Technology can create cheaper, cleaner energy
Professor Zheng Li, Director of the Tsinghua BP Clean Energy Research and Education Center at Tsinghua University, describes energy choices and constraints for China, including prospects for carbon capture and storage
The power sector offers greater scope than the transport sector for reducing carbon emissions.
The power sector offers greater scope than the transport sector for reducing carbon emissions, at a comparatively low cost of carbon. It currently accounts for 38% of world primary energy demand, with gas and coal-fired power generally most competitive, but we expect wind and solar to continue reducing costs at around 14% and 24% respectively per doubling of installed capacity, consistent with past performance. Without a carbon price, gas and coal will remain the cheapest sources of electricity. However, with even a relatively modest carbon price of $40 per tonne of CO2, gas gains an advantage over coal. At higher carbon prices, wind and solar power become more competitive, providing there is sufficient back-up capability.
Levelized cost of electricity* in North America to 2050
Note: No commercial scale carbon capture and storage (CCS) power plants existed in 2012. Assumptions: Coal at $80/tonne, gas at $5/mmBtu and pelletized biomass at $80/tonne. *1$ 2012 per megawatt hour.
The chart shows the costs of generating electricity in North America from different fuel feedstocks – ignoring all taxes and other duties. Technology advances are expected to bring down the costs of most forms of electricity generation by 2050 while a carbon price would increase costs of the higher carbon options.
The chart includes the cost of providing back-up to wind and solar using gas-fired power when the wind is not blowing or the sun is not shining. It also shows that gas-fired power plants fitted with carbon capture and storage to sequester the carbon emissions below the ground can become competitive with an $80 per tonne carbon price by 2050.