Cost Analysis for CO2 Reduction Pathways

Abstract

It has been widely acknowledged that addressing the issue of climate change should focus on reducing, and ideally eliminating, the influx of CO2 to the atmosphere. This has led to the emergence of various CO2-reducing technologies, which differ in their economic and environmental performances. Considering only one side of the problem may be misleading, so this work introduces a novel high-level cost analysis methodology which assesses the different CO2 reduction options based on CO2 marginal abatement cost - MAC (an indicator that integrates environmental and economic performances). The study contributes to the existing literature by accounting for the impact of the temporal variations in power demand and renewable energy sources on the MAC of the considered options. The proposed approach is demonstrated through an analysis that explores integrated pathways for CO2 reduction through CCUS technologies and renewable energy technologies. Energy storage is considered for the intermittent renewable energy options. The results for the different scenarios are combined on a Mini-MAC curve, a recently developed cost analysis tool for planning CO2 reduction pathways, in which significant insights on the economics of the CO2 reduction are demonstrated and analyzed.