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NERA Economists Provide NewERA Model Analysis in Carbon Capture Study
The Situation
Carbon capture refers to a suite of technologies that can produce concentrated streams of carbon dioxide from human operations, such as power plants and industrial sources. While federal investments in carbon capture have largely been based on its potential application as an emission control technology, captured carbon dioxide is also a desired commodity in the oil industry for use in enhanced oil recovery (EOR).
NERA's Role
NERA’s project team, led by Associate Directors Scott Bloomberg and Dr. Sugandha Tuladhar, provided the Carbon Utilization Research Council (CURC) and ClearPath Foundation (CPF) with simulations of the US electricity sector using the NewERA Electricity Sector Model (NewERA).
The Result
NERA’s NewERA simulations were used in the report prepared by CURC/CPF, which examines the potential for market-driven deployment of carbon capture, utilization, and storage (CCUS) technologies for coal and natural gas power plants. In particular, it examines how reducing the cost of carbon capture via a rigorous research, development, and deployment (RD&D) program can enable new coal and natural gas power projects with carbon capture for EOR, and quantifies the resulting economic and employment benefits to the United States.
Under evaluated scenarios, an accelerated RD&D program enables market-driven deployment of 62 to 87 GW with carbon capture technologies without any additional environmental regulations or mandates. By 2040, power-sector carbon capture can enable over 920 million barrels of additional domestic oil production each year, with the increased oil activity supporting up to 780,000 jobs and a $190 billion increase in gross domestic product (GDP). Lower-cost power produced via the RD&D effort is projected to reduce the national retail cost of electricity up to 2.0% by 2040, which is expected to increase GDP an approximate $55 billion and create another 380,000 jobs economy-wide. Projections vary based on key input assumptions, such as power demand growth and fuel prices.