ICCS: INSTITUTE OF COMMUNICATION AND COMPUTER SYSTEMS

Energy-Economy-Environment Modelling Laboratory

http://www.e3mlab.ntua.gr Prof. Pantelis CAPROS

mailto:kapros@central.ntua.gr
Address for Correspondence
NATIONAL TECHNICAL UNIVERSITY OF ATHENS
DEPARΤMENT OF ELECTRICAL ENGINEERING
9, Iroon Polytechniou Str.
15773 Zografou Campus-Athens, Greece

10/Oct./2007

Energy Systems Analysis of

CCS technology
PRIMES MODEL SCENARIOS

P. Capros
L. Mantzos
V. Papandreou
N. Tasios
A. Mantzaras
17-Sept.-2007

Energy Systems Analysis of CCS

technology
PRIMES MODEL SCENARIOS

This is a short note summarising the results of energy systems scenarios quantified with the PRIMES
model which were designed in order to analyse the possibilities and the implications of the deployment of
Carbon Capture and Storage technology in Europe.

Objectives of the Study

Capture of carbon dioxide is expected to be possible in power generation plants through specialised
equipment. Then emissions of CO2 would be avoided by transporting and storing it underground.

The CCS is one of the possible means for reducing emissions of CO2 from the combustion of fossil fuels.
When an emission reduction target is set, the CCS competes with other means, such as carbon free power
generation (renewable energies, nuclear), the fuel switching and the reduction of energy consumption.

The CCS is not yet a fully commercial technology and only some pilot plants are currently under construc-
tion. Although the enabling technologies are well known, their optimal mounting at the level of a large
scale power plant still involves uncertainties regarding technical performance and cost. In addition, un-
certainties also exist regarding the infrastructure of transportation and storage. Reaching maturity of CCS
technology can be accelerated if there is confidence about the prospects of large scale deployment of CCS
applications in the future.

The power plants with carbon capture will be more expensive in terms of capital investment and opera-
tion costs than similar plants without carbon capture. Also their net thermal efficiency will be lower, since
carbon capture needs energy to operate.

Therefore it is possible that investors might over-invest in conventional thermal power plants before the
anticipated date of possible CCS enforcement. In such case, the over-investment in non-CCS plants will
imply lower needs for new power plants when the CCS technology will be mature. This would discourage
efforts and investment to improve the CCS technology and to create the necessary infrastructure, so it
would delay CCS deployment.

Two policy measures are under consideration for addressing the above mentioned problems:

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A. Enforcing mandatory CCS for new fossil-fuel power plants commissioned by 2020 and beyond
B. Obliging all new fossil-fuel power plants to be built as capture-ready plants if commissioned be-
tween 2015 and 2020 and then to be retrofitted with CCS after 2020.

Both measures aim at increasing confidence about the prospects of CCS technology and its future market
potential. The second measure aims at avoiding possible lock-ins due to investment in non-CCS technol-
ogy.

It is also questionable whether to apply these measures only on new coal and lignite plants (case-1) or
also on new gas-firing plants (case-2).

To perform impact assessment of the above policy issues, it is necessary to simulate the entire energy
system under different assumptions regarding the general policy context in relation to emission reduc-
tion targets and also under varying policy enforcements concerning the CCS technology. The simulation
has to represent the economic decisions of the power system investors and also the interaction with con-
sumers through the formation of energy market prices. The impact assessment consists in comparing the
results of simulations, in terms of costs and benefits, with a baseline.

Short overview of the model PRIMES

The model PRIMES simulates the European energy system and markets on a country-by-country basis
and provides detailed results about energy balances, CO2 emissions, investment, energy technology pene-
tration, prices and costs by 5-years intervals over a time period from 2000 to 2030.

The current version of the model PRIMES include extensive representation of power generation technolo-
gies and incorporates detailed information about future power plants enabled with carbon capture proc-
essing. In addition, the costs of transporting and storing CO2 are modelled through non linear cost curves
by country. So the PRIMES model has the possibility to perform integrated policy analysis and scenario
building about CCS following a systemic and market equilibrium approach.

The model establishes a complete linkage between supply and demand for energy with endogenous price
formation. This allows CCS policies to be assessed ensuring consistency of CCS deployment within market
equilibrium. Bottom-up and engineering oriented information about CCS is also included at a sufficient
level of detail. The latest version of PRIMES has also the possibility to reflect alternative policies and regu-
lations that aim at promoting CCS deployment, including the eventual imposition of “capture-ready” obli-
gations for power plant investment.

The model is designed to handle climate change targets, with representation of various possible policy
instruments, and so provide impact assessment of CCS deployment within the context of specific CO2
emission reduction targets.

The technical and economic data of the PRIMES model have been recently updated and revised (end
2006). The revised data, including the CCS related data, reflect new information generated from the EC
Technology Platforms. Regarding CCS, the data reflect the “Zero Emission Platform” and have been sup-
plied to PRIMES by VGB within the context of a large model-based study recently published by Eurelec-
tric (“The Role of Electricity” project, published beginning of 2007).

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The CCS investment decisions are integrated within the PRIMES sub-model on power and stem genera-
tion. The CCS technology for power plants is represented in two ways:

a) as typical new power plants enabled with CCS which are considered as candidate for investment;
b) as typical technologies that are candidate for retrofitting existing power plants or plants built
(endogenously by the model) without having initially the CCS.

This flexible representation allows assessment of various policy options, as for example the “capture-
ready” options or the mandatory CCS measures.

The CCS decision is part of the economic model which simulates the investment and plant operation be-
haviour of power producers within the electricity market being in interaction with demand behaviours
and with upstream suppliers of fuels. The standard version of PRIMES’ power sector sub-model repre-
sents an intertemporal profit optimisation which drives plant investment and operation. The optimisation
is constrained by existing capacities, technical restrictions and eventually policy reflecting obligations.
The optimisation takes into account non linear cost supply curves of resources used for power generation,
as for example for fuels, renewables, sites for nuclear investment, cost of storage of CO2 captured, etc.
These cost supply curves incorporate information about the maximum potential of the resources and their
decreasing returns of scale associated with their rate of use. The dynamics of investment are flexible and
the model provides multiple alternatives, as for example the retrofitting of old plants, the replacement of
an old plant on an existing site, the extension of old plants, the choice of auxiliary equipment (CHP, CCS,
FGD, SCR, etc. for various purposes) and of course the possibility to build new plants in new sites.

The model represents more than 200 typical alternative technologies for power generation. Their techni-
cal-economic characteristics are assumed to change over time and their rate of change may be influenced
by learning by doing (or research) effects. The power system model incorporates fully the CHP technolo-
gies, district heating and the industrial boilers, as well as the distribution of electricity, steam and heat.

Since the economic optimisation is carried out on an intertemporal basis, trade-offs over time are possi-
ble; for example referring to the timing of use of exhaustible resources or the timing of investment in an
evolving technology.

The power system economic decisions interact with price elastic demand behaviours through the market
integrating sub-model of PRIMES. In fact, power system decisions are followed by endogenous computa-
tion of electricity, steam and heat tariffs which further influence the decision of consumers about their
demand of various energy forms. The latter decisions are simulated through a series of demand-oriented
models which combine top-down econometric modelling with bottom-up choice of appliances and proc-
essing technologies within the demand sectors. So, a closed loop is established between demand for en-
ergy and supply of energy, which clears the market as a result of adjusting energy prices.

Hence, a multitude of factors influencing directly or indirectly CCS deployment is already incorporated in
the PRIMES model: fuel prices and price-volume relationships, RES energy form cost-potential, cost-
potential curves of CO2 storage, old capacities and investment commitments, potential of developments
in existing sites, dynamics of change of technical-economic characteristics of candidate power technolo-
gies (including learning effects), system operation in relation to fluctuating demand and the supply of
steam/heat from CHP or boilers, etc.

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Scenario Design
The Scenario taken as reference for the impact assessment is the Baseline scenario built by using the
PRIMES model for DG TREN as finalised in the beginning of July 2007. The Baseline scenario projects
the trends in energy markets and technologies without assuming any new policy beyond those put in place
in the past. The Baseline scenario, although incorporating an EU ETS carbon price of 22 Euro/tCO2 does
not deliver the desired emission curbing targets nor the renewables target. The decisions of energy de-
manders and producers are driven only by economic considerations. In the absence of an ambitious emis-
sion reduction target and policies, it is logical that in the Baseline scenario the projection by the model
PRIMES does not show any investment in Europe in power plant with CCS technology.

Without altering any of the assumptions within the Baseline scenario, two variants are built in order to
assess the implication of imposing mandatory CCS beyond 2020:

a) The Base-CCS1 scenario which assumes that the CCS equipment is mandatory for all new coal,
lignite (and residual fuel oil) power plants commissioned after2020
b) The Base-CCS2 scenario which assumes that the mandatory character of CCS also applies on new
gas-firing plants.

It is assumed that this enforcement is not applicable on small scale gas and oil power plants, like the peak
devices, the internal combustion engines and the small scale CHP plants. The measure is also not applica-
ble on biomass thermal plants (co-firing of biomass in coal plants is not considered as a reason for exemp-
tion).

Two scenarios which deliver the emission reduction target are built by using the PRIMES model. The tar-
get consists in limiting GHG emissions in 2020 in the EU-27 to a level 20% lower than total emissions in
1990. These scenarios do not assume the enforcement of mandatory CCS, so the CCS technology emerges
only as a result of economic decisions of power system investors. The emission reduction scenarios are
defined as follows:

a) The CVtar scenario considers only the emission reduction target and does not seek to reach the
renewables target
b) The RVCVtar scenario considers both the emission and the renewables targets, the latter being
defined as 20%energy from RES over total final energy demand in the EU27.

Both scenarios impose the targets as constraints applicable on the EU-27 taken as a whole and assume
that the changes required to meet the constraints are driven by the energy markets. Consequently, all eco-
nomic decisions of demanders and producers of energy(also those that are concerned with non CO2 GHG
emissions) are taken by considering a shadow price of emissions and a shadow price of RES (in the second
scenario) which are set at the level needed to meet the constraints. Evidently, optimality is reached when
all agents face exactly the same shadow prices and their level is such that the constraints are exactly met.

Two variants of the above two emission reduction scenarios are built. The first variant assumes that the
implementation of the emissions and RES constraints is made through a perfect grandfathering system
operating under perfect competition which does not allow passing through to consumers opportunity
costs but only true direct or indirect costs. This variant is noted as Case-G. The second variant assumes
that the emissions allowances are purchased by the agents in perfect public auctions (Europe-wide) and

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that the revenues from the auctions constitute public income which is spent outside the energy system.
His variant implies that consumer prices reflect the auction clearing price. Of course the two variants cor-
respond to the two more extreme situations regarding the implementation of the emission constraint.

By combining the above mentioned scenarios, four cases are quantified by using the PRIMES model:
CVtar-G (grandfathering and GHG), CVtar-A (auctioning and GHG), RVCVtar-G (grandfathering, GHG
and RES), RVCVtar-A (auctioning, GHG and RES).

In all the scenarios meeting the targets (GHG and/or RES), CCS technology deploys as a result of market
operation on the basis of economic decisions of the agents. As variants of these scenarios, scenarios as-
suming the CCS mandatory enforcements, first only on coal and lignite power plants (and fuel oil) and
second also on gas plants, are further quantified. So, scenario variants that combine mandatory CCS with
emission reduction and RES constraints are built.

Additional scenario variants are also built by assuming that in addition to the mandatory CCS, the power
plants commissioned in the period from 2015 to 2020 have to be “capture-ready” and have to be retrofit-
ted with CCS after 2020. These variants are built only for the auctioning cases.

The following table summarises the definition of scenarios:

20% GHG emis- RES 20% Mandatory CCS Cap- Additional Assump-
sion reduction of final ture- tion
Grand- Auc- demand Coal - Coal - ready
father- tioning Lignite Lignite obli-
Scenarios ing - Gas gation
1 Baseline NO NO NO NO NO
2 Base-CCS1 NO NO NO YES NO No climate or RES
3 Base-CCS2 NO NO NO YES NO targets
4 CVtar-G YES NO NO NO
No RES target
5 CVtar-A YES NO NO NO
6 RVCVtar-G YES YES NO NO
7 RVCVtar-A YES YES NO NO
8 RVCVtar-G-CCS1 YES YES YES NO
9 RVCVtar-G-CCS2 YES YES YES NO Climate and RES tar-
10 RVCVtar-A-CCS1 YES YES YES NO gets
11 RVCVtar-A-CCS2 YES YES YES NO
12 RVCVtar-A-CCS1R YES YES YES YES
13 RVCVtar-A-CCS2R YES YES YES YES
Further Sensitivity analysis Cases
14 RVCVtar-A-CCS2N YES High storage cost in
new MS
15 RVCVtar-A-CCS2Nuc YES High Nuclear
16 RVCVtar-A-noCCS YES No CCS
17 RVCVtar-A-subs YES 10% subsidy on CCS
capital cost

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The PRIMES model runs extend to the time period beyond 2020 and until 2030. The emission reduction
targets and the RES targets are assumed to increase in percentage terms after 2020 and regarding the
emission reach 30% less than in 1990.

The scenarios 4 to 13 are constructed so as to reach the two policy targets, namely the limitation of GHG
emissions in 2020 at a level 20% lower than in 1990 and the penetration of renewable energy up to 20%
of final energy demand by the same date. The model considers the two policy targets as binding and de-
termines the shadow prices of GHG emissions and renewable energy that are needed to reach both targets
simultaneously. It is assumed that perfect markets prevail with respect to the two European-wide con-
straints and that an efficient allocation of effort is reached by equalizing both shadow prices across all
member-states and across all sectors of the economy. The shadow prices are termed “carbon value” for the
GHG emission constraint and “renewable value” for the renewables penetration constraint.

The sensitivity analysis cases 14 to 17 also aim at meeting the emission and renewable targets. Scenario 14
is based on scenario 13 but in addition it evaluates the implications of facing high carbon storage costs in
the Eastern European countries. This case reflects uncertainty about carbon storage cost, since the
PRIMES database (based on ECN-TNO data) includes relatively low storage costs on the new MS based
on low costs aquifers that are seemingly available for carbon storage in theses countries. Scenario 15 is a
sensitivity case based on scenario 13 but in addition it assumes that nuclear policies change from baseline
conditions and provide for a) cancelling the phase-out in three member-states without allowing new in-
vestment, b) extension of lifetime of old nuclear plants in all MS, c) no change of nuclear policies in MS
that did not opt for nuclear power. Scenario 16 assumes that CCS is not allowed to develop while the emis-
sions and renewables targets remain valid. Finally, scenario 17 is a sensitivity case of scenario 5 which
assumes that capital costs of CCS power plants (including CCS retrofitting) is subsidized at a level of 10%.

The PRIMES model has determined the following carbon values and renewables values for the scenarios.
The table also shows the resulting CO2 emissions and energy from renewables.

EU27 Carbon Value in Euro Renewable Value in Total CO2 Emissions from Total Renewables (Mtoe
per t CO2 Euro per MWh Energy (Mt CO2) primary)
Scenarios 2020 2025 2030 2020 2025 2030 2020 2025 2030 2020 2025 2030
1 Baseline 22.0 23.0 24.0 0.0 0.0 0.0 4247 4315 4284 196 216 236
2 Base-CCS1 22.0 23.0 24.0 0.0 0.0 0.0 4229 4277 4159 195 219 246
3 Base-CCS2 22.0 23.0 24.0 0.0 0.0 0.0 4212 4244 4138 197 219 242
4 CVtar-G 53.2 56.8 60.4 0.0 0.0 0.0 3432 3318 3005 197 218 240
5 CVtar-A 50.8 54.2 57.6 0.0 0.0 0.0 3419 3301 3012 197 217 240
6 RVCVtar-G 42.0 44.9 47.7 39.0 45.5 48.8 3387 3264 3042 274 315 349
7 RVCVtar-A 40.4 43.1 45.9 38.0 44.3 47.5 3367 3260 3095 273 314 347
8 RVCVtar-G-CCS1 42.0 44.9 47.7 39.0 45.5 48.8 3382 3254 2949 274 315 349
9 RVCVtar-G-CCS2 42.0 44.9 47.7 39.0 45.5 48.8 3372 3251 2876 274 315 350
10 RVCVtar-A-CCS1 40.2 42.9 45.6 38.0 44.3 47.5 3372 3264 2973 273 314 348
11 RVCVtar-A-CCS2 40.3 43.0 45.7 38.0 44.3 47.5 3360 3269 2906 273 314 349
12 RVCVtar-A-CCS1R 38.0 40.6 43.1 38.0 44.3 47.5 3346 3194 2937 273 314 348
13 RVCVtar-A-CCS2R 37.8 40.3 42.8 38.0 44.3 47.5 3347 3182 2843 273 315 349
14 RVCVtar-A-CCS2N 40.3 43.0 45.7 38.0 44.3 47.5 3365 3284 2964 273 314 349
15 RVCVtar-A-CCS2Nuc 40.3 43.0 45.7 38.0 44.3 47.5 3272 3185 2865 273 314 348
16 RVCVtar-A-noCCS 41.0 44.3 67.0 38.0 44.3 47.5 3367 3256 2925 273 314 349
17 RVCVtar-A-subs 40.4 43.1 45.9 38.0 44.3 47.5 3373 3261 3045 273 313 347
Source PRIMES

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Assumptions about the CCS technology

The PRIMES database includes three generic carbon capture technologies, namely capture at post-
combustion stage, capture at pre-combustion stage and the oxyfuel technology (which consists in burning
with oxygen instead of ait). The generic carbon technologies apply to a series of power plant technologies,
including conventional steam turbine plants, supercritical steam turbine plants, fluidized bed combustion
plants, integrated gasification combined cycle and gas turbine combined cycle plants.

The PRIMES model distinguishes between plants with CCS which are built as CCS plants from the begin-
ning and the possibility of adding auxiliary CCS equipment on plants that when built had not CCS capabil-
ity. The costs, the performance and the technical possibilities differ in these two cases.

Generally the CCS plants have higher costs and lower thermal net energy efficiency than the correspond-
ing plants without CCS (see Table 1).

The levelized total unit cost of power generation from CCS plants (including capital costs and assuming
operation at 7000 hours per year) is between 15 to 25 €/MWh up from the corresponding power plants
without CCS (from 25% to 50% higher total unit cost of generation). Consequently the cost of CO2 abate-
ment ranges between 25 and 45 €/t CO2 avoided. The present scenarios assume relatively high gas prices
and so the gas-based CCS plants are found less competitive than the plants using coal and lignite. The
weighted average cost of capital is basically 8.7% but for new technologies it is assumed that an additional
risk premium applies. For CCS plants, the risk premium is assumed to be around 5% in 2020 and goes
down to 1% in 2030, except the oxyfuel technologies for which the risk premium is assumed to stay at
3.5% in 2030 before going down to 1% by 2035.

Table 1: Summary of technicoeconomic data of carbon capture technology for thermal power plants

Difference from non CCS plant

Net
Capital Cost Net Thermal Non fuel Variable CO2
Fixed Cost (€/kW)
(€/kW) Efficiency (rate) Cost (€/MWh) avoide
d
Constant Euros of 2005 2020 2030 2020 2030 2020 2030 2020 2030
Pulverised Coal Supercritical CCS post combustion 894 833 -0.12 -0.12 7.0 6.9 0.5 0.5 83.5% 3.46
Pulverised Lignite Supercritical CCS post combustion 882 819 -0.11 -0.11 7.0 6.8 0.5 0.5 83.5% 3.64
Fuel Oil Supercritical CCS post combustion 894 833 -0.13 -0.13 7.0 6.9 0.5 0.5 83.3% 2.81
Integratedl Gasification Fuel Oil CCS pre combustion 559 558 -0.07 -0.07 14.9 14.4 2.0 1.9 89.4% 3.58
Pulverised Coal Supercritical CCS oxyfuel 685 655 -0.09 -0.09 7.6 7.5 2.0 1.9 99.4% 3.92
Pulverised Lignite Supercritical CCS oxyfuel 666 635 -0.08 -0.08 7.7 7.5 2.0 2.0 99.4% 4.13
Integrated Gasification Coal CCS post combustion 797 776 -0.07 -0.07 14.9 14.4 2.0 1.9 85.7% 3.46
Integrated Gasification Coal CCS pre combustion 467 431 -0.08 -0.08 9.7 9.4 0.5 0.5 86.5% 3.50
Integrated Gasification Coal CCS oxyfuel 434 425 -0.06 -0.06 9.3 9.0 1.4 1.4 99.4% 3.92
Integrated Gasification Lignite CCS post combustion 520 505 -0.05 -0.05 7.1 6.8 1.1 1.0 86.3% 3.64
Integrated Gasification Lignite CCS pre combustion 457 417 -0.07 -0.07 9.6 9.2 0.5 0.5 86.5% 3.68
Integrated Gasification Lignite CCS oxyfuel 434 425 -0.06 -0.06 9.3 9.0 1.4 1.4 99.5% 4.13
Gas combined cycle CCS post combustion 520 505 -0.07 -0.07 7.1 6.8 1.1 1.0 86.0% 2.05
Gas combined cycle CCS pre combustion 401 388 -0.09 -0.08 4.2 4.0 0.5 0.5 86.7% 2.07
Gas combined cycle CCS oxyfuel 434 425 -0.09 -0.09 9.3 9.0 1.4 1.4 99.4% 2.32
Source: PRIMES database

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The transportation and storage of CO2 involves additional costs which increase with the total volume of
CO2 stored underground. The data used for the non linear curves for CO2 storage potential and marginal
costs are based on information from various sources collected within the research project SAPIENTIA.

Figure 1: Non linear cost curve for carbon storage

Marg inal C os t of S torag e (€/t of 

C O 2)
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
0 20,000 40,000 60,000 80,000
T ota l Mt C O2 S tore d in the  E U27

Generally the unit cost of CO2 transportation and storage starts from 6 €/t CO2 and goes up to 20 €/t
CO2 when approaching the maximum storage potential in some cases. The data on the potential storage
and the costs differ by member-state. In the current model application no trade of CO2 is assumed be-
tween the EU countries, so each member-state is individually arranging for CO2 transportation and sto-
rage (see Figure 1).

Overview of Scenario Results

Deployment of CCS technology
As mentioned above, the CCS technology does not develop in the context of the Baseline scenario as the
EU-ETS price of 22 €/t CO2 is too low for enabling investment in CCS power plants. On the contrary CCS
investment takes place in all scenarios which involve emission reduction obligations.

The contribution of CCS is low in 2020 in all scenarios, as the technology is assumed not to be fully ma-
ture by that date. The development of CCS takes place mostly towards the end of the projection period and
is significant by 2030.

The scenarios that involve only the carbon emission constraint show the highest development of CCS
among all cases studied. This result is obtained despite the fact that in the pure carbon reduction scena-
rios the CCS is not mandatory and so the investment is decided on a pure economic basis.

Those scenarios that also involve the renewables constraint show lower development of CCS just because
meeting the renewables target implies that the domain for CCS development is lower than in the case of
the pure carbon reduction scenarios.

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Generally the scenarios which involve mandatory CCS show higher development of CCS than the corres-
ponding scenarios which do not assume enforcement of the CCS. As expected, applying the mandatory
enforcement of CCS also on gas-firing plant increases the contribution from CCS. In the case of full en-
forcement of the CCS, the results show that by 2030 the contribution of CCS is double than in the corres-
ponding case without enforcement.

The scenarios that involve auctioning of emission allowances show generally lower CCS development than
the corresponding scenarios with a grandfathering allocation. This is due to the fact that the auctioning
implies higher electricity prices hence lower electricity demand and consequently smaller domain for CCS
deployment.

Table 2 shows a summary of the results by scenario in terms of CO2 captured in absolute and in percen-
tage terms.

The table shows that the enforcement of CCS as mandatory is likely to increase the total volume of CO2
captured in 2030 in a range between 50% and 100% provided that the constraint involving emission re-
duction is also enforced. The co-existence of the renewables targets is likely to reduce the total volume of
CO2 captured in 2030 in a range between 30% and 60%.

Table 2: CO2 captured in different scenarios

EU27 CO2 captured as % of CO2 CO2 captured as % of CO2

CO2 Captured (Mt/year)
from Power and Steam from all Energy
Scenarios 2020 2025 2030 2020 2025 2030 2020 2025 2030
1 Baseline 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
2 Base-CCS1 0.0 4.3 62.0 0.0 0.2 3.6 0.0 0.1 1.5
3 Base-CCS2 0.0 5.0 90.5 0.0 0.3 5.2 0.0 0.1 2.2
4 CVtar-G 53.3 142.2 490.7 4.0 10.1 32.5 1.6 4.3 16.2
5 CVtar-A 27.2 150.5 483.3 2.2 11.1 32.8 0.8 4.5 15.9
6 RVCVtar-G 7.2 33.3 219.2 0.6 2.7 17.5 0.2 1.0 7.2
7 RVCVtar-A 7.0 19.7 160.7 0.6 1.7 13.2 0.2 0.6 5.2
8 RVCVtar-G-CCS1 7.2 33.1 300.7 0.6 2.7 24.1 0.2 1.0 10.1
9 RVCVtar-G-CCS2 7.2 52.1 424.3 0.6 4.2 32.7 0.2 1.6 14.6
10 RVCVtar-A-CCS1 6.9 20.6 266.9 0.6 1.8 22.2 0.2 0.6 8.9
11 RVCVtar-A-CCS2 6.9 26.5 391.3 0.6 2.2 31.0 0.2 0.8 13.3
12 RVCVtar-A-CCS1R 37.2 118.1 326.2 3.2 10.0 26.9 1.1 3.7 11.0
13 RVCVtar-A-CCS2R 75.0 176.5 517.1 6.2 14.4 39.5 2.2 5.5 17.9
14 RVCVtar-A-CCS2N 0.0 3.5 272.6 0.0 0.3 22.7 0.0 0.1 9.1
15 RVCVtar-A-CCS2Nuc 7.1 22.6 352.1 0.7 2.1 29.7 0.2 0.7 12.2
16 RVCVtar-A-noCCS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
17 RVCVtar-A-subs 0.2 21.6 210.7 0.0 1.8 17.3 0.0 0.7 6.9
Source PRIMES

The enforcement of capture-ready obligation applicable on all new power plants and on all power plant
refurbishments as early as in 2015 onwards has a significant effect on the deployment of CCS technology.
In the case of applying this obligation only on coal plants, the increase of CO2 capture in 2030 is of the
order of 65%. But when the obligation also applies on gas plants then considerable volumes of CO2 are
captured corresponding to a doubling of CCS activity in 2030 from the corresponding scenario. This latter

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case corresponds to the highest CCS deployment among all scenarios (see scenario No 13). In that sce-
nario, almost half of CO2 emitted in power generation is captured and stored. The reason of this devel-
opment is that all gas plants which are built during the time period before the maturity of CCS technology
are ready with capture technology and are later equipped with CCS as a result of the enforcement. There-
fore, power investors cannot escape at all from CCS equipped plant investment even before the CCS ma-
turity.

The carbon capture activity takes place mainly in relatively few countries. The model results show that it is
likely that Germany, Poland and the Czech Republic are the countries with the highest activity of carbon
capture and in all scenarios quantified. Lower but systematic activity in carbon capture is found for Slova-
kia, Slovenia, Hungary, Bulgaria and Romania. A third group of countries carry out carbon capture only in
those scenarios that involve high total carbon capture. These countries are UK, Belgium, Spain, Italy, Aus-
tria, Ireland and Greece. Among the latter group, Austria and Italy do a relatively very small carbon cap-
ture activity. The rest of the EU countries are not likely to carry out carbon capture.

So the main bulk of carbon capture activities, hence transportation and storage, activity is located in the
centre and east of Europe, and is, as expected, related to the development of power generation based on
coal.

Table 3: Carbon capture per country

Base- Base- CVtar- CVtar- RVCVt RVCVt RVCVt RVCVt RVCVt RVCVt RVCVta RVCVtar- RVCVtar- RVCVtar-A- RVCVtar- RVCVtar-
Mt of CO2 CCS1 CCS2 G A ar-G ar-A ar-G- ar-G- ar-A- ar-A- r-A- A-CCS2R A-CCS2N CCS2Nuc A-noCCS A-subs
Captured in CCS1 CCS2 CCS1 CCS2 CCS1R
2030

Ireland 8 7 3 2 5 2 2 2
United Kingdom 18 16 8 60 1 57 4 62 57 53 10
Belgium 1 7 12 12 19 29 17 27 22 50 27 18
Luxembourg 1
Netherlands 6 5 3 14 5 5
Germany 32 39 135 129 45 84 130 74 115 135 186 115 84 56
France 3 3
Spain 38 27 16 18 9 9 11 13 9 15 1
Portugal 3 3 2 2
Denmark 7 5
Sweden
Finland 11 6 1 1
Austria 8 7 7 7 1 11 7 7
Italy 19 17 4 5 4 4 8 10 4 4
Slovenia 2 3 5 5 5 5 5 5 5 5 5 5 1 5 5
Czech Republic 11 10 44 42 17 16 17 18 16 16 18 18 9 20 18
Slovakia 3 3 8 8 6 6 6 7 6 7 7 9 6 7
Poland 4 17 131 126 98 91 94 87 92 89 72 78 27 88 94
Hungary 1 4 12 13 8 8 8 9 8 9 7 12 1 9 8
Latvia
Estonia 1 1
Lithuania
Romania 7 8 14 36 23 19 21 20 18 20 12 17 4 20 7
Bulgaria 7 19 15 15 15 15 15 15 14 16 15 3
Greece 8 6 2 3 4 1 3 3 3 3 1
Cyprus
Malta
EU27 62 91 491 483 219 161 301 424 267 391 326 517 273 352 211

In the case of capture-ready obligations and in particular in case this applies to both coal and gas plants,
almost all EU countries develop CCS and storage.

10 y
17-Sept.-2007

The figure below shows carbon capture in 2030 within scenario RVCVtar-G which constitutes the central
scenario delivering the two policy targets (emissions and RES).

Figure 2: Map of Carbon Capture in scenarios 7 and 11 (for 2030)

Investment and Power plant operation

Power generation capacities equipped with CCS develop mainly towards the end of the projection period,
and are commissioned mainly between 2025 and 2030. The capacity of power plants with CCS that oper-
ate in 2030 is in a range between 40 and 200 GW for the EU27 depending on the policy priorities that
prevail in each scenario. The CCS capacity in 2030 is found considerably higher in the scenarios that do
not include the renewables targets. The enforcement of CCS as mandatory in scenarios with renewables
targets increases the capacity of power plants with CCS but not up to the level reached when renewables
target is not included. The additional enforcement of a capture-ready obligation and an obligatory retro-
fitting of old plants have considerable effects increasing the capacity of CCS, particularly when that obliga-
tion applies also on gas-firing plants. When the renewables target is present, the development of CCS by
2020 is insignificant even if mandatory CCS policy applies. The capture ready obligation is detrimental to
coal plants and acts in favour of gas plants, because their relative variable operating costs are affected.

The enforcement of mandatory CCS within the Baseline scenario conditions has little and mostly adverse
effects. The capacity of new power plants with CCS develop at much lower level than in scenarios that
meet the emission reduction targets: only one tenth of the potential capacity of CCS develops. The power
investors, in baseline conditions, escape from the obligation by over-investing in the refurbishment of old
thermal plants and the consequent extension of their lifetime. They also invest more on nuclear and RES
plants and change the dispatching schedule of the plants. As a consequence the enforcement of mandatory
CCS without the obligation to reduce emissions is not beneficial to CCS or to emission reduction and on
the contrary entails high costs for power generation and higher prices for the consumers.

11 y
17-Sept.-2007

In general, the CCS develops by far more on coal and lignite plant than on gas plants. This is a result of
relative gas and coal prices in the scenarios. The main bulk of CCS new investments concerns coal plants
except the case of enforcement of the capture-ready obligation on both coal and gas plants in which gas-
based CCS plants develop at a spectacular level.

This result is reflected of course on the consumption of solid fuels and gas for power generation in plants
with CCS. Gas used within CCS equipped plants is almost negligible expect in the case of the scenario en-
forcing capture-ready obligation on both coal and gas plants.

Table 4: Power Capacity of CCS

EU27 Capacity of Solid plants with Capacity of Gas plants with

Capacity with CCS in GW
CCS (GW) CCS (GW)

Scenarios 2020 2025 2030 2020 2025 2030 2020 2025 2030
1 Baseline 0 0 0 0 0 0 0 0 0
2 Base-CCS1 0 1 11 0 1 11 0 0 0
3 Base-CCS2 0 1 16 0 1 15 0 0 1
4 CVtar-G 6 19 79 6 19 75 0 0 4
5 CVtar-A 3 19 76 3 19 72 0 0 4
6 RVCVtar-G 1 4 31 1 4 31 0 0 0
7 RVCVtar-A 1 2 21 1 2 21 0 0 0
8 RVCVtar-G-CCS1 1 4 46 1 4 46 0 0 0
9 RVCVtar-G-CCS2 1 8 73 1 7 64 0 1 9
10 RVCVtar-A-CCS1 1 3 40 1 3 40 0 0 0
11 RVCVtar-A-CCS2 1 4 68 1 3 58 0 1 10
12 RVCVtar-A-CCS1R 6 19 53 3 16 49 0 0 0
13 RVCVtar-A-CCS2R 16 42 109 8 22 69 5 17 35
14 RVCVtar-A-CCS2N 0 1 53 0 1 44 0 0 9
15 RVCVtar-A-CCS2Nuc 1 3 61 1 3 51 0 1 11
16 RVCVtar-A-noCCS 0 0 0 0 0 0 0 0 0
17 RVCVtar-A-subs 0 3 32 0 3 32 0 0 0
Source PRIMES

12 y
17-Sept.-2007

Table 5: Power Generation from plants with CCS

EU27
Power Generation from Power Generation from Gas Power from solids with CCS
Solids with CCS (TWh) with CCS (TWh) as % of total Power from
Solids
Scenarios 2020 2025 2030 2020 2025 2030 2020 2025 2030
1 Baseline 0 0 0 0 0 0 0 0 0
2 Base-CCS1 0 0 0 0 0 0 0 0 0
3 Base-CCS2 0 7 118 0 0 6 0 1 11
4 CVtar-G 46 150 599 0 3 26 7 21 66
5 CVtar-A 23 150 576 0 4 23 4 22 66
6 RVCVtar-G 6 32 248 0 0 0 1 5 32
7 RVCVtar-A 5 20 170 0 0 0 1 3 23
8 RVCVtar-G-CCS1 6 32 366 0 0 0 1 5 51
9 RVCVtar-G-CCS2 6 55 514 0 6 64 1 8 62
10 RVCVtar-A-CCS1 5 21 319 0 0 0 1 3 48
11 RVCVtar-A-CCS2 5 27 464 0 5 71 1 4 59
12 RVCVtar-A-CCS1R 24 126 388 0 0 0 4 21 58
13 RVCVtar-A-CCS2R 61 173 545 25 70 215 9 25 66
14 RVCVtar-A-CCS2N 0 5 348 0 0 66 0 1 47
15 RVCVtar-A-CCS2Nuc 5 21 405 0 5 77 1 4 57
16 RVCVtar-A-noCCS 0 0 0 0 0 0 0 0 0
17 RVCVtar-A-subs 0 23 255 0 0 0 0 4 34
Source PRIMES

Table 6: Consumption of fuels in CCS plants

EU27 Power from solids with CCS

Consumption of Solid fuels Consumption of Gas fuels in
as % of total Power from
in CCS plants (in TWh) CCS plants (in TWh)
Solids

Scenarios 2020 2025 2030 2020 2025 2030 2020 2025 2030
1 Baseline 0 0 0 0 0 0 0 0 0
2 Base-CCS1 0 14 201 0 0 0 0 0 7
3 Base-CCS2 0 16 286 0 1 13 0 1 9
4 CVtar-G 171 460 1,568 0 7 56 9 23 65
5 CVtar-A 87 484 1,549 0 8 48 5 25 66
6 RVCVtar-G 23 108 709 0 0 1 1 6 35
7 RVCVtar-A 22 64 522 0 0 0 1 4 26
8 RVCVtar-G-CCS1 23 107 980 0 0 1 1 6 49
9 RVCVtar-G-CCS2 23 161 1,313 0 13 127 1 9 59
10 RVCVtar-A-CCS1 22 67 868 0 0 0 1 4 47
11 RVCVtar-A-CCS2 22 81 1,196 0 10 141 1 4 56
12 RVCVtar-A-CCS1R 62 315 979 0 0 0 3 18 53
13 RVCVtar-A-CCS2R 151 422 1,356 52 141 432 8 22 62
14 RVCVtar-A-CCS2N 0 12 816 0 0 132 0 1 42
15 RVCVtar-A-CCS2Nuc 23 68 1,059 0 10 153 1 4 53
16 RVCVtar-A-noCCS 0 0 0 0 0 0 0 0 0
17 RVCVtar-A-subs 1 70 682 0 0 1 0 4 34
Source PRIMES

13 y
17-Sept.-2007

Table 7: Structure of Power Generation

EU27 Power Generation from Power Generation from Gas Total Power Renewables Total Power Nuclear
Solids (TWh) (TWh) (TWh) (TWh)
Scenarios 2020 2025 2030 2020 2025 2030 2020 2025 2030 2020 2025 2030
1 Baseline 1,136 1,235 1,285 1,006 1,048 1,036 795 874 953 843 804 815
2 Base-CCS1 1,089 1,056 1,004 1,038 1,173 1,214 815 913 1025 843 820 834
3 Base-CCS2 1,130 1,118 1,097 1,019 1,097 1,083 795 918 1042 842 825 850
4 CVtar-G 656 721 912 1,103 1,225 1,189 845 984 1102 847 850 934
5 CVtar-A 600 684 868 1,025 1,144 1,141 837 968 1092 847 844 927
6 RVCVtar-G 692 701 765 867 966 982 1079 1318 1539 842 827 863
7 RVCVtar-A 659 655 734 797 907 923 1060 1300 1524 839 827 853
8 RVCVtar-G-CCS1 691 641 716 867 1,019 1,013 1079 1317 1544 842 828 872
9 RVCVtar-G-CCS2 682 664 825 867 981 884 1076 1322 1552 842 828 880
10 RVCVtar-A-CCS1 667 623 663 794 938 989 1059 1302 1530 839 827 873
11 RVCVtar-A-CCS2 651 640 786 807 900 852 1055 1310 1541 839 828 877
12 RVCVtar-A-CCS1R 607 609 671 885 997 1,031 1065 1308 1529 842 829 877
13 RVCVtar-A-CCS2R 670 678 826 798 884 854 1071 1321 1549 842 830 881
14 RVCVtar-A-CCS2N 649 631 739 810 902 866 1055 1311 1546 836 831 892
15 RVCVtar-A-CCS2Nuc 561 563 715 791 852 795 1054 1306 1535 986 996 1053
16 RVCVtar-A-noCCS 657 621 463 801 925 978 1061 1305 1538 839 836 904
17 RVCVtar-A-subs 659 658 756 799 909 916 1060 1301 1522 839 826 853
Source PRIMES

Implications on Costs and Prices

EU27
Average Generation Cost in Power plants Investment
€/MWh Expenditure in billion € Average Price of Electricity Total Energy Cost as %
in €/MWh of GDP
Scenarios 2020 2025 2030 15-2020 20-2025 25-2030 2020 2025 2030 2020 2025 2030
1 Baseline 50 50 51 131 144 223 101.4 103.0 104.5 9.57 9.26 8.95
2 Base-CCS1 50 51 52 122 127 220 102.0 104.3 107.2 9.58 9.28 8.99
3 Base-CCS2 50 51 52 91 119 221 102.1 104.3 107.3 9.58 9.28 8.99
4 CVtar-G 52 53 55 134 196 309 105.5 109.0 113.3 9.80 9.55 9.46
5 CVtar-A 62 63 63 125 193 309 127.7 130.7 129.5 10.19 9.94 9.75
6 RVCVtar-G 53 55 57 155 201 326 108.1 113.1 116.8 9.88 9.68 9.55
7 RVCVtar-A 60 62 63 149 192 313 124.1 128.6 130.3 10.14 9.93 9.75
8 RVCVtar-G-CCS1 53 55 57 154 188 342 108.3 113.9 118.0 9.88 9.69 9.59
9 RVCVtar-G-CCS2 53 55 58 144 184 364 108.9 114.3 119.0 9.90 9.70 9.63
10 RVCVtar-A-CCS1 60 62 63 148 187 334 124.3 129.4 130.2 10.14 9.94 9.79
11 RVCVtar-A-CCS2 61 62 63 140 181 361 124.8 129.9 130.1 10.15 9.95 9.81
12 RVCVtar-A-CCS1R 60 62 63 162 206 319 125.3 129.6 130.0 10.15 9.96 9.79
13 RVCVtar-A-CCS2R 61 63 63 167 209 350 126.5 130.9 130.2 10.17 9.99 9.82
14 RVCVtar-A-CCS2N 61 62 63 139 179 350 124.8 130.0 130.7 10.15 9.94 9.80
15 RVCVtar-A-CCS2Nuc 60 62 62 142 170 314 123.5 128.8 128.9 10.17 9.97 9.81
16 RVCVtar-A-noCCS 60 62 66 148 193 302 124.4 129.5 137.7 10.15 9.96 10.07
17 RVCVtar-A-subs 60 62 63 148 193 321 124.0 128.5 129.9 10.14 9.93 9.77
Source PRIMES

14 y
 Ba
se

0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
‐C
Ba C
S1
se
17-Sept.-2007

‐C
C
S2
CV
ta
r‐ G
CV
ta
RV r‐ A
CV
ta
RV RV r‐ G
CV CV
ta ta
RV r‐ G r‐ A
CV ‐C
ta C
RV r‐G S 1
CV ‐C
ta C
RV r‐ A S 2
Figure 3: Emission reduction and electricity prices

CV ‐C
RV ta CS
C V r‐ A‐ 1
ta CC
RV r‐ S2
E U‐27 in 2030

C V A‐ C
t CS
R V a r‐
A 1
CV ‐C R
RV ta CS
%  c hange of A vg P ric e of E lec tric ity from B as eline C V r‐ A 2
ta ‐C R
r‐ C S2
R V A‐ C
%  abatement of C O 2 in P ower G eneration from B as eline

CV CS N
ta 2
r‐ A N u
RV ‐ c
C V noC
ta C
r‐ A S
‐s
ub
s

15 y
17-Sept.-2007

Sensitivity Analysis
Two sensitivity cases have been investigated with the PRIMES model. They are defined as follows:

1. Higher carbon storage costs in new EU Member-States. The ECN-TNO report used to quantify the
non-linear cost curves of carbon storage show significantly lower costs for the new member-states
(except for the Baltic states) than for other countries, like Germany. This is justified in the report
by stating that the Eastern European countries have cheap aquifers suitable for carbon storage.
The sensitivity case investigated what would be the implications for CCS and the distribution of
carbon storage by MS if the storage cost in the new MS was similar to costs assumed for Germany.

2. No phase-out nuclear scenario instead of the Baseline scenario. Regarding nuclear power, the
Baseline Scenario involves phase-out in Belgium and Germany and no extension of lifetime of old
nuclear plants, except in cases, like for Sweden, for which legal approved has been obtained. A va-
riant of the Baseline scenario, termed no phase-out scenario, is defined by assuming that the
phase-out in Belgium and Germany are cancelled and that the extension of lifetime of old nuclear
plant is possible up to fifty years. The extension is applied on a case-by-case basis depending on
the technical possibilities of each nuclear power plant. The no phase-out nuclear scenario involves
changes of electricity trade within the EU internal market, as result of higher availability of nuc-
lear power in certain member-states, notably in France, Belgium, Germany and to a lesser degree
in Spain. The scenario does not allow new nuclear investment in Belgium and Germany and also
keeps unchanged from the Baseline Scenario all nuclear investment restrictions as applicable in
certain MS. On this no phase-out nuclear scenario, the policy assumptions of scenario 11 are ap-
plied.

The two scenarios mentioned above are built as variants of scenario 11 which involves mandatory CCS for
coal and gas commissioned by 2020 and beyond. The sensitivity cases keep the same carbon and rene-
wables values as in scenario 11 and do not seek to readjust these values in order to deliver the same per-
formance in terms of GHG emissions and renewables. As a matter of fact, the high carbon storage costs
variant entails higher carbon abatement costs as result of higher costs for CCS and would need higher
carbon values to deliver the carbon restriction. Conversely, the nuclear sensitivity case entails lower elec-
tricity costs and prices, due to the extension of lifetime of nuclear plants and the abolishment of phase
out, and also has a better performance in terms of carbon emissions, already without carbon restrictions.
Therefore this scenario would need lower carbon values to reach exactly the same GHG emissions as the
scenario 11.

The results show however that the high carbon storage costs variant leads to GHG emissions similar to
those under scenario 11 in 2020 but higher beyond 2020. It would be necessary then to increase carbon
values for the periods after 2020. But for that time period carbon restriction targets have not been yet de-
fined. The increase of carbon storage costs in eastern European countries reduces carbon capture and sto-
rage in these countries at a certain degree (not very significant) but does not imply increase of carbon cap-
ture and storage in other EU countries. Therefore, the uncertainty associated with the carbon storage
costs in the Eastern European countries does not change substantially the conclusions drawn from the
analysis of the main CCS scenarios, which indicate concentration of carbon capture and storage in central
and mainly Eastern Europe.

16 y
17-Sept.-2007

The nuclear sensitivity case suggests that keeping nuclear power roughly at its present level will certainly
reduce the room for CCS development but not substantially, especially beyond 2020. CCS technology and
infrastructure will play an important role, especially after 2020, independently of nuclear policies as fore-
seen today. It is also noticeable, that the countries that keep up nuclear energy are different from those
that are suggested by the model results for CCS development. So, despite the changes in electricity trade
between the EU countries, the two options do not really interfere with each other.

Not allowing CCS development is likely to imply significantly higher costs in order to meet the emissions
and renewables targets. The additional costs are likely to incur mainly in the period 2025 to 2030. To
meet the same targets in the absence of the CCS options, the energy system of EU27 is likely to bear an
additional total cost of 220 billion Euros (of 2005) during the period 2020 to 2030.

EU27 Total Energy System Costs

% Change fron Baseline
in billion Euros of 2005
Scenarios 2020 2025 2030 2020 2025 2030
1 Baseline 1,501 1,599 1,673
2 Base-CCS1 1,502 1,602 1,680 0.1% 0.2% 0.4%
3 Base-CCS2 1,503 1,602 1,681 0.1% 0.2% 0.5%
4 CVtar-G 1,595 1,709 1,818 6.3% 6.9% 8.7%
5 CVtar-A 1,650 1,770 1,869 9.9% 10.7% 11.7%
6 RVCVtar-G 1,593 1,716 1,826 6.2% 7.3% 9.2%
7 RVCVtar-A 1,630 1,756 1,864 8.6% 9.9% 11.4%
8 RVCVtar-G-CCS1 1,594 1,718 1,830 6.2% 7.5% 9.4%
9 RVCVtar-G-CCS2 1,596 1,720 1,834 6.3% 7.6% 9.7%
10 RVCVtar-A-CCS1 1,631 1,758 1,865 8.6% 10.0% 11.5%
11 RVCVtar-A-CCS2 1,632 1,760 1,865 8.7% 10.1% 11.5%
12 RVCVtar-A-CCS1R 1,628 1,755 1,860 8.5% 9.8% 11.2%
13 RVCVtar-A-CCS2R 1,631 1,759 1,862 8.7% 10.0% 11.3%
14 RVCVtar-A-CCS2N 1,632 1,760 1,867 8.7% 10.1% 11.6%
15 RVCVtar-A-CCS2Nuc 1,631 1,760 1,864 8.7% 10.1% 11.4%
16 RVCVtar-A-noCCS 1,633 1,763 1,937 8.8% 10.3% 15.8%
17 RVCVtar-A-subs 1,630 1,756 1,864 8.6% 9.9% 11.4%
Source PRIMES

The subsidies of capital costs of new CCS power plants by 10% imply higher penetration of the CCS tech-
nology. The measure is favourable to new CCS power plant investment rather to retrofitting old plants
with CCS equipment. The new power plants are more efficient in terms of energy losses and also in terms
of carbon capture, as compared with the retrofitted old plants. Power generation from CCS is found in-
creased, as a result of the subsidies, carbon capture is also higher in the long term, except for 2020 for
which carbon capture in volume terms is found lower. This can be explained by the effect of subsidies on
investment in new CCS power plants to the detriment of retrofitting with CCS, which because of efficiency
gains implies lower total carbon capture in 2020. Power generation from CCS plants is found increased by
50% in 2030 relative to the case without subsidies.

17 y
 17-Sept.-2007

EU27 Scenarios 11. RVCVtar-A-CCS2 14. RVCVtar-A-CCS2-N 15. RVCVtar-A-CCS2- 16. RVCVtar-A-NoCCS 17. RVCVtar-A-Subs
NUC
2020 2025 2030 2020 2025 2030 2020 2025 2030 2020 2025 2030 2020 2025 2030
Carbon Value in Euro per t CO2 40 43 46 40 43 46 40 43 46 41 44 67 40 43 46
Renewable Value in Euro per MWh 38 44 48 38 44 48 38 44 48 38 44 48 38 44 48
CO2 Emiisions Power-Steam (Mt) 1166 1155 869 1170 1169 926 1082 1076 833 1176 1148 960 1179 1149 1004
Abated CO2 Emiisions Power-Steam (Mt) 618 675 924 614 662 867 702 755 960 608 683 833 605 682 788
Energy System related CO2 Emissions (Mt) 3360 3269 2906 3365 3284 2964 3272 3185 2865 3367 3256 2925 3373 3261 3045
CO2 Captured (Mt/year) 7 26 391 0 4 273 7 23 352 0 0 0 0 22 211
CO2 captured as % of CO2 from Power and Steam 0.6 2.2 31.0 0.0 0.3 22.7 0.7 2.1 29.7 0.0 0.0 0.0 0.0 1.8 17.3
CO2 captured as % of CO2 from all Energy 0.2 0.8 13.3 0.0 0.1 9.1 0.2 0.7 12.2 0.0 0.0 0.0 0.0 0.7 6.9
Power Generation from Solids with CCS (TWh) 5.3 26.6 464.0 0.0 4.9 347.5 5.5 20.9 404.9 0.0 0.0 0.0 0.1 23.4 255.3
Power Generation from Gas with CCS (TWh) 0.0 4.8 70.7 0.0 0.0 66.5 0.0 4.7 77.0 0.0 0.0 0.0 0.0 0.0 0.4
Power from solids with CCS as % of total Power from Solids 0.8 4.1 59.0 0.0 0.8 47.0 1.0 3.7 56.6 0.0 0.0 0.0 0.0 3.6 33.7
Capacity with CCS in GW 0.7 4.0 67.9 0.0 0.6 52.6 0.7 3.3 61.4 0.0 0.0 0.0 0.0 2.9 32.0
Capacity of Solid plants with CCS (GW) 0.7 3.3 58.2 0.0 0.6 43.5 0.7 2.6 50.7 0.0 0.0 0.0 0.0 2.9 31.9
Capacity of Gas plants with CCS (GW) 0.0 0.6 9.8 0.0 0.0 9.1 0.0 0.6 10.7 0.0 0.0 0.0 0.0 0.0 0.1
Consumption of Solid fuels in CCS plants (in TWh) 22 81 1196 0 12 816 23 68 1059 0 0 0 0 4 34
Consumption of Gas fuels in CCS plants (in TWh) 0 10 141 0 0 132 0 10 153 0 0 0 0 0 0
Power from solids with CCS as % of total Power from Solids 1.2 4.4 56.0 0.0 0.7 42.1 1.4 4.2 53.4 0.0 0.0 0.0 0.0 3.9 34.2
Power Generation from Solids (TWh) 651 640 786 649 631 739 561 563 715 657 621 463 659 658 756
Power Generation from Gas (TWh) 807 900 852 810 902 866 791 852 795 801 925 978 799 909 916
Total Power Renewables (TWh) 1055 1310 1541 1055 1311 1546 1054 1306 1535 1061 1305 1538 1060 1301 1522
Average Generation Cost in €/MWh 60.5 62.4 62.9 60.5 62.4 63.1 60.0 61.9 62.4 60.4 62.3 66.3 60.2 62.0 63.0
Power plants Investment Expenditure in billion € 140 181 361 139 179 350 142 170 314 148 193 302 148 193 321
Total Power-Steam Cost (MEuro) 319229 350865 378564 319283 350852 378821 318749 350775 378431 318704 350506 385206 318126 349336 378406
Incremental Power-Steam Cost (MEuro) 24538 41812 56235 24592 41799 56492 24058 41722 56102 24013 41453 62877 23435 40284 56077
Average Price of Electricity in €/MWh 125 130 130 125 130 131 123 129 129 124 130 138 124 128 130
Total Energy System Cost as % of GDP 10.15 9.95 9.81 10.15 9.94 9.80 10.17 9.97 9.81 10.15 9.96 10.07 10.14 9.93 9.77
Average abatement cost in Euro per t CO2 40 62 61 40 63 65 34 55 58 39 61 76 39 59 71
% abatement of CO2 in Power Generation from Baseline 34.7 36.9 51.5 34.4 36.2 48.4 39.3 41.2 53.5 34.1 37.3 46.5 33.9 37.2 44.0
% change of Avg Price of Electricity from Baseline 23.0 26.1 24.5 23.1 26.2 25.0 21.7 25.1 23.3 22.6 25.8 31.7 22.2 24.7 24.3
Source PRIMES

18 y
17-Sept.-2007

Employment Effects
The evaluation of the impacts on employment proceeds step by step and considers five types of effects: a)
direct effects on mining, b) effects from reducing imported energy bill, c) effects from increasing total en-
ergy system cost, d) effect from increasing energy related investment, and e) other effects through com-
petitiveness and foreign trade.

Meeting the environmental goals imply lower consumption of coal and lignite in the long term, relative to
the baseline scenario. The policies that promote CCS do not alter this finding because any positive effect
they might imply towards higher use of coal and lignite is small when compared with the effects stemming
from other changes in the energy system (lower energy consumption, more renewables and nuclear and
more substitution in favour of gas). This conclusion can be seen by comparing the results of scenario 7
with the results of scenarios 8 to 17, which promote CCS (except the no CCS case). Consequently, direct
employment in the coal and lignite mining industry is likely to decrease substantially from the Baseline
scenario.

All scenarios meeting the environmental targets entail higher total energy system cost for the economy. In
the same time they reduce the payments for imported energy. This implies higher activity domestically,
hence a positive effect on employment.

But, the additional cost for energy displaces spending in other commodities and services. Since energy is a
primary resource of production, spending in energy has a lower multiplier effect on the economy than
spending in the rest of commodities and services. This has a negative effect on employment.

In addition, meeting the environmental targets requires higher investment in energy infrastructure which
exerts pressure on the capital market. In other terms, the increased investment in energy diverts invest-
ment from other activities, for which investment usually has a higher relative effect on total economic ac-
tivity. This results into a negative effect on employment.

Finally, there exist other effects which stem from the change of prices, due to the increased spending in
energy, and the subsequent impacts on foreign trade. Their magnitude depends on whether the EU will
act unilaterally on emission reduction. The present note has ignored this type of effects. Other model-
based analyses carried out with the GEM-E3 model have delivered general equilibrium results on this
matter.

The above mentioned stepwise evaluation estimates that the employment effect of scenario 7, as com-
pared with the Baseline scenario, is towards a reduction of jobs by 587.8 thousand by 2030. This is to
compare with a recent result from the GEM-E3 model which estimated a loss of 730 thousands jobs asso-
ciated to a similar emission reduction scenario.

All other scenarios (e.g. 8 to 17) imply larger loss of jobs than scenario 7. This is in line with the fact that
scenario 7 is the most efficient scenario in meeting the two policy goals (GHG and RES). These scenarios
imply additional loss from scenario 7 of the order of 65 thousand jobs. But the scenario 16 which corre-
sponds to the non availability of CCS implies considerably larger loss of jobs: 322 thousand jobs less than
scenario 7, which are due mainly to the increase of costs for meeting the targets.

19 y
 17-Sept.-2007

EU27 : Results for 2030

Employment in the Employment in the
Employment in the
Direct Employment in whole Economy as whole Economy as Total Effect on
whole Economy as
Coal and Lignite result of lower Import result of higher Energy Employment (thous.
result of higher Energy
Mining (thous. Jobs) Energy Bill (thous. Investment (thous. Jobs)
Cost (thous. Jobs)
Jobs) Jobs)

Change from Change from Change from Change from Change from
Change from Change from Change from Change from Change from
Climate Climate Climate Climate Climate
Baseline Baseline Baseline Baseline Baseline
Scenario Scenario Scenario Scenario Scenario
Scenarios
1 Baseline
2 Base-CCS1 -26.5 -42.4 -11.3 0.9 -79.2
3 Base-CCS2 -12.3 -20.9 -31.0 0.4 -63.8
4 CVtar-G -61.3 197.5 -709.8 -31.5 -605.2
5 CVtar-A -64.4 189.0 -720.6 -31.3 -627.4
6 RVCVtar-G -83.6 241.6 -729.9 -37.6 -609.4
7 RVCVtar-A -86.5 234.2 -702.8 -32.8 -587.8
8 RVCVtar-G-CCS1 -87.6 14.0 233.0 -1.2 -745.7 -43.0 -43.4 -10.6 -643.8 -40.9
9 RVCVtar-G-CCS2 -72.5 14.0 253.8 19.6 -783.5 -80.8 -51.6 -18.8 -653.8 -65.9
10 RVCVtar-A-CCS1 -93.8 -7.3 218.3 -16.0 -731.1 -28.4 -40.6 -7.8 -647.2 -59.4
11 RVCVtar-A-CCS2 -76.4 10.1 244.1 9.8 -765.0 -62.2 -50.4 -17.6 -647.8 -59.9
12 RVCVtar-A-CCS1R -94.5 -8.0 201.3 -33.0 -729.2 -26.5 -35.2 -2.4 -657.6 -69.8
13 RVCVtar-A-CCS2R -71.5 15.0 226.4 -7.8 -783.7 -81.0 -46.2 -13.4 -675.1 -87.2
14 RVCVtar-A-CCS2N -89.0 -2.5 230.2 -4.0 -748.5 -45.7 -46.5 -13.6 -653.8 -65.9
15 RVCVtar-A-CCS2Nuc -86.4 0.1 251.7 17.4 -756.9 -54.2 -33.1 -0.3 -624.8 -37.0
16 RVCVtar-A-noCCS -138.4 -51.9 221.4 -12.8 -964.1 -261.3 -29.0 3.8 -910.1 -322.3
17 RVCVtar-A-subs -85.5 1.0 235.9 1.7 -714.8 -12.1 -36.0 -3.2 -600.4 -12.5

20 y