Electricity costs and carbon emissions, by technology

The European Commission has issued a technical document that rounds up cost and emissions data for the principal electricity generating technologies. It’s likely to be used as a reference document in E.U. energy policy discussions, so let’s see what’s in it.

Alqueva dam, Portugal. The largest dam in Europe, the hydroelectric plant generates 240 MW.	(Ceinturion)

The European Commission document  “Energy Sources, Production Costs and Performance of Technologies for Power Generation, Heating and Transport” ^[1] is a technical supplement accompanying the  Second Strategic Energy Review. It examines the costs and emissions of electricity, heating and transport, but I’ll just stick to the electricity data here. The study is a useful and authoritative data round-up in its own right, but it’s also intended as an information resource in European Union decision making, so it’s likely to be influential whether the numbers are right or wrong. It’s got to be worth a look.

The document lists the costs of electricity in 2007, and calculates the projected costs in 2020 and 2030 under two assumptions, a “moderate fuel price scenario” and a “high fuel price scenario”. It examines the costs and emissions of coal and gas with carbon capture and storage and without. It also factors in a cost for carbon emissions.

The cost figures for 2020 and 2030 are fairly similar (apart from the differing fuel cost assumptions) so I’ll stick with the 2020 values, as these are the most immediately relevant for near-term energy policy.

The key price assumptions are:

• Moderate fuel price scenario:  a barrel of oil costs  61$₂₀₀₅ in 2020;
• High fuel price scenario:  a barrel of oil costs  100$₂₀₀₅ in 2020;
• Carbon costs are charged at €41/tCO₂ in 2020, for CO₂ directly emitted from the facility.

Table 1 shows the costs of electricity projected for 2020 for the principal generating technologies under the “moderate” and “high” fuel price scenarios, and also lists their CO₂ emissions.

Table 1.  Cost of electricity in 2020, and lifecycle CO₂ emissions

Generation technology	Cost of electricity: moderate fuel price scenario (a)	Cost of electricity: high fuel price scenario (b)	Lifecycle CO2 emissions
	€2005/MWhe	€2005/MWhe	kg CO2(eq)/MWhe
Gas: CCGT (c)	65–75	105–115	420
Gas: CCGT (c) & CCS (d)	85–95	130–140	145
Oil: CC (e)	125–135	175–185	585
Coal: PCC (f)	65–80	80–95	820
Coal: PCC (f) & CCS (d)	80–105	100–125	270
Nuclear	45–80 (g)	55–90 (g)	15
Solid biomass	85–200	90–215	21–42
Biogas	50–200	50–200	6–245
Wind: on-shore	55–90	55–90	11
Wind: off-shore	65–115	65–115	14
Hydro: large-scale (h)	30–140	30–140	6
Hydro: small-scale (h)	55–160	55–160	6
Solar: PV (i)	270–460	270–460	45
Solar: CSP (j)	110–160 (k)	130–180 (k)	135 (k)
Data are from ref. [1], Table 2-1 and Table 2-2. The costs are projections for the year 2020. Costs are expressed in constant €(2005) per MWh of net power generated. The cost of electricity assumes a carbon price of €41/tCO2, for CO2 directly emitted from the facility. The highest and lowest values in each column are  highlighted . Notes: (a)  The moderate fuel price scenario assumes that a barrel of oil costs 61$2005 in 2020. (b)  The high fuel price scenario assumes that a barrel of oil costs 100$2005 in 2020. (c)  CCGT means Combined Cycle Gas Turbine. (d)  CCS means Carbon Capture and Storage. (e)  CC means Combined Cycle. (f)  PCC means Pulverised Coal Combustion. (g)  Costs of nuclear include provision for waste management. (h)  For hydro, large scale means greater than 10MWe. Small scale means less than or equal to 10MWe. (i)  PV means photovoltaic. (j)  CSP means Concentrating Solar Power. (k)  Assumes the use of natural gas for backup heat production.

What does it all mean?

On emissions, I brought together nine Life Cycle Analyses of the CO₂ emissions from various electricity generating technologies in the post “Carbon emissions from electricity generation: the numbers”. The European Commission’s emissions estimates are in line with those earlier analyses.

On carbon costs, the report assumes that carbon emissions will be charged at €41/tCO₂ in 2020, rising to €47/tCO₂ in 2030. For context, the Stern Review ^[2] calculated the social cost of carbon emissions to be $85/tCO₂. I’ve looked at that in the post “Energy economics in an era of carbon pricing”.

I’ve highlighted the stand-out numbers in the table, and here are some of the key results:

Large-scale (>10 MW_e) hydroelectric power has the lowest costs in some cases, and the lowest lifecycle CO₂ emissions. Hydroelectric power is already fully exploited in some regions, such as Switzerland, but where unexploited potential remains, for example in Iceland, it’s likely to be a strong contender.

Wind and nuclear have broadly similar costs and CO₂ emissions. Nuclear has similar costs to on-shore wind, and it has similar lifecycle CO₂ emissions to off-shore wind. After hydroelectric power, wind and nuclear have the lowest costs and the lowest emissions.

Sleipner West gas/condensate platform, operated by StatoilHydro, is the first European project to incorporate CCS.

Coal has the highest CO₂ emissions, and the emissions are still very high even with carbon capture and storage. When CO₂ emissions are charged for (at €41/tCO₂), coal is more expensive than on-shore wind and nuclear.

A further problem is that the energy payback ratio for coal with CCS can be very low ^[3]. Coal with CCS achieves an energy payback ratio of only 1.6 when the coal is transported 2000 km (see the post “Energy payback ratios for electricity generation”).

Solar photovoltaic power has the highest projected costs in 2020. On the other hand costs for PV are falling faster than for any other generating technology, and the cost of PV is projected to fall to €170–300/MWh_e by 2030, but even so it will still be the most expensive technology, with the possible exception of oil.

For concentrating solar thermal power, emissions are calculated to be 135 kg CO₂(eq)/MWh_e, because gas is assumed as back-up. Without the natural gas combustion emissions, the indirect emissions alone would be 15 kg CO₂(eq)/MWh_e. The cost calculation assumes that CSP does not carry carbon costs.

To summarise, hydroelectric power has the lowest costs and lowest emissions where it can be implemented, and after that it’s wind and nuclear. Solar PV isn’t projected to be cost-competitive over the next round of energy infrastructure investment.

Related Posts

• Carbon emissions from electricity generation: the numbers
• Energy economics in an era of carbon pricing

References

1. Energy Sources, Production Costs and Performance of Technologies for Power Generation, Heating and Transport, Commission Staff Working Document accompanying the Communication From the Commission To the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Commission of the European Communities, November 13, 2008
2. STERN REVIEW: The Economics of Climate Change, N. Stern, Executive Summary (2006)  (WebCite cache)
3. Civilisation and energy payback, L. Gagnon, Energy Policy 36, 3317–3322 (2008)  (WebCite cache)