Carbon Capture and Sequestration Could Reach $221B by 2030: Study

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Google (s goog) CEO Eric Schmidt has likened the current state of carbon capture and sequestration (CCS) technology to a half-baked web tool in need of debugging, but that doesn’t mean there aren’t powerful forces driving the growth of the CCS industry. Those forces — the need to mitigate climate change, a looming price on carbon such as through a cap-and-trade system, and large amounts of government funding — could push the emerging industry to capture and store carbon emissions from power plants toward global annual revenues of $128 billion to $221 billion by 2030, according to a report released today from Pike Research.

But the path ahead includes serious challenges and barriers, and the research firm, which tends to be more bullish than not when it comes to cleantech markets, said it believes many of the current targets for emissions captured between now and 2030 are overly optimistic. So far, there’s been no commercial-scale deployment of CCS technology, and Pike predicts that the systems will hike up the cost of producing electricity at power plants by between 50 and 70 percent (based on today’s costs and capabilities).

Energy Secretary Chu has said that CCS technology today would increase the cost of generating power from coal by about 80 percent and that it would need to get to a 20-25 percent premium to be “tolerable.” The biggest question mark around the technology’s cost going forward is the ability to improve methods for separating and capturing CO2 from emissions streams of fossil fuel power plants, which comprise about 80 percent of the total cost of CCS, the report found.

Besides its current high price, some challenges for the CCS industry are a lack of a clear price on carbon, uncertainty over how much demand there’ll be for using captured CO2 in enhanced oil recovery projects (at present, this is one of the least costly ways to store the captured gas) and various legal and regulatory issues, according to Pike. A report by Emerging Energy Research published in February found that CCS technology could be ready for commercialization as early as 2016 if demonstration projects go well and governments provide sufficient funding. Emerging Energy cited a number of the same barriers to the industry’s growth.

In the absence of a firm price on carbon, capital investments in CCS technology from private industry will remain limited, the Pike study said. But in the meantime, governments have been steadily increasing their commitments to fund R&D projects focused on advancing systems for capturing and storing emissions. The Obama administration’s recovery act included $3.4 billion for CCS-related projects, and the EU plans to spend $535 million on CCS and clean coal technology through 2013. Australia, Canada and Norway have said each would invest hundreds of millions of dollars into the industry in the coming years.

Large established power companies will likely dominate industrial storage projects, but businesses developing innovative technologies — such as GreatPoint Energy’s chemical conversion system or CO2 Solution’s enzymatic technology (which just scored a $2 million investment from Codexis) — could become important players. Algae fuel developers like Solazyme might also be able to recycle captured emissions from plants by using the gas to grow their organisms.

But Pike said that none of the emerging CCS technologies are less than a decade away from commercial deployment. Instead, in the short run, more mature technologies, like post-combustion capture systems using some type of an absorbent, will be deployed, even though they impair plant efficiencies and raise costs.

Image courtesy Wikimedia Commons user Arnold Paul.

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