The Impact of CCS Readiness on the Evolution of China's Electric Power Sector

Abstract In this study, GCAM-China is exercised to examine the impact of CCS availability on the projected evolution of China's electric power sector under the Paris Increased Ambition policy scenario developed by Fawcett et al. based on the Intended Nationally Determined Contributions (INDCs) submitted under the COP-21 Paris Agreement. This policy scenario provides a backdrop for understanding China's electric generation mix over the coming century under several CCS availability scenarios. In all scenarios, the electric power sector shifts towards low-carbon generation technologies including significant nuclear, wind, and solar to meet growing demands and emissions targets. The availability and timing of CCS technologies to deploy at scale impacts the resulting generation mix and mitigation costs. Should large-scale CCS deployment be delayed in China by 25 years, the modeled per-ton cost of climate change mitigation is projected to be roughly $420/tC (2010 US dollars) by 2050, relative to $360/tC in the case in which CCS is available to deploy by 2025, a 16% increase. Once CCS is available for commercial use, mitigation costs for the two cases converge, equilibrating by 2085. However, should CCS be entirely unavailable to deploy in China, the mitigation cost spread, compared to the 2025 case, doubles by 2075 ($580/tC and $1130/tC respectively), and triples by 2100 ($1050/tC vs. $3200/tC). However, while delays in CCS availability may have short-term impacts on China's overall per-ton cost of meeting the emissions reduction target evaluated here, the net impact is much smaller compared with not having CCS available within the century and in each case the carbon price is likely to approach the price path associated with the full CCS availability case within a decade following CCS deployment. Having CCS available before the end of the century, even under the delays examined here, could reduce the total amount of nuclear and renewable energy that must deploy, significantly reducing the overall cost of meeting the emissions mitigation targets.