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To be presented at 8 International Conference on Greenhouse Gas Control Technologies (2006)

Biomass With Carbon Dioxide Capture and Storage In a Carbon Constrained World *1

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Steven J Smith , Antoinette Brenkert , Jae Edmonds 1

Joint Global Change Research Institute Pacific Northwest National Laboratory and the University of Maryland 8400 Baltimore Avenue, Suite 201 College Park, MD 20740-2496 USA

Abstract This paper investigates the potential role of biomass electricity generation with geologic carbon dioxide capture and storage (CCS). The sustainable coupling of biomass with CCS technologies would create net negative emissions, which could potentially offset emissions from other sectors where mitigation is more expensive. We find that the successful development and deployment of biomass power plants with high-efficiency CCS could substantially reduce the cost of stabilizing the concentration of atmospheric CO2. Biomass CCS plants with high capture efficiencies would be needed to achieve these cost reductions. The benefits are reduced or eliminated if only atmospheric steam- or air-blown plants with lower capture efficiencies are available. The ultimate benefit of this technology is largely determined by the amount of biomass that can be utilized in this manner and the stringency of future climate policies. Keywords: CO2, IGCC, biomass, climate policy

Introduction Biomass is an attractive energy source under a carbon limited regime since the cycle of production and combustion can, potentially, be managed to release little net carbon. Another attractive technology is carbon dioxide capture and geologic storage (CCS), which has the potential to substantially reduce the costs of emissions mitigation. CCS options have most commonly been investigated in connection with fossil fuel use for electric power generation and hydrogen production. Here we consider the deployment of CCS technology in conjunction with the use of commercial biomass in electric power generation and its potential implications for the cost of a climate stabilization policy. While commercial biomass is a hydrocarbon, the carbon was obtained from the atmosphere and the re-release of that carbon on combustion is generally treated as having little or no net effect on atmospheric CO2 concentrations. If some of the CO2 released in the combustion of a biofuel were captured and isolated from the atmosphere the net effect would be to provide energy to the economy while removing CO2 from the atmosphere—i.e. creating an energy source with a negative CO2 emission. In this paper we investigate the potential for and implications of producing biofuels and using them in combination with CCS and estimate the value of this technology combination in a carbon constrained world..

Methodology ObjECTS MiniCAM is an integrated assessment model of global greenhouse gas emissions and climate change used to develop century scale scenarios and to assess the long-term potential role of alternative energy, economy and environmental regimes[1]. The model solves at 15-year time steps, tracking 14 global regions. It has a detailed, technologically explicit energy sector, with biomass fuels supplied from residue sources and from dedicated energy crops such as switchgrass or hybrid poplar. Energy crops are simulated as part of an explicit agriculture-land-use model with endogenously determined land-use change emissions [2,3]. Energy prices are endogenously determined. *

Corresponding Author: [email protected].

Revised - 5/12/06

Smith, Brenkert, and Edmonds

To examine the potential role of combined biomass and carbon dioxide capture and geologic storage (CCS) systems (biomass CCS) we have introduced this new technological choice into the ObjECTS MiniCAM. With this addition we can self-consistently examine the role of biomass CCS within a regionally disaggregated global energy system while also accounting for the land-use interactions that accompany increases in biomass production. The implementation of biomass CCS technologies required some methodological improvements to the model. The use of biofuels in combination with CCS technology is different that most other energy technologies in the ObjECTS MiniCAM in that a joint product is produced. A biomass-CCS power plant would produce both electricity and captured carbon dioxide. In the reference case, only electricity has economic value. However, we consider policy regimes in which carbon also has economic value. In our policy cases we apply a carbon price to the release of CO2 into the atmosphere. We also credit the net removal of CO2 from the atmosphere. The value of a ton of net CO2 removal is assumed to be the same as, but opposite in sign to, the price of CO2 release into the atmosphere. Thus, in our policy exercise biofuel use in power generation in conjunction with CCS generates two revenue streams—one from the sale of electricity, and another from the capture and storage of CO2. The relative contribution of each revenue stream depends on the relative values of carbon and electricity. If the price of carbon is sufficiently high relative to electricity, CO2 capture can be the dominant source of revenue to the activity. That is, the carbon credit can, in principle, become arbitrarily large relative to the price of electricity. This property required the development of a new methodology for calculating market penetration of this technology. Instead of determining market shares on the basis of relative cost alone [4], we shift to a formulation that focuses on net profitability. The new formulation uses the profit rate for each technology,: Π = (Pelec + CarbCredit/GJ)/(Cost/EJ),

(1)

where Π is the rate of profit for the power generation technology, Pelec is the price paid for electricity per GJ, CarbCredit/GJ is the carbon credit revenue per GJ of electricity production, and Cost/GJ is the total cost per GJ of electricity produced. CarbCredit/GJ is non-zero only for biomass CCS power plants. That credit is equal to the amount of carbon sequestered per unit of electricity produced times the carbon price. The result of using this adjusted value is that biomass CCS plants are increasingly competitive as the carbon price increases. The credit given for carbon dioxide storage is assumed to be passed on to electricity consumers through lower electricity prices. Direct to CCS Technology It is also possible to combust a biofuel, capture, and then store carbon dioxide without producing electricity. In effect it can be used as a general atmospheric CO2 scrubber. Such a system could be profitable if the price of carbon were sufficiently high. Whether or not that technology would ever be deployed is a technological and economic question and depends on the price of carbon, the price of the biofuels input, and the capital and non-energy costs of the technology. An example of such an application might be a biomass gasification CCS plant located in a remote region, above a suitable geologic storage reservoir. The competition between direct biomass CCS plant and a plant also producing electricity was derived on the basis of the return to investment. This option was implemented in the model by assuming that dedicated biomass disposal plants can be implemented at a capital cost investment per unit biomass consumption that is α times less expensive than the equivalent biomass CCS electric generation plant. Without the additional costs associated with the electric turbine systems the biomass “direct to CCS” plant will always be less expensive in terms of capital expenditure per unit biomass processed than a similar plant that also generates electricity. In the simulations performed for this paper direct disposal plants did not play a large role for the range of carbon prices found in the simulations.

Biomass With Carbon Dioxide Capture and Storage In a Carbon Constrained World

Scenario Description and Technology Cases The driving population and GDP assumptions used for these scenarios are from the SRES B2 scenario, as implemented in [5]. This scenario can be described as “dynamics as usual”, with substantial, but not revolutionary, developments in technologies and energy-use patterns over the century. Hydrogen was not deployed as an end-use energy carrier in these scenarios. In the reference case no climate policies beyond those already in place are assumed to be undertaken, and those in place are assumed to expire in 2012. This admittedly unrealistic case is used for contrast to other cases in which CO2 concentrations are limited at levels ranging from 450 ppmv to 750 ppm. We consider five technology scenarios: no-CCS, fossil CCS, and three biomass CCS cases. CCS technology is not available in the no-CCS case. The Fossil CCS case assumes global deployment of CCS technologies for coal, gas, and oil fired electric generation plants. The CO2 removal fraction for coal IGCC plants is 90% in 2020 and increases to 95% by 2095. We consider three cases for biomass sequestration technologies. In all cases where biomass CCS technologies are assumed, fossil CCS technologies are also available. The first case considers large, oxygen blown systems with CO2 removal fractions of 90% or greater, labeled “Biomass & Fossil CCS”. The CO2 removal fraction is taken to be the same as that assumed for coal IGCC plants. The relative cost of these facilities as compared to coal IGCC plants is taken from Larson et al. [6]. This represents large plants with capacities of about 400 MWe. This is the most optimistic scenario where technical hurdles such as methods of supplying large amounts of biomass to a high pressure gasifier have been surmounted. The second case is labeled “expensive Bio CCS”. This is similar technology, with 50% higher costs and a slightly smaller electric conversion efficiency. This could represent, for example, smaller oxygen blown plants that are sized to consume biomass from a limited agricultural area. The third case is a atmospheric pressure steam-blown system of the type examined by Rhodes and Keith [7]. We assume a 44% carbon dioxide removal fraction (the system without steam reforming from [7]), with this value increasing to 45% by 2095. In order to examine the effect of biomass CCS specifically, assumptions for all other technologies are identical for each of the three biomass cases. In all cases IGCC technologies are assumed to be available globally, and other technologies such as wind and solar, also exhibit improvements. The model includes separate technologies for fossil and biomass conventional, IGCC, and CCS electric generation plants.

Results We examine a number of policy scenarios where global emissions of carbon dioxide are constrained to follow a path leading to stabilization of atmospheric concentrations. Concentration targets ranging from below 500 to 700 ppmv are examined. For each CO2 concentration the model is constrained to follow a prescribed emissions pathway derived using the Wigley, Richels and Edmonds [8] methodology. Concentration targets ranging from below 500 to 750 ppmv are used. For these policy cases the model is constrained to follow a specified emissions pathway. The price of vented carbon emissions is adjusted in each period until global emissions of carbon dioxide are equal to the constraint. All regions are assumed to participate in emissions mitigation throughout the century and all energy production and end-use sectors are assumed to face the same price of carbon. These idealized assumptions produce unrealistically low estimates for present discounted costs, but in this study it is the relative effect of technology availability that is of interest, not the absolute measure of cost. At low biomass prices, biomass is supplied through waste and feedstock sources. As biomass prices increase, however, biomass is also supplied by growing dedicated energy crops. With more land dedicated to agricultural activities this can result in larger net deforestation emissions from land-use 3

Smith, Brenkert, and Edmonds

Figure 1 — Total cost of the carbon policy (in $2005) discounted at 5% to the year 2005 for the five technology options considered in this paper.

conversion. This feedback is included in the model which means that the same net energy system emissions pathway can result in different CO2 concentration projections. To account for these differences, results will be presented in terms of the realized stabilization target. While ignoring the value of terrestrial carbon stocks is consistent with the present policy architecture, it leads to an economically inefficient technology choice. Namely it will result in more land allocated to bioenergy production and more land-use CO2 emissions than is consistent with the minimum cost of limiting CO2 concentrations to prescribed levels. Future work will examine the effect of fully costminimizing regimes that consistently value terrestrial carbon stocks as well as fossil fuel and industrial CO2 emissions. The total discounted costs for each option as a function of the realized CO2 concentration target are shown in Figure 1. As found by previous analysis[9], the addition of fossil fuel technologies with CCS dramatically lowers the cost of a stabilization policy. The cost of the policy rises steeply as lower targets are approached. We find here that the addition of biomass CCS technologies lowers the cost still further. In the biomass CCS plus fossil CCS case carbon prices do not exceed $200/Tonne ($2005 USD) except for targets below 500 ppmv. The effect of adding biomass CCS increases with the stringency of the target. The cost of the policy with biomass CCS is 70% of the fossil CCS only case for a 650 ppmv target. The difference increases to 40% for a 450 ppmv target. We have tested the sensitivity of these results to the technical performance of the biomass-CCS technology combination. Making biomass CCS technologies more expensive has a relatively small effect on overall costs. The increased capital costs assumed in this case are outweighed by the value of the net negative emissions from biomass CCS. The atmospheric steam-blown technology is not nearly as effective in decreasing costs due to its lower CO2 capture efficiency. Biomass consumption is higher for this technology as compared to the other biomass CCS cases considered. This drives up biomass prices and reduces the net economic benefit of this technology.

Biomass With Carbon Dioxide Capture and Storage In a Carbon Constrained World

Biomass CCS only supplies a portion of total electricity demand in these scenarios. The fraction increases with the stringency of the climate policy. In the most stringent policy scenario with biomass and fossil CCS, the biomass CCS technology supplies 31% of global electricity demand by the end of the century.

Conclusions We find that biomass CCS technologies deployed in electric generation plants could significantly lower the costs of a climate policy. This result is consistent with recent studies by other modeling groups [10,11], although some of the mechanisms identified differ between studies. While biomass with CCS is a more expensive option as compared to fossil CCS [12] if the value of the sequestered carbon is not considered, this relationship will change if the value of the sequestered carbon is credited to the biomass CCS plant. In addition, much of the value of this technology lies in the negative emissions produced, which allow more expensive mitigation options to be forgone. We find that the benefits are largest for biomass IGCC plants with high CO2 capture efficiency, such as oxygen-blown plants comparable to those considered for coal IGCC with CCS. The benefits are significantly reduced if the biomass CCS plants have lower CO2 capture efficiencies. The achievement of these benefits depends on a number of conditions. First CCS technologies would need to be developed and deployed on a very large scale. In addition to the technological hurdles that would need to be surmounted for IGCC and CCS technologies in general, biomass IGCC with CCS poses some additional issues. Biomass has different gasification characteristics and issues associated with gas cleaning [13] and feed to pressurized systems [6,13] would need to be resolved. The success of this technology depends on the ability to produce and utilize biomass on a large scale in a sustainable manner. Biomass consumption in these scenarios ranges up to 350 EJ per year globally for the fossil plus biomass CCS case presented here. It is not clear if biomass can be used at this scale. More limited production of biomass, for example focusing on waste and residue streams, would still have significant value, particularly if this biomass can be used in a manner that allows a high CO2 capture efficiency. A fuller examination of the potential for growing biomass crops on a large scale and the potential impacts of this activity on deforestation, water-use, production energy demands, and the carbon-cycle is needed to fully evaluate biomass CCS technologies. As with fossil CCS technologies, the use of biomass CCS also requires the capture and secure geologic storage of large amounts of carbon dioxide. Biomass CCS in these scenarios results in the geologic storage of even larger amounts of carbon dioxide than in the scenarios with fossil CCS only. Substantial demonstration and deployment issues would need to be addressed to achieve this scale.

Acknowledgements The authors would like to thank our colleagues at the Joint Global Change Research Institute (JGCRI) for helpful discussions, and James Dooley for helpful comments on the paper. This work was funded by the US Department of Energy Office of Science as part of JGCRI’s Global Technology Strategy Program. Any conclusions are solely those of the authors.

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