Relevancy of Emission Reduction Fund (ERF) policy towards large-scale deployment of carbon capture technology in black coal-fired power plant

Abstract

This study implements a single objective multi-constrained optimisation technique to evaluate the relevance of large scale deployment of post-combustion CO2 capture (PCC) technology as an emissions reduction fund (ERF) ‘project’ for black coal power generation in Australia. We target maximum net operating revenue, by generating forecasts of power plant load and CO2 capture rate, and while subject to the dual operational and environmental constraints. Four different hypothetical Australian Carbon Credit Unit (ACCU) prices ($AU 5, 15, 25 and 50/tonne CO2) are evaluated, through a single objective multi-constrained optimisation algorithm, for a 7-year contract period between 2016 and 2020 and with a 7.1 MT CO2 of emission baseline. The results indicate that at ACCU price of $AU 25/tonne CO2 (Scenario 3), represents a feasible solution for future deployment of PCC technology under ERF project settings. Across the contract period, PCC plant captures 90% CO2 from the power plant emissions with total plant net operating revenue at approximately $AU 1,765 million. The gross revenue gains from ERF incentive and selling of electricity are at 25% and 75% respectively. These findings point to the value of this computational approach for power plant operators in Australia considering low emissions technologies (viz. PCC) as ERF projects, aiding in their short and medium-term planning. Such an approach is extendable to other countries and regions under varying emissions trading schemes.