Modeling the Diffusion of Carbon Capture and Storage Under Carbon Emission Control and Learning Effects

26 Pages Posted: 5 May 2010 Last revised: 2 Dec 2013

See all articles by Jan Abrell

Jan Abrell

ETH Zürich - Centre for Energy Policy and Economics (CEPE)

Florian Leuthold

Dresden University of Technology - Faculty of Economics and Business Management

Johannes Herold

Technische Universität Berlin (TU Berlin)

Multiple version iconThere are 2 versions of this paper

Date Written: September 24, 2009

Abstract

This paper examines the interrelationship of learning effects and emission control on the diffusion of carbon capture and storage (CCS). We introduce a dynamic model in which an electricity producer maximizes profits subject to emissions control. All technologies are characterized by specific linear marginal costs and CO2 emissions which need to be covered by limited emission permits. The fossil fuel-based plants can be replaced by the CCS technology which is associated with higher capital costs and a lower system efficiency. Both parameters improve due to learning effects if the technology is applied. The model is formulated as a non-linear optimization problem, and solved using GAMS. Given the assumed technological data, the results for a data set of Germany show that CCS is essential to reach carbon emission goals. However, particularly in the case of learning, CCS can help renewable technologies to become competitive.

Keywords: Carbon capture and storage, CCS, Climate policy, Learning

JEL Classification: H23, O3, Q4

Suggested Citation

Abrell, Jan and Leuthold, Florian U. and Herold, Johannes, Modeling the Diffusion of Carbon Capture and Storage Under Carbon Emission Control and Learning Effects (September 24, 2009). Available at SSRN: https://ssrn.com/abstract=1599567 or http://dx.doi.org/10.2139/ssrn.1599567

Jan Abrell

ETH Zürich - Centre for Energy Policy and Economics (CEPE) ( email )

8092 Zurich
Switzerland

Florian U. Leuthold

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

Johannes Herold (Contact Author)

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Berlin, 10623
Germany
0049-30-314-23252 (Phone)

HOME PAGE: http://www.wip.tu-berlin.de/typo3/index.php?id=2876

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