BECCS and DACCS as Negative Emission Providers in an Intermittent Electricity System: Why Levelized Cost of Carbon May Be a Misleading Measure for Policy Decisions

Journal article, 2021

Carbon dioxide removal (CDR) from the atmosphere is likely to be needed to limit global warming to 1.5 or 2°C and thereby for meeting the Paris Agreement. There is a debate which methods are most suitable and cost-effective for this goal and thus deeper understanding of system effects related to CDR are needed for effective governance of these technologies. Bio-Energy with Carbon Capture and Storage (BECCS) and Direct Air Carbon Capture and Storage (DACCS) are two CDR methods, that have a direct relation to the electricity system—BECCS via producing it and DACCS via consuming. In this work, we investigate how BECCS and DACCS interact with an intermittent electricity system to achieve net negative emissions in the sector using an energy system model and two regions with different wind and solar resource conditions. The analysis shows that DACCS has a higher levelized cost of carbon (LCOC) than BECCS, implying that it is less costly to capture CO2 using BECCS under the assumptions made in this study. However, due to a high levelized cost of electricity (LCOE) produced by BECCS, the total system cost is lower using DACCS as negative emission provider as it is more flexible and enables cheaper electricity production from wind and solar PV. We also find that the replacement effect outweighs the flexibility effect. Since variations in solar-based systems are more regular and shorter (daily cycles), one could assume that DACCS is better suited for such systems, whereas our results point in the opposite direction showing that DACCS is more competitive in the wind-based systems. The result is sensitive to the price of biomass and to the amount of negative emissions required from the electricity sector. Our results show that the use of the LCOC as often presented in the literature as a main indicator for choosing between different CDR options might be misleading and that broader system effects need to be considered for well-grounded decisions.