C02 at $60 Before Utilities Cut Emissions, Stanford University Report Predicts
At what price will operators of natural gas-fired power plants invest in carbon capture storage (CCS) technology? Between $50 and $60 dollars per ton of CO2, according to the initial findings of a yet to be released study by the Stanford University Graduate School of Business, GER learns.
We spoke to the study’s author, Stanford‘s William R. Timken professor of accounting, Stefan Reichelstein. He start out by telling us that the paper’s findings “are preliminary and still subject to change.”
He adds:
In a cap-and-trade environment, if we’re staying below $50 -to- $60 levels natural gas-powered plant operators will find it advantageous to operate without buying permits or invest in carbon capture and storage (CCS) technologies.
Concretely, this means that even in a cap-and-trade world it could take a while ($50 or $60), before carbon-loaded utilities even consider cutting their emissions.
The study follows another paper Reichelstein co-authored with graduate student Ozge Islegen, released this week that among other things concluded that a cap-and-trade regime would increase the cost of electricity but not at the levels predicted by competing studies. It also estimated that the price for a ton of carbon would have to hover between $25 and $30 before utilities operating coal-fired power plants buy permits and invest in CCS technology.
