide an impetus to use CCS technology.

Another problem for  CCS:
Time. The analysis says it won't reach its lower cost for almost 20 years. A lot can change in 20 years. We could have a better energy storage technology, solar power could be cheaper, or heck, global warming could be disproved. In the interim we might
blow billions on clean coal, and get jacked up electric bills.

The report only accounts for the costs. There are possible benefits to carbon capture. The carbon can be used for Enhanced Oil Recovery (EOR). The benefits from that could make carbon capture a less costly proposition.