|Photos by Dennis Schroeder / NREL, Iberdrola Renewables, Inc., U.S. Department of Energy|
Wind and solar power were once considered expensive and were not widely deployed. Today, skeptics say the same about technology to capture, use and store carbon dioxide emissions (CCUS or carbon capture).
So what lessons can we draw from the experience of the wind and solar industries as they’ve become more mainstream to facilitate a faster and broader deployment of carbon capture technology?
The cost of wind energy has declined by more than 60 percent since 2009 and average nameplate capacity increased 180 percent between 1998-99 to 2015. These improvements have led to an installed wind capacity of 74,821 MW in the United States, enough electricity to power nearly 20 million average U.S. homes every year.
These wind energy milestones in cost reduction, performance improvements, and scale of deployment were supported by the Production Tax Credit (PTC), a federal deployment incentive. It’s reasonable to assume that the PTC would have been even more successful if it had been maintained consistently instead of experiencing periods of uncertainty regarding its fate, leading to boom-and-bust wind power development cycles.
Ongoing federal research and development (R&D) also spurred improved wind industry technology. For example, in 2007, the National Renewable Energy Laboratory initiated the Gearbox Reliability Collaborative in response to industry-wide technology challenges. That research led to improved gearbox designs, reducing the overall cost of wind energy and showing how collaborative industry efforts and federal support for R&D can resolve performance challenges.
Solar photovoltaic (PV) technologies experienced similar dramatic cost declines due to economies of scale and improved manufacturing and performance. The cost of utility-scale solar has fallen more than 54 percent since 2011. The efficiency of all PV cells steadily improved between 1975 and 2010, supported by multi-decade R&D programs like the Department of Energy’s Thin Film PV Partnership.
These cost declines and performance improvements were facilitated by the Investment Tax Credit, another federal deployment-focused incentive, and the Section 1603 Treasury program, a federal loan guarantee mechanism to support project financing. Strong state policies like the California Renewables Portfolio Standard enabled developers to enter into above-market power purchase agreements. The experience of utility-scale solar PV demonstrates that overlapping policies are essential to achieve financing for first-of-a-kind projects.
Lessons for carbon capture
We can draw three key conclusions from wind and solar energy’s experience:
- Stable, long-term deployment incentives that build on previous public and private investments in technology research, development and demonstration (RD&D) are essential to facilitate a large volume of projects;
- As more projects are deployed, costs are reduced through economies of scale, learning from experience, and technological innovation;
- Ongoing government support for RD&D can deliver cost reductions by supporting innovation and overcoming performance challenges.
In contrast to wind and solar, the U.S. lacks an effective federal incentive for commercial deployment of CCUS—despite being a world leader in public and private RD&D for early stage technology demonstration. Fifteen commercial-scale CCUS projects are operating globally; eight of those are in the United States. But that’s not nearly enough to meet our mid-century climate goals.
Carbon capture can be used at coal- or natural gas-fired power plants, which are baseload generation resources. It’s also the only way to reduce carbon emissions from some industrial plants, such as facilities producing chemicals, steel, and cement. Also, over the long-term, we’ll need to integrate biomass energy systems with carbon capture (BECCS). Combining the capture of photosynthetic carbon from biomass with CCUS can enable negative emissions.
While first-of-a-kind, commercial-scale CCUS projects are expensive, we know that as more projects come online, they will become cheaper. SaskPower estimates it could cut costs by up to 30 percent on the next unit to be retrofitted following its current experience operating the world’s first commercial-scale, coal-fired power plant carbon capture project. Developers are exploring novel approaches, including the Exxon and Fuel Cell Energy partnership and the Exelon-supported NET Power project, that have the potential to reduce costs still further.
It’s essential to extend and expand tax incentives for carbon capture, update state laws to include CCUS technology in clean energy standards, and fund continued carbon capture RD&D, among other things, if we are going to reach our emissions-cutting goals.