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Title:
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Klimaatneutrale elektriciteit en de MEP
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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1-4-2005
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ECN report number:
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Document type:
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ECN-C--05-033
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ECN publication
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Number of pages:
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Full text:
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22
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Download PDF
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Abstract:
The report ?Climate-neutral electricity and the MEP? explores the possibilitiesfor including climate-neutral electricity under the Dutch Electricity
Law on environmental quality of power production (MEP). The MEP provides
a subsidy to cover the financial gap between the climate-neutral power
production costs and a pre-determined market price. The MEP is currently
used for renewable electricity and combined heat and power. This study
is motivated by an initiative by SEQ Nederland B.V. to deploy a 50 MW
oxyfuel gas-fired power plant with CO2 storage in a producing gas field
in the direct underground of the oxyfuel plant.
Climate-neutral fossil electricity is electricity generated from fossil
fuels combined with the capture and permanent storage of CO2 in a geological
reservoir. Capture and storage of CO2 is increasingly seen as a viable
and promising climate change mitigation option, also by the poli-cymaking
community, but is not yet widely implemented. Currently, six demonstration
projects are active globally, which however do not make use of CO2 emitted
by the power sector.
When putting the provision for climate-neutral electricity into practice,
the varying immaturity of the technologies and the lack of reliable
estimates of production costs should be taken into account, as they
lead to uncertainties in the actual financial gap. Also, the legal framework
for long-term liability for the stored CO2, and public perception can
be barriers to implementation. In addition, there could be interaction
with other policy instruments such as the EU Emissions Trading Scheme.
Storage and especially capture applications for climate-neutral electricity
show significant dif-ferences in technology and in costs. Because of
this, the financial gap varies. In addition, the CO2 transport distance
is of importance. It therefore seems appropriate to differentiate the
MEP tariffs based on type of power plant and the capture system.
The financial gaps for conventional or new power plants equipped with
pre- or post-combustion (ca. 360 to 660 MW) capture systems are between
1.8 and 4.7 ?ct/kWh. It should be noted, however, that these numbers
are subject to high uncertainties. Moreover, the size of the facilities
is in such an order that the captured and stored CO2 amounts to several
Megatonnes CO2 per year; numbers which are unprecedented in CO2 capture
and storage demonstration projects. In addition, reservoirs need to
be available that can store such amounts of CO2, which could theo-retically
lead to higher transport costs. For the specific oxyfuel project proposed
by SEQ, the financial gap is significantly higher: between 7.2 and 8.9
?ct/kWh, depending on the conversion efficiency and the investment costs.
If oxyfuel combustion could be realised on a similar scale as post-
and precombustion capture technologies, the financial gap would be lower.
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