How carbon pricing changes the relative competitiveness of low-carbon baseload generating technologies

Abstract

There is wide public debate about which electricity generating technologies will best be suited to reduce greenhouse gas emissions (GHG). Sometimes this debate ignores real-world practicalities and leads to over-optimistic conclusions. Here we define and apply a set of fit-for-service criteria to identify technologies capable of supplying baseload electricity and reducing GHGs by amounts and within the timescale set by the Intergovernmental Panel on Climate Change (IPCC). Only five current technologies meet these criteria: coal (both pulverised fuel and integrated gasification combined cycle) with carbon capture and storage (CCS); combined cycle gas turbine with CCS; Generation III nuclear fission; and solar thermal backed by heat storage and gas turbines. To compare costs and performance, we undertook a meta-review of authoritative peer-reviewed studies of levelised cost of electricity (LCOE) and life-cycle GHG emissions for these technologies. Future baseload electricity technology selection will be influenced by the total cost of technology substitution, including carbon pricing, which is synergistically related to both LCOE and emissions. Nuclear energy is the cheapest option and best able to meet the IPCC timetable for GHG abatement. Solar thermal is the most expensive, while CCS will require rapid major advances in technology to meet that timetable.