Joining the CCS Club! Insights from a Northwest European CO2 Pipeline Project

The large-scale diffusion of Carbon Capture and Storage (CCS) imposes the construction of a sizeable CO2 pipeline infrastructure. This paper analyzes the conditions for a widespread adoption of CCS by a group of emitters that can be connected to a common pipeline system. It details a quantitative framework capable of assessing how the tariff structure and the regulatory constraints imposed on the pipeline operator impact the overall cost of CO2 abatement via CCS. This modeling framework is applied to the case of a real European CO2 pipeline project. We find that the obligation to use cross-subsidy-free pipeline tariffs has a minor impact on the minimum CO2 price required to adopt the CCS. In contrast, the obligation to charge non-discriminatory prices can either impede the adoption of CCS or significantly raises that price. Besides, we compared two alternative regulatory frameworks for CCS pipelines: a common European organization as opposed to a collection of national regulations. The results indicate that the institutional scope of that regulation has a limited impact on the adoption of CCS compared to the detailed design of the tariff structure imposed to pipeline operators

Capturing industrial CO2 emissions in Spain: Infrastructures, costs and break-even prices

This paper examines the conditions for the deployment of large-scale pipeline and storage infrastructure needed for the capture of CO2 in Spain by 2040. It details a modeling framework that allows us to determine the optimal infrastructure needed to connect a geographically disaggregated set of emitting and storage clusters, along with the threshold CO2 values necessary to ensure that the considered emitters will make the necessary investment decisions. This framework is used to assess the relevance of various policy scenarios, including (i) the perimeter of the targeted emitters for a CCS uptake, and (ii) the relevance of constructing several regional networks instead of a single grid to account for the spatial characteristics of the Spanish peninsula. We find that three networks naturally emerge in the north, center and south of Spain. Moreover, the necessary CO2 break-even price critically depends on the presence of power stations in the capture perimeter. Policy implications of these findings concern the elaboration of relevant, pragmatic recommendations to envisage CCS deployment locally, focusing on emitters with lower substitution options toward low-carbon alternatives

Cooperation among liquefied natural gas suppliers: Is rationalization the sole objective?

This paper examines the development of cooperative strategies between countries exporting Liquefied Natural Gas (LNG) and members of the Gas Exporting Countries Forum (GECF). This economic study focuses specifically on an often-raised scenario: the emergence of a cooperative approach designed with the sole aim of logistic rationalization, and which would not have any effect on LNG prices. We first assess the annual gains that may result from this market-power-free cooperative approach using a simple static transportation model. The numerical results obtained suggest that, in the absence of a gain redistribution policy, this cooperative strategy will probably not be adopted because cooperation would not be a rational move for some exporters. The problem of gain sharing is then formulated using cooperative game theory concepts. Several gain-sharing methods have been studied, including the Shapley value and various nucleolus-inspired concepts. Our results suggest that the choice of a redistribution policy appears relatively restricted. Out of the methods studied, only one – per capita nucleolus – satisfies two key requirements: core belonging and monotonicity (in the aggregate). Lastly, we look at how cooperation may give rise to a coordination cost and try to determine the maximum amount of this cost. In view of the low level of this amount and the relative complexity of the sharing method implemented, we consider that the credibility of a logistic cooperation scenario exempt from market power should be reappraised

2 °C and 1.5 °C scenarios and possibilities of limiting the use of BECCS and bio-energy

This report presents a set of scenarios that limit global warming to below 2 °C and 1.5 °C, by either using full-technology reduction options as included in the IMAGE and POLES models, or by limiting the use of bio-energy in energy production and combining it with carbon capture and storage. Under these scenarios, global emission reductions by 2050 will be between about 50% and 65% for the 2 °C target and 70% to 80% for 1.5 °C, compared to 1990 levels

Model-based assessments for long-term climate strategies

Many countries are formulating a long-term climate strategy to be submitted to the United Nations Framework Convention on Climate Change by 2020. Model-based, multi-disciplinary assessments can be a key ingredient for informing policy makers and engaging stakeholders in this process