Sustainable Energy Technologies and Assessments 2 (2013) 31–41

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Sustainable Energy Technologies and Assessments

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Original Research Article

Prospective scenarios for the adoption of CCS technologies in the Iberian Peninsula

João P. Gouveia a,⇑, Júlia Seixas a, Maryse Labriet b, Patrícia Fortes a, Maurizio Gargiulo c

a CENSE, Faculdade Ciências e Tecnologia, Universidade Nova de Lisboa, Portugalb ENERIS Environment Energy Consultants s.l. c/ Duque de Alba 15, 3-6 25012 Madrid, Spainc e4sma S.r.l. (Energy Engineering Economic Environment Systems Modeling and Analysis S.r.l.), Via Livorno 60, Turin I-10144, Italy

a r t i c l e i n f o

Article history:Received 14 August 2012Revised 3 February 2013Accepted 7 February 2013

Keywords:CCSClimate policyEnergy systemIberian peninsulaTIMES model

2213-1388/$ - see front matter � 2013 Elsevier Ltd. Ahttp://dx.doi.org/10.1016/j.seta.2013.02.002

Abbreviations: CCS, carbon capture and storage; RETIMES_IBERIA, the Integrated MARKAL/EFOM System⇑ Corresponding author. Address: Campus da C

Portugal.E-mail address: jplg@fct.unl.pt (J.P. Gouveia).

a b s t r a c t

Carbon capture and storage (CCS) has been identified by several studies as a promising option in thegreenhouse gas mitigation portfolio of different countries. Since the Iberian Peninsula is a region witha large availability of renewable energy sources (RES), the role of CCS deserves deeper analysis. Usingthe TIMES_IBERIA optimization model, this paper investigates the contribution of several factors (i.e. cli-mate policy, RES and CCS cost curves, and gas prices) that might promote or constrain the adoption of CCStechnologies as part of a portfolio for reducing CO2 emissions from the power generation and industrialsector, in the medium–long term (2020–2050), within the Iberian Peninsula energy system.

CCS becomes cost effective only after mature renewables, namely wind onshore and hydropower, arefully exploited up to their technical-economic potential. An ambitious long term climate target (�50%reduction in 2050 over 1990) contributes to an early penetration of CCS (in 2025). It penetrates morein the power sector (60% of captured emissions) than in industry (40%), and most of it is implementedin Spain (95%), not in Portugal. CCS penetration appears very sensitive to the costs of CCS technologies,while much less sensitive to the costs of renewable technologies.

� 2013 Elsevier Ltd. All rights reserved.

Introduction

Carbon capture and storage has been identified by several stud-ies as a promising option in greenhouse gas mitigation portfolios ofdifferent countries. During the past decade, many studies have fo-cused on CCS potential [1], efficiency and costs for CO2 capturetechnologies, either in electricity production [2,3] or in industry[4,5], conditions and costs for CO2 transport [6,7] and potentialand costs of storage [8,9]. Although some convergence is visible,uncertainty in most data still dominates, mainly on costs, as illus-trated by the range of cost values presented in the literature (e.g.[10]). Moreover, as several authors argue (e.g. [11,12]), the deploy-ment of CCS technology is conditioned by the existence of a carbonprice or, any policy instruments such as subsidies or a favorableCCS regulation, all ultimately driven by climate policy. However,climate policy also promotes other options, like renewable basetechnologies and energy efficiency. Energy commodities’ pricescan also condition the development of CCS technologies, sinceexpectations on stabilization or decreasing of gas prices due to

ll rights reserved.

S, renewable energy sources;for Iberian Peninsula.

aparica, 2829-516 Caparica,

large reserves of unconventional fossil fuels, like shale gas, couldsupport the penetration of gas power plants with CCS.

The International Energy Agency [13] pointed to CCS as a crucialtechnology to mitigate greenhouse gas emissions from large-scalefossil fuel use as in fuel transformation, industry and power genera-tion, contributing to one-fifth of the 50% global emissions reductionsin 2050. If CCS is not available in the 2020s, the overall costs of mit-igation would increase by 70% [13]. More recently [14] refers to CCStechnology to account for up to 20% of cumulative CO2 emissionsreductions up to 2050 (in their two degrees scenario). A delayedCCS scenario, considering that technology is available in the 2030s,will put a very high pressure on other low-carbon technologies,which demonstrates the importance of investing now in CCS [15].

Several papers have been focused on CCS technologies infra-structure deployment for different countries (e.g. [16–18], butyet no in-depth assessment has been done for the Iberian Penin-sula Region. Hence, there is an interest in exploring the expectedrole for CCS in the Iberian energy system under different energyand climatic conditions. The Iberian Peninsula has a significantrenewable energy sources (RES) potential, which has beenexploited by the Spanish and Portuguese economies during the lastdecades. Renewable energy sources assured 33% and 50% of the netelectricity produced in 2010 by Spain and Portugal, respectively.Wind power capacity in the region represents 30% (24.5 GW) ofthe total European Union (EU27), while solar PV accomplishes16% (4.7 GW) and hydropower 16% (30 GW) [19]. Recent policy

32 J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41

announcements from both countries [20,21] refer to energy effi-ciency as the next major priority in line with the EU climate andenergy package for 2020, aiming to reduce primary energy con-sumption while increasing economic growth. This context offersto the Iberian Peninsula a framework favorable to renewablesand energy efficiency. Therefore, the role of CCS in climate strate-gies may not be as obvious as in other regions and deserves deeperanalysis. It is for example explored in demonstration projects inSpain, illustrating the potential interest for domestic applications.Taking into account the EU energy and climate policy purposeand ambition lasting after 2020, there is the need to identify thefactors and conditions that will constrain or promote CCS technol-ogies in the medium-long term (2020–2050), in the Iberian Penin-sula. The assessment of such factors will be of high importance toconclude for the need for a CCS roadmap for the region, namely interms of R&D, capacity building, stakeholders’ decisions on invest-ments and ultimately on policy design.

Since public perception can have a significant influence on thesuccess or failure of a widespread CCS chain, the conditions ofacceptability of CCS should also be evaluated as well as the condi-tions for the development of a comprehensive legal framework toensure industry and public confidence in CCS [22]. These topics re-lated to public perception, regulatory needs and business modelsare crucial; they are however out of the scope in this paper, whichis focused on the techno-economic potential of CCS in climate andenergy strategies.

This paper aims to assess a set of conditions under which CCStechnologies may represent a cost-effective option to the climatemitigation portfolio in the Iberian Peninsula, both for power gener-ation and industrial sectors for the time horizon up to 2050, usingthe TIMES_IBERIA optimization model. This paper studies the tech-no-economic aspects of CCS within energy scenarios, consideringdifferent conditions like climate targets, gas prices, and cost curvesof renewables and CCS technologies. The paper focuses on CO2 cap-ture technologies both for power units and for cement and iron andsteel industrial sectors. Other potential CCS industrial applicationssuch as those in refineries were not considered due to processcomplexity, and/or high uncertainty of costs.

The paper is structured in four sections. The model and scenar-ios are presented in the next section (Section 2). The results are de-scribed and discussed in Section 3 and Section 4 concludes.

Methodology and data

TIMES modeling framework

The TIMES_IBERIA bottom-up technical-economic equilibriummodel was used to generate a set of nine scenarios, combining dif-ferent assumptions regarding climate policy, CCS deploymentcosts, RES and gas costs in order to explore the conditions thatmake CCS a cost-effective mitigation option within the powerand industry sectors in the Iberian region. TIMES_IBERIA was ex-tracted from the Pan-European TIMES model-PET36 [23,24] createdwith TIMES model generator developed by Energy Technology Sys-tems Analysis Programme (ETSAP) of the International EnergyAgency. The full technical documentation of the TIMES model isavailable in [25–27].

The model version used is technology rich (approximately 1600energy supply and demand technologies) and integrates the entireenergy/emissions system of the two countries (Spain and Portugal)and its possible long-term developments until 2050, linkedthrough trade of the main energy commodities. The base year ofthe model is 2005, and the model is calibrated to energy statisticsfor the 2005 to 2010 horizon as regards power plant capacity, elec-

tricity production, final energy consumption and energy commod-ities trading [28,29].

The TIMES model provides the cost-effective technological andresources solution to fulfill the energy services demand inputtedexogenously over the model time horizon, subject to a range ofconstraints. The main inputs of TIMES_IBERIA are the demand forfinal energy services and materials, resource potentials and costs,technologies characteristics and associated costs and policyrestrictions for scenario analysis.

The entire chain of processes from end use sectors as residen-tial, commercial, industry, transport, power plants, as well as up-stream (from extraction to secondary transformation) arerepresented in significant detail, covering the different service de-mands such as space heating, lighting, distance driven by cars andbuses, production of iron and steel, pulp and paper, etc. This con-tributes to a precise tracking of optimal capital turnover. The mod-el database includes technical, environmental and economic data(e.g. efficiency, capital cost, emissions coefficients) that vary overthe entire time horizon.

The model assumes time periods of 5 years until 2050 (i.e. 2005,2010, 2015, up to 2050) and different time slices for electricity(and heat): 4 seasons (spring = 75 days, summer = 101 days,fall = 79 days, and winter = 110 days) and 3 times of the day(day = 11 h, night = 12 h and peak = 1 h).

The total cost of the system is discounted to year 2005 at 5%.In addition, specific sector discount rates were used to convertcapital cost in annual cash flow, reflecting specific investmentdynamics in different sectors: large power and steam generation:9%; industry, services, agriculture, trucks, inland navigation andcombined heat and power plants: 12%; households and privatetransport cars: 17.5%; public transport: 8% and 5% for others.More information on boundary conditions and data is presentedin the next sections.

Data assumptions

A set of modeling assumptions were set up, namely: (i) on driv-ers conditioning the energy services demand that forces theTIMES_IBERIA model to respond for, (ii) on variables stated asboundary conditions for the energy system (e.g. endogenous en-ergy resources potential, international energy prices), and (iii) onthe evolution of energy technology costs, including on CCS capture,transport and storage costs. The most important assumptions arepresented as follows.

The demand for energy services were projected according to ademographic [30,31] and economic growth scenario, as illustratedin Table 1, following the methodology in Gouveia et al. [32] for theresidential sector and in van Regemorter and Kanudia [33] forother energy uses. The scenario supported by an increasing popu-lation trend and optimistic economic growth rate was selected forthis work, aiming to produce high levels of CO2 emissions, and thusa priori favorable conditions to foster CCS technologies. HistoricalGDP data for the period 2005–2010 were taken from Eurostat[34]. GDP growth rates for 2010–2015 were taken from [35], bothfor Portugal and Spain, accommodating the low economic activity.For 2015–2030, GDP growth rates were taken from the Europeanmodel PRIMES [36] in the case of Portugal, while an optimistic rateof 2.5% was adopted for Spain, according to national analyses. Forthe long term, a linear growth trend upto 2.6% and 2.8% for2045–2050 period was adopted for Portugal and Spainrespectively.

As far as fossil fuels are concerned, Portugal does not have anyunder exploitation, though specific exploration projects are underdevelopment, namely on natural gas in Algarve by REPSOL. Spainhas very scarce fossil fuel reserves [37], with proven reserves of918 PJ of oil and 92 PJ of natural gas, while brown lignite

Table 1Drivers projections for Iberian Peninsula (Adapted from [34–36]).

2010 2015 2020 2025 2030 2035 2040 2045 2050

Population (million) 57.53 57.75 58.04 58.47 58.89 59.25 59.60 59.78 59.92

2010 (billion €2010) 2010/15 2015/20 2020/25 2025/30 2030/35 2035/40 2040/45 2045/50

Portugal annual GDP rate (%) 172.83 0.22 2.04 2.03 2.20 2.29 2.39 2.49 2.60Spain annual GDP rate (%) 1048.88 1.59 2.50 2.69 2.80 2.80 2.80 2.80 2.80

Table 2Fossil fuel prices used in TIMES_IBERIA model (Adapted from [15]).

€2010/GJ 2020 2030 2050

Oil 12.6 14.4 18.0Natural gas 7.2 8.3 10.0Coal 3.2 3.4 3.8

J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41 33

production stopped in 2007 due to the closure of the last twoexploitations. The production of national coal is not expected tolast in the future with subsidies to national coal planned to be fin-ished in 2014. The average primary energy import prices up to2035 were adopted from the New Policies Scenario from World En-ergy Outlook 2011 [15], with a linear trend assumed till 2050(Table 2).

The two countries have highly invested in renewables in the lastdecade, especially in hydropower and wind farms in Portugal, andsolar and wind farms in Spain [38,39]. Despite the uncertain futureeconomic and financial incentives to promote new renewablepower capacity, the Iberian region presents a high potential on nat-ural resources for energy production, and thus it should be ex-pected that further exploitation of such resources takes placeaccording to the learning curves of related technologies. The tech-nical potential estimations of the different RES sources in the Ibe-rian region and represented in the model were validated bynational stakeholders, which constitute an important boundarycondition for the Iberian energy system. The figures for RES invest-ment costs, operation and maintenance costs as well as the avail-ability factors were updated, both for actual conditions and forexpected evolution up to 2050. Some of the energy technology dataresult from national stakeholder’s own data and expectations (e.g.hydro, wind), while others come from international reports (e.g.[40]) and are validated afterward by national stakeholders (e.g. so-lar photovoltaic) (Table 3). This is a crucial aspect for the modelingpurpose, since no subsidies or feed-in tariffs to renewables wereconsidered, and therefore energy technological options result onlyfrom their cost-effectiveness.

Nuclear energy is considered not to be an option for Portugal,and a phase out after 2030 is considered for Spain. Electricity tradebetween the Portuguese and Spanish energy systems is allowed

Table 3Technical and economic assumptions for selected renewable energy technologies consider

Availability factor (%)a Tec

Large Hydro 60 80Wind Onshore From 19 (summer) to 30 (winter) 20Wind Offshore (floating) From 31 (summer) to 46 (winter) 20Photovoltaic crystalline silicon (plant size) From 23 (summer) to 11 (winter) 25Photovoltaic crystalline silicon (roof panel)Wave 40 20

a This parameter considers the technology efficiency and the availability of the resoub Operation and maintenance costs for wind offshore 4%, waves and solar 3% and win

and Spain can also trade electricity with France and the North ofAfrica. Main international connections for gas transportation be-tween Spain and Portugal, Spain and France and Spain and Northof Africa have been identified and quantified in the model.

Despite the huge growth of RES electricity production since2005, mainly wind (180%) and solar photovoltaic (from 0.16 PJ toalmost 24 PJ in 2010), around 50% of the electricity production inthe Iberian Peninsula still relied on fossil fuels in 2010, which im-plies near 72% of imported products for producing electricity(Fig. 1).

The capture of CO2 from small and mobile sources, as the resi-dential and commercial building sectors, and the transportationsector, is recognized to be difficult and expensive [43]. As statedby Kuramochi et al. [44] despite the existence of a relatively largenumber of techno-economic feasibility studies on CO2 capturefrom industrial processes, it is difficult to determine which tech-nologies are truly promising and what are the possible CO2 capturecosts in different timeframes, due to (i) the diversity of technolo-gies required in the industry when compared with the power sec-tor [4] (ii) the nature of such technologies, while some CO2 capturetechnologies are of an add-on nature, others are integrated withthe industrial process potentially affecting the material and energyflows of the entire industrial plant considerably. Table 4 presentsthe technical and economic parameters of selected power technol-ogies (compression to 110bar considered), referring to a genericCCS technology and not any specific capture technology. Powerplants with CCS are assumed to become available by 2020. Ofcourse crucial to enhance the technologies, demonstration projectslike Compostilla, in Spain, and prior to 2020, are not included in themodeling exercise given their small impact on the electricity andenergy systems.

For the case of industry, we considered CCS only to be availablein 2030 as in other studies focused on the same topic [45]. Invest-ment costs for cement (dry production) increase by 103% with CCSand 83% in blast furnaces with CCS compared to the reference tech-nologies (125 M€2010/GW for cement and 150 M€2010/GW for ironand steel) [45,46]. The costs of CCS in industry were assumed tobe constant along the time horizon, due to the high uncertaintyof cost data available. Hence, they will be evaluated under differentcost scenarios (cf. Section 2.3). Input changes due to CCS areadapted from [45] for cement and [46] for iron and steel. TheCCS technologies are assumed to capture 65% of the CO2 in iron

ed in TIMES_IBERIA (Adapted from [41,42]).

hnical lifetime (years) Technical potential (Maxcapacity) (GW)

Investment costs(M€2010/GW)b

2020 2030 2050 2020 2030 2050

28.2 28.2 28.2 4 092 4 092 409245.5 54.7 55.2 1 146 1 134 1 1117.8 14.0 24.3 3 211 2 753 1 83526.4 28.0 29.7 2 143 2 143 850

2 923 1 754 1 169- 8.8 11.5 4 662 3 931 3 201

rce by time slice.d onshore 2%.

Solar2%

Wind15%

Hydro18%

Other RES2%

Coal9%

Natural Gas31%

Oil6%

Nuclear17%

Fig. 1. Electricity production portfolio in 2010 in the Iberian Peninsula [19].

34 J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41

and steel and 85% in cement. The technical lifetime for the refer-ence and with CO2 capture technologies is the same (30 years).

In Iberia, all the existing fossil fuel power plants will be decom-missioned around the year 2030. For example in Portugal, the twoexisting coal fired power plants will reach the end of their life in2018 (Sines power plant) and around 2021 (Pego power plant)[47].Therefore, no power plant retrofitting was considered in themodeling work due to the lifetime of available fossil fuel capacityand commercial availability of CO2 capture technologies.

The costs for CO2 storage and transport have been identified asmuch lower than the capital costs and fuel cost of capture (e.g.[10]).The transportation of the separated and compressed carbondioxide is considered a relatively mature technology, when com-pared with CO2 capture and underground sequestration. Pipelines,tanker trucks and ships, can transport CO2 although dedicated CO2

pipelines are the most efficient transport mode for shipment [48].In this paper, only onshore/offshore CO2 transportation via pipelineis considered, with an onshore cost of 1.5€/t CO2 and an offshorecost of 3.4€/t CO2, considering an average pipeline length of180 km [7], which is a good approximate average distance for bothcountries when considering the CO2 emissions sources and thespatial distribution of the storage sinks. The transportation costsare assumed higher in the beginning of the simulated period toaccommodate initial resistance and barriers (e.g. technical, organi-zational, regulatory or related to public perception).

Concerning CO2 storage, geological storage in saline aquifers isthe only option considered in this paper for the Iberian Peninsula,given the characteristics of both Portuguese and Spanish reservoirs(onshore and offshore). A potential for CO2 storage was assessed upto 7.7GtCO2 for Portugal, and 23 GtCO2 for Spain ([49]), with theonshore sink potential representing around 75% of the total Iberian

Table 4Technical and economic assumptions for selected power technologies considered in in TIM

Investment costs (M€2010/GW) Efficiency

2020 2030 2050 2020 20

Pulverised coal power plant 1 286 1 286 1 286 53 54Pulverised coal power plant with CCS 2 013 1 874 1 799 43 45Natural gas combined cycle 497 497 497 61 62Natural gas combined cycle with CCS 830 767 685 53 55

Note: technologies without CCS were validated by national stakeholders. Additional invesfor fossil fuel plants around 4–5%.

potential. CO2 storage costs were derived from an average estimatefrom [9] notably 5 and 14 €/t CO2 for onshore and offshore storage.The model will choose the cost-effective option by balancing theonshore/offshore alternatives of transport and storage costs andpotentials.

Scenarios

The adoption and penetration of CCS technologies depend onseveral factors such as commercial availability of capture technol-ogies; favorable CCS policies; learning curve effects; fossil fuelprices; among others, that have been addressed in several piecesof work (e.g. [50–54]).

In this work, the adoption of CCS technologies in the power andindustry sector is assessed through a set of nine scenarios, address-ing different expected conditions (Table 5), namely: (i) climate pol-icy targets, (ii) development of non-mature renewabletechnologies like solar, waves and wind offshore, (iii) deploymentof CO2 capture technologies, and (iv) trends of gas prices. This setof conditions allows a better understanding of the factors that willshape the future Iberian energy system choices in terms of energytechnology options, fuels, CO2 reduction strategies and costs, fol-lowing a cost-effectiveness criterion.

Since CCS deployment is conditioned by the range of emissionreduction commitments, two scenarios on emissions targets wereconsidered under future climate policy: (a) [REF] 20% of CO2 emis-sions reductions in 2050 compared to 1990 levels (REF), meaningthat the emissions are kept constant after 2020; and (b) [C50]20% CO2 reductions in 2020 and 50% reduction until 2050 followingthe ambition of the Low Carbon Roadmap for Europe [55], linearlyinterpolated along this period. Both scenarios accomplish thereductions considered in non-ETS sectors under the effort sharingdecision, for Portugal and Spain. The emission reduction targetswere done individually for each country allowing the understand-ing of the capability of the countries to comply with a stringentcap.

Since there is a high uncertainty on how RES costs will evolve inthe next decades, notably for non-mature technologies, like solar,waves and wind offshore, two scenarios were considered: (a)[C50-RES PES] +30% over the investment and operation and main-tenance cost curve (in Table 3) for the period 2020-2050, referringto a pessimistic evolution; and (b) [C50-RES OPT] �30% over theinvestment and operation and maintenance cost curve, referringto an optimistic perspective.

As stated by Rubin since the cost of CCS technology could pose abarrier to its widespread use as a greenhouse gas control option[56], there are still no empirical data on actual costs of CCS facili-ties, attention should be given to the uncertainties of the costs esti-mates [57]. Therefore, we deal with uncertainty on the evolution ofCO2 capture technologies through the consideration of a range ofcosts, from a decrease of 10%, 30% and 50% to an increase of 30%of the investment and operation and maintenance cost curves,which resulted in 4 different scenarios [C50-CCS OPT10; C50-CCSOPT30; C50-CCS OPT30; C50-CCSPES30] respectively. These scenar-

ES_IBERIA (Adapted from [11]).

(%) Capacity factor (%) Capture rate (%) Technical lifetime (years)

30 2050

54 85 - 3547 85 85 3564% 85 - 3557 85 85 35

tment costs and energy penalties due to CCS as in [11]. Operation and maintenance

Table 5Conditions and scenarios to be assessed with TIMES_IBERIA.

Conditions Scenario name and Description Objective

Current EU climate policy [REF]: 20% of CO2 emissions reductions in 2020 and stated constantuntil 2050 compared to 1990 levels The effort sharing targets in non-ETS sectors for Portugal and Spain is included as a minimum condition

Assess the adoption of CCS under current climate policies

Ambitious EU climate policy [C50]: 50% reduction of CO2 emissions in 2050 over 1990 emissions.All technologies costs curves are equal to REF. The effort sharingtargets in non-ETS sectors for Portugal and Spain is included as aminimum condition

Assess the adoption of CCS under an ambitious climatechange target

Renewables powertechnologies (RES)optimistic (OPT) andpessimistic (PES)

[C50-RES OPT]: Climate target as C50. Investment and O&M costs ofsolar, wind offshore and waves power techs are 30% lower, comparedto the costs curves stated in C50, from 2020 onwards[C50-RES PES]: Climate target as C50. Investment and O&M costs ofsolar, wind offshore and waves power techs are 30% higher comparedto the costs curves stated in C50, from 2020 onwards

Assess the adoption of CCS against the uncertainty on futurecosts of RES power immature technologies, under anambitious climate change target

CCS deployment (CCS)optimistic (OPT) andpessimistic (PES)

[C50-CCS OPT10; C50-CCS OPT30; C50-CCS OPT30; C50-CCS PES30]:Climate target as C50. Investment and O&M costs of CO2 capture techsare stated 10%, 30%, 50% lower and 30% higher when compared to thecosts curve stated in C50, from 2020 onwards

Assess the adoption of CCS against the uncertainty on itsfuture deployment, under an ambitious climate changetarget

Natural Gas price [C50-GAS LOW]: Climate target as C50. Gas price with a decrease ofabout 20% (as in WEO 450 ppm scenario [15]

Assess the adoption of CCS against the expectation onnatural gas falling prices, under an ambitious climatechange target

J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41 35

ios apply for all the capture technologies, and over the 2020–2050period.

The expectation on the stabilization or falling prices of naturalgas, due to recognized high worldwide availability of gas reserves(mainly shale gas),was accommodated through a scenario of a 20%reduction of the gas prices along the period upto 2050 [C50-GASLOW]. This scenario intends to assess the impact on the increaseduse of natural gas and thus on the adoption of CCS.

Therefore the variations on these conditions are assessed ceterisparibus against C50 scenario (i.e. assuming that Europe will imple-ment an ambitious climate mitigation target). The next section de-scribes the results achieved.

Results

The assessment of CCS technologies in Iberia as a cost-effectiveoption will be presented in the next sections following the fourmain conditions under analysis: climate mitigation ambition, evo-lution of RES costs, expectations on CCS costs and natural gasprices.

Climate policy opportunity

An ambitious reduction of 50% of the energy related CO2 emis-sions (C50) by 2050 for Spain and Portugal individually, over theemissions verified in 1990, is technologically feasible for the

Fig. 2. CO2 emissions evolution in the REF s

Iberian energy system, with very important changes occurring inthe power, transport and industrial sectors (Fig. 2). Renewablesfor electricity production appear highly cost-effective (Table 6),even in the REF scenario, by increasing its share from 25% in2010 to 60% in 2050. Much of this increase is due to photovoltaic(roof and plant), wind onshore and offshore and ocean technolo-gies (wave and tidal). A target of 50% CO2 emission reduction, in-crease the share of RES power by 10% by 2050.

The decreasing production of nuclear energy until decommis-sion of all power plants in 2030 could be a main push for CCS tech-nologies deployment in Spain. Results show that CCS technologiesstart to become a cost-effective option only when the maturerenewables, like hydro and wind onshore, are fully exploited upto their technical potential.

Our results of combined use of RES in 2050 (60-70%) and fossilfuel plants with CO2 capture (30–40%) are in line with Ludig [58],where flexible CCS-based power plants could contribute to balancethe use of fluctuating renewable energies.

In the REF scenario, CCS only appears cost effective in Spain dri-ven by the extended EU 2020 target. In the power sector, coal andgas capacity with CO2 capture will appear after 2030. In industry,CCS will appear in Spain mainly in technologies with coal inputin iron and steel after 2030 and cement after 2040.

In the C50 scenario, new gas power capacity with CO2 capturewill enter just after 2025 in Spain, while in Portugal, similar tech-nology will enter by 2030.The share of CCS fossil plants continu-ously increases and reaches 23 GW or 14.6% of generation

cenario (left) and C5O scenario (right).

Table 6Evolution of the profile of electricity production for the REF and C5O scenarios.

Electricity production(%)

2010 2020 2030 2040 2050

REF C50 REF C50 REF C50

Renewable 25 44 47 55 62 78 59 70Fossil 56 43 39 41 17 0 2 0Fossil with CO2 capture 0 0 0 0 20 22 39 30Nuclear 19 13 13 4 0 0 0 0

36 J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41

capacity by 2050. As foreseen in [14] and supporting our results,long-term investments in coal and gas power plants without CCSare expected to fall to nearly zero. In this scenario, the most impor-tant measure is the replacement of coal by natural gas with CO2

capture for electricity production. Coal power plants with CO2 cap-ture are not chosen in C50 due to the remaining CO2 emissions(efficiency of capture technologies of 85%), making the Iberian en-ergy system to shift for non-carbon (i.e. RES) or lower carbon tech-nologies (gas with CCS) and use the allowed CO2 emissions in othersectors.

In C50, both countries will have CCS in industry, though in Por-tugal only for the cement industry, due to the use of electric fur-nace technology in iron and steel. Our results illustrate that,opposite to the power sector, and as also defended by Viebahnet al. [18], a severe cut in CO2 emissions from the industrial sectordoes not seem possible without this technology, since industrialsectors options are limited to the use of electricity and heat fromRES, improved process efficiency and fuel switching. In this sce-nario CCS technologies will capture about 17% of the power andindustry cumulative emissions (around 60% in power and 40% inindustry; 5% in Portugal and 95% in Spain) over the 2025-2050 per-iod. Focusing on 2050, the CO2 captured respectively reaches 37%and 46% of the emissions from industry and power.

Fig. 3 illustrates the CO2 emissions captured, confirming (i) thepower sector as the most attractive for CO2 capture technologies(78% of the captured emissions in REF and 66% in C50), and (ii)the imposition of a strong CO2 cap as a major driver for its antici-pated adoption. Compared with current climate policy (REF sce-nario), a more stringent cap (C50) will promote CCS technologiesto capture 30% more of CO2 emissions in the whole simulatedperiod.

Attending the results from Lohwasser and Madlener [10], ourresults are more conservative on the introduction of CCS in Iberiain the REF for 2025. They present power plants capacity with CCSbetween 1 GW (High Investment Cost) and 14 GW (Low Invest-ment Costs) whereas we do not estimate the penetration of fossilfuel power plants with CO2 capture so early. This divergence in re-sults might be explained by the fact that they consider nuclear andRES capacity as scenario independent, with a fixed capacity value,

0

10

20

30

40

50

60

70

80

90

2025 2030 2035 2040

CO

2 ca

ptur

ed a

nd s

tore

d (M

t C

O2)

Years

Fig. 3. CO2 captured from the electricity and ind

not addressing the cost effectiveness of electricity productiontechnologies.

Final energy consumption in end users sectors is projected todecrease about 16% in C50 by 2050 when compared with REF,due to energy efficiency opportunities, with transport sectordecreasing by 20% and industry by 15% (Fig. 4). Indeed, the aggres-sive CO2 cap will change the energy paradigm in the transport sec-tor, with diesel and gasoline being replaced by ethanol, biomethanol and hydrogen, which will reduce drastically the fossilfuels refining activity, mainly after 2030. It should be referred that,in this paper, despite CO2 capture technologies are not being con-sidered in the refining sector, alternative fuel production technol-ogies are available (e.g. synthetic fuels).

Comparing the results on investment costs for CO2 capturetechnologies between the two scenarios, the C50 scenario requiresa twofold increase of investment for the whole period, justified byits higher and anticipated use. The subsequent analysis on theadoption of CCS technologies in Iberia due to different conditionswill be assessed against the C50 scenario.

CCS and RES technologies

Fig. 5 depicts the change in the electricity production whencosts of investment and operation and the maintenance of newRES (solar, waves and wind offshore) vary. Compared with C50,the impact on the range of renewables installed capacity is of -18GW (-16%) to +14 GW (+7%) in 2050 for the pessimistic and opti-mistic RES cost scenarios, respectively. Nevertheless the RES elec-tricity production increases 3% in the C50-RES OPT and decreases-9% in the C50-RES PES. Accordingly, the impact on the installedcapacity of power plants with capture is estimated to range from�0.5 GW (�2%) to +4.5 GW (+19%) in 2050, where electricity pro-duction by plants with capture decreases by only 1% in C50 RESOPT but increases by 22% in C50-RES PES for the same year. No sig-nificant impact is visible on the overall electricity production(around 2% for both scenarios) due to low availability factors usu-ally associated with the RES technologies accessed herein.

The analysis of the energy system shows that an optimistic per-spective on RES costs evolution will: (i) benefit short term installedcapacity (twofold increase to 11.5 GW in 2020) and the productionof solar photovoltaic plants; (ii) benefit concentrated solar power,ocean energy (both wave and tidal technologies) and wind offshorein medium to long term, (iii) result only in a slight decrease of theinstalled gas power capacity in the medium term both with andwithout CO2 capture. Furthermore, as stated by [59], if the dynam-ics of the expansion of the renewables in the electricity sector re-main high, it is possible that individual RES may be able tocompete with CCS power plants in the short term.

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J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41 37

In the pessimistic RES cost scenario the amount of CO2 capturedincreases by twofold in 2025 and 2030 and by near 25% along thetime horizon. While in the opposite RES cost scenario, CCS is de-layed to 2030 with decreases on the amount of CO2 captured until2050 of near 25%. In other words, the results shed light on the ben-efits that might arise for CCS penetration in Iberia in the power sec-tor under a pessimistic perspective evolution of the RES learningcurve (i.e.C50 RES PES).

In comparison, the perspective on RES power technologies evo-lution have a negative impact on the adoption of CO2 capture tech-nologies by the industry sector on both scenarios, with �11% CO2

captured on C50-RES OPT and �8% in the C50 RES PES in 2030. Fromour results, no differences are observed on the amount of CO2 cap-tured for the long term under this set of conditions. It is also only in2030 that RES cost variations affect the final energy consumptionprofile, with the substitution of electricity, gas and coal by biomassequipments on the C50 RES PES and a decrease of coal and biomasssubstituted by liquefied petroleum gas and heat on the C50-RESOPT.

The range of additional investment costs for CO2 capture tech-nologies both in industry and the power sector will vary from+33% to �11% in 2030, and from +10% to no change in 2050, forthe pessimistic and optimistic RES scenarios, respectively.

Uncertainty in CCS costs

Under an ambitious climate change constrained framework,changes in the costs of CO2capture technologies mostly impactthe power sector, as shown in Fig. 6, due to available alternativepower technologies. These impacts occur earlier in the time period,with cost reductions higher than 30%. A 10% cost reduction appearsnot to be an interesting scenario for CCS penetration in Iberia.

The impact of these CCS costs variation scenarios in the in-stalled capacity of natural gas power with CO2 capture is illustratedin Fig. 7, showing that even in the case of a pessimistic CCS learningcurve, this technology is essential in Iberia for complying with astringent climate mitigation target. The results show that reduc-tions by 30% and 50% in the CO2 capture cost technologies have lessthan 5% impact in RES installed capacity by 2050 (mainly in solartechnologies), meaning that RES technologies remain cost-effectivefor electricity production. In the opposite, an important impact isobserved on the gas power capacity without CCS, with a reductionof 41%, 46% and more than 300%, while CCS costs reduced by 10%,30% and 50%, respectively. Yet, all these changes in the power sec-tor only result in a minor increase on electricity production (be-tween 1% and 3%) and its use in the end-use sectors (particularlyresidential and commercial). This shows that electricity is abso-lutely needed to reduce CO2 and the Iberian energy system is lar-gely electrified. These results also seem to unfold that themitigation options are strongly at the supply level because the en-ergy system has no choice other than to use electricity given thehigh CO2 constraint.

The CO2 captured by 2030 almost double when costs reduce30%, and increases by 150% when costs halved. In opposition, noCCS appears by 2030 when costs increase by 30%. For the wholemodeled time horizon, a range from �500 Mt CO2 to +550 MtCO2 is captured, for the 30% increase and decrease costs, respec-tively, when compared with C50 scenario. In other words, the30% variation of costs appears of high importance for the penetra-tion of CCS, and may be considered as a threshold cost for policysupport of CCS penetration in the Iberian energy system. These re-sults bring forward the importance of financing the transformationof an energy system, where according to [14], CCS and somerenewables will need government support for at least another dec-ade, once relying only on market based policies to induce theseinvestments is unlikely to achieve the levels required.

There is no meaningful impact in the industry sector from CCScost variations, when compared with the C50 scenario where CCS

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Fig. 7. Evolution of the installed capacity of natural gas plants with CO2 capture for the different CCS cost scenarios.

38 J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41

already plays a very important role in order to accomplish theaggressive CO2 cap; therefore variations in costs slightly affectthe amount of CO2 captured in the early stages of CCS adoption(i.e. 2030).

Impacts of lower natural gas price

In a scenario of gas price decrease of about 20% (C50-GAS LOW),the role for CCS in the Iberian Peninsula increases, as illustrated inFig. 8. The impact is observed essentially in the power sector, withthe production of electricity from gas power plants with CO2 cap-ture raising by more than 20% both in 2030 and 2040 and 5% in

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Fig. 8. Amount of CO2 captured in the C50 and C50-GAS LOW.

2050, when compared to the C50 scenario. This higher electricityproduction is mostly consumed in the commercial sector for waterand space heating replacing oil equipments and in the industrialsector (mainly in cement, chemistry and other industries) substi-tuting biomass. Lower gas prices promote the increase of its usein industry, in 2030 (+5.5%) and in 2040–2050 (+8%), replacing bio-mass, black liquors and coal technologies that were used in theC50. Compared to the C50, the penetration of CO2 capture technol-ogies decreases by nearly 12% in the cement industry and 2% in theiron and steel sector by 2030. No difference is observed in the longterm.

Synthesis

The impacts on investment costs; CO2 captured amounts andsink usage due to CCS technologies adoption in the Iberian energysystem are summarized in Table 7. Main highlights include: (i)mitigation role played by CCS even in the REF scenario; (ii) earlierpenetration and high contribution to mitigation in scenarios withan ambitious long term mitigation target, namely 50% CO2 reduc-tion in each country with respect to 1990 emissions level; (iii) nochange in CCS penetration with lower costs of RES power technol-ogies, but earlier penetration in the case of higher costs of RESpower technologies; (iv) no change in CCS penetration from a10% cost reduction of CO2 capture technologies, but importantvariations in CCS adoption in the mid-term with costs variationsof -30% and +30%; (v) higher penetration of CO2 capture in earlyyears if gas price is lower. Compared with the implementation ofan ambitious mitigation policy alone, an optimistic perspective

Table 7Impact assessment of the CCS penetration in the Iberian energy system in the period 2030-2050.

Scenarios CO2 Captured (Mt CO2

|% of total emissions)Cumulative Storage sinkscapacity used (%)

Annualized Investments on CO2

capture technologies (Dto C50)

REF 2030: 6 Mt | 1%2040: 45 Mt | 11%2050: 105 Mt | 22%

3% 2030: 2302040: 18132050: 5064

C50 2030: 26 Mt | 8%2040: 58 Mt | 21%2050: 80 Mt | 37%

4% 2030: 13022040: 42002050: 5625

C50-RES OPT 2030: 25 Mt | 8%2040: 54 Mt | 20%2050:79 Mt | 37%

4% 2030: �11%2040: �4%2050: 0%

C50-RES PES 2030: 45 Mt | 13%2040: 65 Mt | 23%2050: 91 Mt | 40%

5% 2030: 33%2040: 4%2050: 9%

C50-CCS OPT10 2030: 29 Mt | 9%2040: 59 Mt | 22%2050: 80 Mt | 37%

4% 2030: �4%2040: �7%2050: �9%

C50-CCS OPT30 2030: 45 Mt | 13%2040: 68 Mt | 24%2050: 82 Mt | 38%

5% 2030: 7%2040: -22%2050: -28%

C50-CCS OPT50 2030: 60 Mt | 17%2040: 83 Mt | 28%2050: 86 Mt | 39%

6% 2030: 5%2040: �38%2050: �45%

C50-CCS PES30 2030: 7 Mt | 2%2040: 50 Mt | 19%2050: 78 Mt | 37%

3% 2030: �45%2040: 21%2050: 26%

C50-GAS LOW 2030: 30 Mt | 9%2040: 64 Mt | 23%2050: 83 Mt | 38%

5% 2030: 6%2040: 5%2050: 2%

Note: Annualized investment costs for the REF and C50 are absolute values (M€2010).

J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41 39

(+30%) of the evolution of RES costs represents the most importantfactor influencing CCS adoption, followed by an optimistic evolu-tion of CCS costs. This means that, in the case of the Iberian Penin-sula, the adoption of CCS technologies depends greatly on the costevolution of both RES and CCS technologies. The impacts of the as-sessed factors on CCS adoption are more visible in the power sectorthan in the industry (cement and iron and steel) where CCS pene-tration remains quite stable across scenarios especially after 2035;with very few alternatives.

It is observed that just a very small portion of the sinks capacityis used giving Iberia the possibility of long term storage of its ownemissions, allowing the development of CCS for different sectors.Despite the fact that the majority of the CO2 sink potential in Por-tugal is located offshore, the CO2 emissions captured are stored inthe onshore sinks, where lower costs transport and storage occur.Also in Spain, the total CO2 capture is exclusively stored in the on-shore saline aquifers contrary to what is stated by Odenberger andJohnsson [60] who have presented offshore sinks as the only pos-sibility for CO2 storage in Spain. Nevertheless, we acknowledgethat the use of a regional model like TIMES_IBERIA with no specificlocations for large emissions point sources and sinks might notgive clear results on the type of sinks that could be used and onthe possibility of transboundary CO2 transport.

Conclusions

The EU climate and energy pathways being designed for thelong term offers to the Iberian Peninsula a framework much favor-able to the development of renewable energy and energy effi-ciency, following the investments and policies already in place inthe region. Under these pathways, the role of CCS technologies,especially in the power sector, is not obvious. There is the needto understand and assess the role of CCS in the Iberian energy sys-tem in the future, namely under different conditions. The paperaimed to assess whether CCS technologies may represent a cost-effective option to climate mitigation in the region, both in power

generation and industrial sector for the time horizon up to 2050.The assessment was supported by a set of nine scenarios modeledwith the TIMES_IBERIA optimization model, and guided by factorsrelated with climate mitigation target, evolution of costs of RESpower technologies and CO2 capture technologies, and expectationof lowering natural gas price.

The adoption of CCS technologies, both in the power and indus-try sectors, is driven by the need to reduce CO2 emissions. Assum-ing the extension after 2020 of current climate policies and basedon an integrated optimization modeling of the Iberian energy sys-tem, CCS is considered as a cost effective mitigation option com-patible with other options like the use of renewable energy.

Under a more CO2 constraint target (�50%), in the long term,the option for coal power plants with CO2 capture is no longer eli-gible due to the amount of CO2 emissions not captured and the sig-nificant increase of renewables for electricity production. Weestimate that an ambitious long term climate target could antici-pate in 10 years the adoption of CCS technologies, capturing about17% of the power and industry CO2 emissions in Iberia, the mostadvantageous cases being Spain and the power sector.

This paper also illustrates that variations in the costs of REStechnologies have restricted impacts on CCS penetration in thepower system, because in the C50 scenario there is already a highuse of RES technologies. However, expectations on increasing RESpower costs may represent an opportunity for CCS adoption inthe power sector, while expectations on lowering RES costs is nota constraint to its implementation. As mentioned by Viebahnet al. [18] for Germany, if renewable energies and combined heatand power are expanded further and energy productivity is en-hanced, there is likely to be only a limited demand for CCS powerplants.

The simulations on the changes of the costs of CCS technologiesshowed significant sensitivity and impacts on the power system.The CO2 captured by 2030 almost doubles when costs reduce by30%, and increases by 150% when costs halved, which illustratesthe great importance of deployment of the CCS technology by its

40 J.P. Gouveia et al. / Sustainable Energy Technologies and Assessments 2 (2013) 31–41

own to a mature stage. Decreasing natural gas price (about 20%) of-fers room for the additional adoption of CCS technologies in theIberian Peninsula essentially in the power sector, with the produc-tion of electricity from gas power plants with CO2 capture rising bymore than 20% in the medium term (2030), compared to the C50scenario.

The following statements should be stressed from the set of sce-narios analyzed: (i) although CCS technology is available from2020 onward for the power sector, it was not adopted in any sce-nario in that year, (ii) the adoption of CO2 capture technologies de-crease in industry when CCS costs increase by 30%, this being athreshold for policy making; (iii) higher overall CCS investmentcosts observed in the CCS costs increase (+30%) the scenario dueto the fact that CCS is indispensable to accomplish the ambitiousmitigation target, and (iv) CCS becomes cost-effective only whenmature renewable power technologies, like hydro and wind on-shore, are fully exploited up to their technical potential. Takinginto account the assessment made, one may state that, althoughrenewables and energy efficiency could represent the lion’s shareof a mitigation portfolio in the Iberian Peninsula, CCS technologyalso plays an important role to achieve a moderate (20%) and anambitious CO2 reduction target (50%).

The modeling exercise also allowed us to identify key data andknowledge gaps that should be developed in future work, to im-prove the CCS assessment in the Iberian Peninsula, namely onthe consideration of: (i) modeling CO2 capture technologies inother industrial processes, e.g. combined heat and power plantsand chemical industry, to enlarge the mitigation options in theseindustries; (ii) international CO2 market, that could shape differ-ently the average cost to reduce CO2 emissions;(iii) range of valuesfor CO2 transport and storage costs; representing the variability ofe.g. distances/terrains crossed between emission point sources andsinks and to capture onshore and offshore locations specificities inthe region, (iv) possibility of transboundary CO2 transport toaccomplish the cheaper combination of transport and storage solu-tions and (v) identification of synergies, barriers and drivers withinthe Iberian context that can promote or undermine CCSdeployment.

Despite several questions on CCS development still need to beanswered; we can say that CCS has the potential to be used in Ibe-ria as an intermediate technology available to go from the severefossil fueled dependent energy system to a possible 100% basedrenewable system. A silver bullet will not deliver the solution fora sustainable energy system in Iberia, but instead it will be a mat-ter of silver buckshot, through a combination of several oftechnologies.

Acknowledgements

The work supporting this paper was partly funded by the EUproject COMET, Integrated infrastructure for CO2 transport and stor-age in the west MEdiTerranean, under grant agreement no.:241400. We would like to thank Helena Cabal Cuesta and YolandaLechón Pérez from CIEMAT for their contribution regarding theSpanish energy system.The authors also would like to thank thereviewers for their valuable comments and suggestions.

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