Energy 176 (2019) 143e155

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Energy
journal homepage: www.elsevier.com/locate/energy

Comparison of the LCOE between coal-fired power plants with CCS

and main low-carbon generation technologies: Evidence from China
Jing-Li Fan a, b, c, Shijie Wei a, Lin Yang d, Hang Wang e, Ping Zhong e, Xian Zhang e, *
a
School of Energy and Mining Engineering, China University of Mining & Technology, Beijing (CUMTB), Beijing 100083, China
b
State Key Laboratory of Coal Resources and Safe Mining (China University of Mining and Technology), Beijing 100083, China
c
Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China
d
School of Economics and Management, China University of Geosciences, 100083, Beijing, China
e
The Administrative Centre for China’s Agenda 21 (ACCA21), Ministry of Science and Technology (MOST), Beijing 100038, China

a r t i c l e i n f o a b s t r a c t

Article history: China is a coal dominated country, where CCS has a great potential to be used in coal-fired power plants
Received 20 January 2019 (CFPP) but it is limited by the high investment cost. The competitiveness of the CFPP that responsible for
Received in revised form the entire chain of carbon capture, the transportation and storage (CPCCS) was compared with the
19 March 2019
natural gas combined cycle power plants (NGCC), the centralized solar photovoltaic power station (CPV),
Accepted 1 April 2019
Available online 2 April 2019
the on-shore wind farms (WF), and the agro-forestry biomass direct combustion power plants (BPP),
through calculating the levelized cost of electricity (LCOE) at the same emission reduction level from the
national and regional perspectives. The results showed that 1) the CPCCS had an advantage over other
Keywords:
Levelized cost of electricity(LCOE)
technologies when it had suitable storage sites within short distances and low coal prices. 2) The LCOE of
CO2 capture and storage the CPCCS was effectively affected by the CO2 transportation distance and the coal price. The initial
Coal-fired power plants investment cost of the CPV and WF, as well as the fuel price of the NGCC and the BPP were the decisive
Natural gas combined cycle power plants factors for their LCOE. 3) The LCOE of the CPCCS had the largest advantage in Shanxi, Tianjin, Gansu, and
Renewable power Xinjiang when compared to the NGCC, BPP, CPV, and WF.
© 2019 Elsevier Ltd. All rights reserved.

1. Introduction wind energy, and biomass are experiencing rapid development

China is a coal dominated country, where the installed capacity
of coal-fired plants occupies about 53% of power generation tech-
nologies in 2018 [1]. The CO2 emission caused by the coal-fired
power plants (CFPP) is 3.58 Gt, which accounts 37% of the CO2
emission produced by fossil fuels combustion in 2016 [2]. Carbon
capture and storage (CCS) technologies will play an important role
in reducing CO2 emission in China, as a means of emission abate-
ment with large emission reduction potential [3]. The CCS tech-
nology for CFPP is necessary for China to meet the 2
C goal from
the Paris Agreement [4]. The CCS projects has experienced limited
development, due to the high initial investment cost, the high en-
ergy penalty, and the lack of identified policies support.
Some low-carbon power generation technologies, such as nat-
ural gas combined cycle power plants (NGCC), as well as renewable
power generation technologies, including solar photovoltaic (PV),
* Corresponding author.
E-mail address: zhangxian@acca21.org.cn (X. Zhang).
under the clear plan and the subsidy policies. The cumulative
installed capacity of the NGCC was 75.7 GW in 2017, a 7.97% in-
crease from 2016 [5]. There is a plan for the installed capacity for
natural gas fired plants to reach 110 million kilowatts in 2020 [6].
The cumulative installed capacities of solar PV, wind energy, and
biomass power generation projects are 174.63 GW, 184.26 GW, and
17.81 GW as of 2018 [7,8]. There are problems associated with these
low-carbon generation technologies. The foreign dependence on
natural gas increased from 1.7% in 2006 to 35.8% in 2016, making it
difficult to control the generation cost of NGCC. This forms a po-
tential threat to China’s energy security. The lack of transmission
availability and the challenge with system balancing will result in
solar and wind curtailment [9], causing wasted resources. The
NGCC and the renewable energy power reduce carbon emissions to
a certain extent, but its current emission reduction potential is
limited according to the current scale of development.
The urgent emission reduction requirements and China’s rich-
ness in coal mean that the CFPP with CCS (CPCCS) could be an
advantageous choice, but requires publicity. The principle task is to
undertake an economic comparison to determine the

https://doi.org/10.1016/j.energy.2019.04.003
0360-5442/© 2019 Elsevier Ltd. All rights reserved.
144 J.-L. Fan et al. / Energy 176 (2019) 143e155
competitiveness between the low-carbon power generation tech-
nologies to investigate the development potential of the CPCCS.
Current research primarily focuses on the respective economic
evaluations of low-carbon technologies. To quantify the negative
effects that the CPCCS had resulted from the high capital cost and
energy consumption, a previous study conducted a technical and
economic evaluation of the entire process of CPCCS [10]. When the
capture efficiency of the CPCCS is 90%, 14e30% of the energy pen-
alty occurs and the unit cost of electricity increases by 27e142%.
The advancement of capture technology led another study [11] to
identify the impact that a new capture technology based on the
calcium cycle had on the economic indicators of the CFPP,
demonstrating that applying this technology increases the initial
investment by 24e42% and increases the operation and mainte-
nance (O&M) costs by 24e30%. The applicability of the CPCCS with
lower expenditures and energy penalties was developed. The po-
tential benefits and investment opportunities brought by the un-
certain factors of CPCCS were considered when adopting a more
flexible and soft investment evaluation method-real option method
to analyze the impact that uncertainties, such as fuel price, carbon
price, and investment subsidies had on the investment decisions of
the CPCCS. The results showed that even if the government gave full
investment subsidies for CCS retrofitting, no investment conditions
existed under the current carbon price level [12]. The possibility to
commercially invest in the CPCCS seems to be limited under the
existing conditions. To promote the commercially development of
CCS project, the utilization of captured CO2 was investigated. It
could be used directly to enhance oil/gas production, culture
microalgae and etc. [13,14], or transferred to be another substance
with use value such as CH4 [15], but their contributions to carbon
emissions reduction are rather limited [16].
Natural gas power plants are regarded as the main form of fossil
fuel power generating capacity in the next 20 years, where Fleten
and Na €sa€kka
€la€ [17] established a simple two-factor model that
considers the stochastic volatility of the electricity price and the
natural gas price. The upper and lower limits of the power plant
value and the optimal energy prices thresholds to enter into the
investment were calculated. China’s natural gas price is controlled
by the government, so Jiang, Zhen [18] analyzed the impact that the
natural gas price had on the natural gas power plants under the
market linkage mechanism. The results show that the natural gas
price under the market linkage mechanism is good for price sta-
bility and reduces investment risks. The impact that the existing
natural gas price had on the NGCC was further considered by Zhang
[19], who conducted a sensitivity analysis of the factors that affect
the natural gas power generation cost. They used the example of
the 9 F gas-steam combined cycle unit to find that the natural gas
power generation is not competitive because of the high natural gas
price. There is abundant research on the investment evaluation of
renewable power generation projects (REP) [20,21]. In order to
have an accurate estimation of the generation cost of renewable
energies and offer government support to formulate incentive
policies [22], some scholars conducted a levelized cost of electricity
(LCOE) analysis. Ondraczek, Komendantova [23] calculated the
LCOE of the solar PV systems in 143 countries, demonstrating that
the LCOE of solar PV systems in northern countries were lower than
in the equatorial countries. They stated that efforts to expand the
PV installation in equatorial developing countries could benefit
from policies designed to make low cost financing more widely
available. A systemic study on LCOE of renewable energy in China
shows that subsidies to renewables-based electricity generation,
except biomass energy, should be increased at higher discount rates
[24].
The studies neglect the potential competition of the low-carbon
technologies, and lack the corresponding comparison research. The
status of the power generation cost of the CPCCS remains vague
throughout the various power generation methods, although the
assessment of electricity cost of the CPCCS has been conducted by
some international institutes [25e28]. The structure of the elec-
tricity cost of CPCCS needs to be understood concretely and clearly,
particularly in China. CPCCS, NGCC, and REP are the low-carbon
generating technologies that have the function of emission reduc-
tion on different levels. The high electricity costs resulting from the
initial cost, the natural gas, as well as the capital cost and the
operation time respectively make it possible and meaningful to
conduct a comparison. This article intends to identify the
competitiveness through the power generation cost from the
government’s perspective, to make an economic analysis that
considers the emission reduction benefit of the CPCCS, natural gas,
and the renewable power generation projects. A theoretical basis
for the rational choice of power generation technology from the
LCOE perspective is provided. The main points are as follows:
(1). The LCOE comparison between the CPCCS, the NGCC, and the
REP was conducted on the same emission reduction level by
adjusting the carbon capture rate of the CPCCS that referred
to the emission level of the NGCC and the REP, which
enhanced the comparability between the different technol-
ogies. If the emission reduction level was neglected, it would
be unfair to make a comparison between these technologies.
(2). The carbon price in the Chinese carbon market (the pilot in
Beijing) was used during the impact of the benefit from
carbon emission reduction on LCOE of low-carbon technol-
ogies analysis rather than the international carbon trading
markets. This reflects the situation in China more accurately.
(3). The LCOE structure of the different low-carbon technologies
was presented concretely and analyzed, particularly the
CPCCS under uncertainties. The impact that the influencing
factors had, related to these technologies was quantified.
(4). Regional resource differences were considered and the ad-
vantageous generating technologies in various provinces
were identified. The prior choice of the CPCCS and other
generating technologies from the perspective of LCOE was
analyzed.
2. Methods and data
2.1. Basic premise
In order to clarify the scope and the fairness of the comparison,
at the same time, reflect the situation in China and avoid the
possible misunderstanding, the reasons for choosing comparative
objects, the operation mode and the adopted technology of CCS and
the way to compare were given as follows:
(1). The NGCC and the REP were selected to compare with the
CPCCS. The centralized solar PV station (CPV), the on-shore
wind farms (WF), and the agro-forestry biomass direct
combustion plants (BPP) were selected to represent the REP,
as their cumulative installed capacity occupied 85%, 99%, and
50% in solar PV, wind energy, and biomass power generation
projects [29]. Hydro power and nuclear power plants were
not included, due to their low generation cost and limited
distribution.
(2). The CFPP was responsible for the entire CCS chain, including
the processes of carbon capture, transport, and storage.
There are no dedicated pipelines for CO2 transportation in
China, so CO2 is transported by tanker trucks. The utilization
of existing logistic facilities rather than establishment of the
 J.-L. Fan et al. / Energy 176 (2019) 143e155 145

new transport infrastructure was considered. Considering
the large-scale emission reduction needs, the captured CO2
will be sequestrated underground directly in this paper.
(3). Post-combustion technology using the monoethanaolamine
(MEA)-based CO2 chemical absorption was adopted in this
research, as this technology is more mature than the alter-
natives [30].
(4). The CO2 emission reduction benefit was obtained as the way
of certified emission reduction (CER).
(5). The CO2 capture rates of the CPCCS were adjusted by flexibly
operation (part-time or partial capture) to meet the equal
emission reduction level of these two generation technolo-
gies to obtain a balanced comparison between the CPCCS, the
NGCC, and the REP. For the NGCC, the capture rate for the
CPCCS was set to 41.5%, with an energy penalty of 5.1% [31].
The CO2 emission of renewable power was zero, although the
CO2 capture rate did not reach 100%, due to the technical
limitation. The ‘complete capture’ of the CO2 assumed was
85e90% [32]. The capture rate of 90% was set as the similar
emission reduction level with renewable power, within the
energy penalty of 11% [33].
2.2. Scenarios setting
There are various factors in the CPCCS that affected the LCOE.
The CPCCS is different from the NGCC and the BPP because the coal
price frequently fluctuates in the coal market, but the relatively
stable natural gas price is controlled by government and the straw
price is limited by the production. The other factor is the trans-
portation distance and the corresponding expenditure that belongs
to the CCS specifically.
Low (150CNY/t), medium (426CNY/t), and high (750CNY/t) coal
price levels were selected. They were the lowest, the average, and
the highest coal price that appeared in Chinese thermal coal market
between 2014 and 2017 [34]. The CO2 transportation distances
were set as short (100 km), medium (250 km), and long (800 km)
distances, where 100 km was more commonly used in the eco-
nomic evaluation in CPCCS [35,36]. Considering the political and
societal preferences, the transportation distance was set as 250 km.
The upper limit was 800 km, which could be technically and
politically hard to obtain [4].
The different cases of these two factors that reflected the market
environment and the natural conditions were combined to inves-
tigate their impacts on the choice of generation technologies from
the perspective of the LCOE. There were total 9 scenarios, as shown
in Table 1.
2.3. LCOE
power generation technologies and is commonly used as a standard
to compare different technologies [38]. The method is critical for
determining a country’s energy management policy [39] and is
used as a long-term guide for comparing the competitiveness of the
power generation technologies by policy makers [40].
The LCOE was determined by the point where the present value
of the sum discounted revenues was equivalent to the discounted
value of the sum of costs [41], meaning that if the electricity prices
were equal to the levelized average lifetime costs of electricity
generation by different technologies, the investors would break
exactly even on an investment project [24], see Eq. (1):
X
N
Pt  Qet X
N
COSTt
t
¼ (1)
t¼0 ð1 þ rÞ t¼0 ð1 þ rÞt
where Pt is the electricity price of power generation project in year
t, Qet represents the power generation of the project in year t, COSTt
is the cost of the project in year t, N denotes the life time of the
project, and r is the discount rate. When the Pt remains unchanged,
Eq. (2) is obtained after the conversion:
P
N
COSTt
COSTInitial þ
ð1þrÞt
t¼1
LCOE ¼ Pt ¼ (2)
P
N
Qet
ð1þrÞt
t¼1
where COSTInitial is the initial investment cost of the power gener-
ation project, consisting of the cost of the device, the land, and the
construction. The COSTt represents the annual cost of the project,
referring to the cost of maintenance and operation, as well as fuel.
As shown in Eq. (2), the LCOE is equal to the ratio between the
present value of the sum of all costs over the life time of the project
and the present value of the electricity production. The discount of
electricity production refers to the discount of the value of elec-
tricity production, not the physical quantity of the electricity itself
[37], but solely the result from the mathematical transformation of
Eq. (1).
To make the LCOE comparison one must identify the cost
structure of different power generation projects and their power
outputs. Therefore, we presented the details of COSTInitial , COSTt and
Qet for each generation technologies in section 2.4.
2.4. The cost structures of different technologies
As the main decisive factors in LCOE, investment structures and
the generation output are different for various generation tech-
nologies and should be understood firstly. The special compositions
of above two factors for CPCCS, NGCC, CPV, WF and BPP are
described as below:

The LCOE is a widely-recognized and transparent method for (1) CPCCS

calculating the cost of power generation, which clearly demon-
strates the economic feasibility of a power generation technology The CFPP was assumed to be responsible for the entire chain of
[37]. It is often used as a metric to rank the competitiveness of the CCS, including CO2 capture, transportation and storage, and

Table 1
Scenarios setting of CPCCS.

Variable parameters of CPCCS Transportation distance (km)

100 250 800

Thermal coal price (CNY/t) 150 L-1 L-2 L-3

426 M-1 M-2 M-3
750 H-1 H-2 H-3

Note: L, M, and H represent low, medium, and high thermal coal prices, and 1, 2, 3 denote short, medium and long distances.
146 J.-L. Fan et al. / Energy 176 (2019) 143e155

undertaking the cost during this process. There were extra ex-
penditures of initial capital investment, O&M, and fuel for the Q NGCC
gt ¼ CapNGCC  HNGCC
t  ðsm  qtÞ (12)
capture device, transportation and storage expenditures other than
the cost of the power plant itself. As shown in Eqs. (3) and (4): where q is the natural gas consumption of a unit of electricity and t
  is the CO2 emission factor of a unit of natural gas consumption.
COST CP
Initial ¼ CI CP þ CI CCS  CapCP (3)
(3) CPV
where CI CP and CI CCS denote the unit initial investment cost of a
CFPP and carbon capture device, and CapCP is the installed capacity The CPV could only afford the initial investment and the O&M
of the CFPP. cost by relying on the solar radiation to operate. The CER could be
  obtained as technology with zero emissions is developed.
CP CCS CP 
COST CP
t ¼ C O&Mt þ C O&Mt  CapCP þ Qct Pct þ lQ gt Tgt  D
 COST CPV
Initial ¼ CICPV  CapCPV (13)
þ Sgt  Pgt
(4) where CICPV denotes the unit initial investment cost of the CPV,
CapCPV is the installed capacity of the CPV.
where C CP CCS
O&Mt and C O&Mt represent the unit annual O&M costs of the
CFPP and the capture device at time t, and Qct is the coal con- COST CPV
t ¼ C CPV CPV
O&Mt  CapCPV  CapCPV  H t  m  s  Pgt
sumption of the CFPP at time t, calculated by Eq. (6), Pct is the coal
(14)
price at time t, l is CO2 capture rate of the CFPP, Q CP
gt is the annual
CO2 emission of the CFPP at time t as shown in Eq. (7), Tgt is the
where C CPV
O&Mt are the unit annual O&M costs of the CPV at time t,
transportation cost of captured CO2 from the emission source to the
and H CPV
t is the annual full-load operation time of the CPV at time t.
storage site, D is the transportation distance, Sgt represents the
storage cost of CO2, and Pgt represents the CO2 price.
Q CPV CPV
et ¼ CapCPV  H t  ð1  uCPV Þ (15)
Q CP
et ¼ CapCP  HCP
t  ð1  uCP  gÞ (5) where uCPV is the self-consumption rate of the CPV.

where Q CP
etis the power output of the CFPP at time t, and H CP
t is the
(4) WF
annual full-load operation time of the CFPP at time t. uCP represents
the self-consumption rate of the CFPP and g is the ratio of the en-
The investment and benefit of WF were similar to the CPV, as it
ergy penalty caused by carbon capture device.
relies on wind energy for operation.

ct ¼ s  CapCP  H t
Q CP CP
(6)
COST WF
Initial ¼ CIWF  CapWF (16)

Q CP CP
gt ¼ m  Q ct (7) where CIWF denotes the unit initial investment cost of the WF,
CapWF is the installed capacity of the WF.
where s is the coal consumption of a unit of electricity and m is the
CO2 emission of a unit of coal consumption. COST WF
t ¼ C WF WF
O&Mt  CapWF  CapWF  H t  m  s  Pgt (17)

(2) NGCC where C WF

O&Mt are the unit annual O&M costs of the WF at time t, and
HWF
t is the annual full-load operation time of the WF at time t.
The NGCC power plant paid for the expenditure of the initial
investment, O&M cost, and natural gas, but could benefit from CER. Q WF WF
et ¼ CapWF  H t  ð1  uWF Þ (18)

COST NGCC
Initial ¼ CINGCC  CapNGCC (8) where uWF is self-consumption rate of the WF.

where CINGCC denotes the unit initial investment cost of the NGCC (5) BPP
plant, and CapNGCC is the installed capacity of the NGCC plant.
BPP should use the straw as the fuel other than the O&M cost
COST NGCC
t ¼ C NGCC NGCC
O&Mt  CapNGCC þ Qnt Pnt  Q gt Pgt (9) every year, but could also benefit from the CER as a zero-emission
generation technology.
where C NGCC
O&Mt are the unit annual O&M costs of the NGCC plant at
time t, Qnt is the natural gas consumption of the NGCC plant at time COST BPP
Initial ¼ CIBPP  CapBPP (19)
t, and Pnt is the natural gas price at time t. The natural gas con-
sumption and CO2 emission reduction of NGCC plant were calcu- where CIBPP denotes the unit initial investment cost of the BPP,
lated by Eqs. (11) and (12). CapBPP is the installed capacity of the BPP.

Q NGCC
et ¼ CapNGCC  HNGCC
t  ð1  uNGCC Þ (10) COST BPP
t ¼ C BPP BPP
O&Mt  CapBPP þ Qst Pst  CapBPP  H t ms
 Pgt
where HNGCC
t is the annual full-load operation time of the NGCC
plant at time t, and uNGCC is the self-consumption rate of the NGCC. (20)

where C BPP
O&Mt are the unit annual O&M costs of the BPP at time t, Qst
Q NGCC
nt ¼ q  CapNGCC  H NGCC
t (11)
is the straw consumption at time t, calculated as Eq. (22). Pst is the
straw price at time t, and HBPP
t is the annual full-load operation time
 J.-L. Fan et al. / Energy 176 (2019) 143e155 147

of the BPP at time t. Table 3

Economic parameters of the NGCC power plant.

Q BPP BPP
et ¼ CapBPP  H t  ð1  uBPP Þ (21) Parameters Value Source

CapNGCC (MW) 600 Same as CFPP.

where uBPP is the self-consumption rate of the BPP. HNGCC (h) 2701 CEC [45]
t
uNGCC (%) 2.23 NEA [52]
Q BPP BPP
st ¼ dQ et (22) CINGCC (CNY/kW) 2555 CEC [45]
C NGCC 106 Jiang [48]
O&Mt (CNY/kWa)
where d is the straw consumption of a unit of electricity. q (m3/kWh) 0.2 Zhao, Zhang [53]
t (kg/m3) 2.14 Lanza, Martinsen [50]
Pnt (CNY/m3) 1.71 NDRC [54]
2.5. Data collection Life time of NGCC (year) 20 CEC [45]

Since the SCPC 600 MW unit is the main unit of the thermal
power generation enterprises in China after being operational in price and the close suitable storage sites could be obtained, the
large quantities after 2000 [42], it was selected to represent the CPCCS could compete with the NGCC. Despite the existence of high
CFPP. Referring to the previous research [43,44], the installed ca- investment and external energy consumption, the CPCCS could be a
pacity of other low-carbon technologies was also set as the same as priority choice which suited the resource endowment of China.
it to conduct comparison, because the different input such as initial What can’t be ignored was that as the coal power industry upgra-
and O&M costs and the generation output affected by the lifetime, ded, the new standards for “near-zero emissions” will improve the
the annual running time and the self-consumption rate of different related pollution of CFPP such as smoke, SO2, NOX to be less than
generation technologies were main reasons cause the various LCOE. the NGCC. If the CO2 from the CFPP could be reduced through CCS,
Lifetimes of different technologies were decided by their own CFPP would have the obvious advantages than NGCC.
equipments and components’ situation, if they had serious wear As shown in Fig. 2, the linear relationship existed between the
and tear so that the economic and safe requirements can’t be met, coal price and the transportation distance, which made the LCOE of
power plants had to shut down. Affected by technical characteris- CPCCS equal to the NGCC. The advantage of the CPCCS was main-
tics, the CPCCS had the longest lifetime-40 years, while other tained when the transportation distance was 510 km and 213 km,
technologies’ lifetimes were less than it. Different from CPV and WF corresponding to the coal price of 150CNY/t and 426CNY/t. Be-
relying on natural resource such as solar radiation and wind energy, tween the transportation distances of 100 km and 250 km, the
CPCCS, NGCC and BPP which had stable fuels input can have longer CPCCS lost the priority of the LCOE if the coal price exceeded the
annual operating time. The CO2 transportation and the storage data 531CNY/t and 392CNY/t. Unfortunately, the CPCCS lost the advan-
came from the CCS demonstration project of Shenhua. And the tage when the coal price was 624CNY/t or the transportation dis-
storage cost contained the initial investment and subsequent O&M tance reached 671 km, having to turn to the possible innovations of
cost of injection and monitoring. The carbon price was the mean CCS technologies. From the perspective of the LCOE, the CPCCS
value of the price of CO2 from the China Beijing Environment Ex- within the ideal storage sites and the coal price could be a
change (CBEE) between 2014 and 2017. The economic parameters comparative low-carbon generating technology with the NGCC, but
of the CPCCS, NGCC and the REP are shown in Tables 2e4. this would have tighter transportation and the coal price re-
strictions if the large drop in natural gas prices occurs. While this
3. Results and discussion possibility relied on the increase of imported natural gas to a large
extent for China rather than the domestic production promotion,
3.1. The LCOE comparison between CPCCS and NGCC the potential challenge towards the energy security can’t be
neglected.
The LCOE of the CPCCS in different scenarios and the NGCC are The structure of the NGCC’s LCOE and three representative
shown in Fig. 1. The NGCC at the natural gas’s mean price of CPCCS’s LCOE are shown in Fig. 3. The natural gas price had a great
1.71CNY/m3 and its LCOE of 0.491CNY/kWh demonstrated that the impact on the LCOE of NGCC and was the decisive factor for the
LCOE of CPCCS had the advantage when the CFPP was responsible competitiveness of the LCOE. The limited natural gas production in
for the entire process including CO2 capture, transportation, and China had difficulty meeting the demand from the rapid develop-
sequestration in the scenarios L-1, L-2, and M-1. When the low coal ment of the NGCC and residents use, where the natural gas price
maintained a high level. There may be a large amount of decrease of
LCOE for NGCC if the natural gas supply was sufficient so that the
Table 2 on-grid subsidy for NGCC could be cut down to a certain degree.
Economic parameters of the CPCCS.
The additional cost caused by CCS changed from 51% to 240%
Parameters Value Source compared with original CFPP under the scenarios of L1 to H3 in the
CapCP (MW) 600 Zhu and Fan [42] CPCCS. The initial investment cost had the largest proportion of the
H CP
t (h)
4186 CEC [45] entire additional cost caused by the CCS for the CFPP when the
uCP (%) 6.88 NEA [46] economic suitable transportation distance existed. As the trans-
CI CP (CNY/kW) 3986 CEC [45] portation distance increased, its cost proportion of the entire
CI CCS (CNY/kW) 4395.77 Abadie and Chamorro [47]
additional cost of the CCS expanded and exceeded the initial in-
C PC 133 Jiang [48]
O&Mt (CNY/kWa) vestment cost, becoming the most important factor in the addi-
C CCS
O&Mt (CNY/kWa)
120.71 Abadie and Chamorro [47]
tional CCS cost even in the LCOE of CPCCS. This accounted for 62%
s (g/kWh) 326.67 NBS [2]
Pct (CNY/t) 426.04 IMCEC [49]
m (tCO2/t) 2.24 Lanza, Martinsen [50]
Tgt (CNY/(t/km)) 1 Empirical data 1
When the coal price and the transportation distance reached “H(750CNY/t)”
Sgt (CNY/t) 47.44 Empirical data
and “3(800 km)”, their respective corresponding critical values were negative and
Life time of CFPP (year) 40 CEC [45] had no sense, so they were not presented in the figures. This situation also applied
Discount rate (%) 8 NDRC [51] to Fig. 5.
148 J.-L. Fan et al. / Energy 176 (2019) 143e155

Table 4
Economic parameters of the REP.

Parameters Value Source

Installed capacity of REP (MW) 600 Same as CFPP.

HCPV (h) 1105 CNREC [55]
t
uCPV (%) 1.9 NEA [56]
CICPV (CNY/kW) 8393 CEC [45]
C CPV 126 Hernandez-Moro and Martínez-Duart [57]
O&Mt (CNY/kWa)
Life time of CPV (year) 25 Zhu, Zhang [58]
HWF (h) 1742 CNREC [55]
t
uWF (%) 2.45 NEA [56]
CIWF (CNY/kW) 7695 CEC [45]
C WF
O&Mt (CNY/kWa)
255.4 Tu, Betz [20]
Life time of WF(year) 20 Chen, Yang [59]
HBPP
t (h) 5731 CNREC [55]
uBPP (%) 9.4 BEIPA [60]
CIBPP (CNY/kW) 10140 NEA [61]
C BPP
O&Mt (CNY/kWa)
350 Ouyang and Lin [24]
d (kg/kWh) 1.11 Qi, Zhang [62]
Pst (CNY/t) 300.34 Gao and Fan [63]
Life time of BPP (year) 20 Zhang, Zhou [64]

0.9
CPCCS NGCC
0.8

0.7
LCOE/(CNY/kWh)

0.6

0.5

0.4

0.3

0.2

0.1

0
L-1 L-2 L-3 M-1 M-2 M-3 H-1 H-2 H-3
Fig. 1. The LCOE comparison between the CPCCS and the NGCC.

Fig. 2. The critical conditions of the equal LCOE between the CPCCS and the NGCC.1

and 33% of them in the H-3 compared with 18% and 9% in L-1. The factor especially at a high level. The energy penalty ratio was low at
coal price was a significant factor in the LCOE, and even a leading the capture rate of 41.5% and remained unchanged, so its cost was
 J.-L. Fan et al. / Energy 176 (2019) 143e155
Fig. 3. The LCOE structure of the NGCC and the CPCCS.
not obvious and remained at 1%e2%. When excessive coal pro-
duction exists, the low coal price would bring the priority of the
LCOE for the CPCCS. The supply side reform of coal in China is
ongoing, so it is an obstacle to promote the competitiveness of the
CPCCS’s LCOE.
3.2. The LCOE comparison between CPCCS and REP
When comparing the LCOE with the REP, the quantity of CO2
required for transformation and storage of CPCCS expanded as the
capture rate increased, which increased the LCOE. Fig. 4 shows that
the LCOE of the CPCCS was higher than the REP when the trans-
portation distance was 800 km, despite the existence of low coal
price. This was the reason why the long distance should be avoided
although it can be achieved in theoretical. The LCOE of CPV was the
highest among the REP, although the initial cost of the CPV
deceased rapidly within the installed capacity expansion and the
technology advancement under the government subsidy. In fact,
the lower running time depending on the solar radiation was the
main reason, in other words, the generation efficiency of CPV didn’t
have the advantage over other technologies. The LCOE had the
advantage of the CPCCS over the CPV when the transportation
distance was 250 km or 100 km, even when the coal price was high.
The BPP and the WF had a relatively low LCOE, so the CPCCS was
advantageous when the coal price and the transportation distance
was at a specific range.
As shown in Fig. 5, the transportation distance should be shorter
than 584 km, 447 km, and 287 km corresponding to the coal prices
in three scenarios to maintain the advantage of the LCOE of the
CPCCS compared with the CPV. If the BPP and the WF were selected
as the competitive objects for the CPCCS, the maximum trans-
portation distance to maintain the advantageous LCOE had a large
decrease to 321 km, 184 km, and 24 km for the BPP, and to 298 km,
161 km, and 0 km for WF corresponding to the three scenarios of
coal prices. At a high coal price, there was the possibility to compete
149
with the WF for CPCCS where the CO2 was stored in-situ. Within
the transportation distances of 100 km and 250 km, the CPCCS had
the advantage of the LCOE over the CPV, the BPP, and the WF when
the coal price was lower than 1126CNY/t, 596CNY/t, 548CNY/t,
824CNY/t, 294CNY/t, and 246CNY/t. Obviously, if the CO2 trans-
portation distance was short, there could be a large space for coal
price increase to make the CPCCS maintain the LCOE advantage
over the CPV, especially for the relative low coal price at present.
The competitiveness of the CPCCS for the CPV, the BPP, and the WF
would disappear when the transportation distance was longer than
372 km, 396 km, and 659 km.
The LCOE structure of the REP and the CPCCS is shown in Fig. 6.
For the CPV and the WF, the initial investment cost occupied the
largest proportion of the LCOE. The decreased LCOE in these two
technologies relied on the equipment improvement and the effi-
ciency enhancement of the resource utilization. For BPP, obtaining a
sufficient straw supply at a low price was key when maintaining the
advantageous LCOE. Otherwise, the lack of straw supply would
result in the high LCOE of BPP and make it difficult to operation
while the subsidy as the way of feed-in tariff existed.
At the capture rate of 90%, the cost for the CCS expanded. The
increment of the LCOE resulting from the CCS process changed from
73% to 439% at L-1 to H-3. Even in a relatively short transportation
distance, the transport cost of the CO2, became the important
section of the LCOE of the CPCCS. The proportion was similar to the
initial investment cost for capture device. The transportation cost
occupied 27%e77% of all the additional cost under the 9 scenarios,
having an increase compared with the low capture rate. Unlike the
EU carbon transport cost, which was V5/t of CO2 for a 180 km
onshore pipeline (equivalent to 0.2CNY/(t$km)) [26], the transport
cost in China was high, generally 1CNY/(t$km) for the tanker truck.
The importance of seeking a close storage site and a cheaper
transportation way that controlled the transportation cost was
confirmed.
150 J.-L. Fan et al. / Energy 176 (2019) 143e155
1.3
CPCCS
1.2
1.1
1
LCOE/(CNY/kWh) 0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
L-1 L-2 L-3
Fig. 4. The LCOE comparison between the CPCCS and the REP.
Fig. 5. The critical conditions of the equal LCOE between the CPCCS and the REP.
3.3. The impact of regional resource difference on LCOE
In order to justify the competitiveness of the CPCCS, the NGCC,
and the REP, the impacts that the resource differences caused by the
region’s distribution had on the LCOE were considered. In terms of
the CPCCS, the coal price and the distance from the CFPP to suitable
storage sites varied among the provinces. Beijing phased out the
CFPP, so there was no base to perform the CCS applications. The
difference of transportation distance in various provinces were
studied [4]. The CFPP in Hainan did not have suitable storage sites
within 800 km, so we were unable to conduct a comparison be-
tween these two provinces. Qinghai, Guangxi, Guangdong, and
Fujian had suitable storage sites within 800 km, but not within
250 km, so 500 km was set as the transportation distance in these
provinces. For the provinces whose CFPP had suitable storage sites
within 250 km, the transportation distance was set as 100 km. The
natural gas price, the straw price, and the annul operation time
determined by the solar and the wind resources were different in
each province, these parameters are shown in the Appendix.
Fig. 7 shows a comparison with NGCC, where the CPCCS had
advantages in the central and eastern provinces, due to the high
natural gas price. The largest advantage for the CPCCS was in Shanxi
province, due to the low coal price, the close distance to the storage
site, and the relatively high natural gas price. The gap was
BPP CPV WF
M-1 M-2 M-3 H-1 H-2 H-3
0.087CNY/kWh. Shanxi was the coal-resource province, whose
mean coal price from 2014 to 2017 was 305.25CNY/t and the fourth
lowest in China, enabling controlling the LCOE of the CPCCS at a low
level under the advantage of coal price. There was no rich natural
gas resource in Shanxi, resulting the high gas prices. The Qinshui
basin in Shanxi province provided suitable storage sites within a
short distance. The LCOE of NGCC was the most advantageous in
Qinghai, with a gap 0.179CNY/kWh lower than that the CPCCS. The
lack of suitable storage sites within the economic distance was the
main cause, although the natural gas price was relatively low.
The REP shown in Figs. 8e10 was compared to show that the
CPCCS had advantageous LCOE in different provinces, due to the
regional heterogeneity. For the CPV, the CPCCS had advantages in
the most of provinces because of the low annual operation time of
the CPV, which was approximately 11%e36% of it of the CPCCS. The
generation had an obvious gap between them although the
installed capacity was the same. The largest LCOE advantage for the
CPCCS existed in Tianjin, whose annual operation time of the CPV
was the lowest in China at 487 h, which was 1.293CNY/kWh higher
than the LCOE of the CPCCS. It became the only province having the
prior choice for CPV compared with the CPCCS from the perspective
of LCOE since it was limited by the access to the close suitable
storage sites in Qinghai.
The annual operation time of the WF was higher than the CPV,
Fig. 6. The LCOE structure of the NGCC and the REP.
152
Fig. 7. The provincial comparison between the LCOE of the CPCCS and the NGCC. Note:
Data from Tibet and Taiwan were not obtained.
Fig. 8. The provincial comparison between the LCOE of the CPCCS and the CPV. Note:
Data from Tibet and Taiwan were not obtained.
Fig. 9. The provincial comparison between the LCOE of the CPCCS and the WF. Note:
Data from Tibet and Taiwan were not obtained.
J.-L. Fan et al. / Energy 176 (2019) 143e155
Fig. 10. The provincial comparison between the LCOE of the CPCCS and the BPP. Note:
Data from Tibet and Taiwan were not obtained.
making its LCOE a low level. There were advantageous LCOE for
CPCCS in Heilongjiang, Jilin, Inner Mongolia, Shanxi, Ningxia,
Gansu, Xinjiang, Chongqing, and Guizhou. Although these prov-
inces were rich in wind energy, the relatively low coal price created
the LCOE advantage for the CPCCS. The largest LCOE advantage of
the CPCCS existed in Gansu, which was 0.413 CNY/kWh lower than
the WF. The WF had priority in other provinces, especially in
Qinghai, Guangxi, Guangdong, and Fujian, whose CPCCS had a long
CO2 transportation distance requirement.
Unlike the CPV and the WF, the BPP relied on straw fuel. The BPP
could have a long operation time if the straw supply was sufficient.
The straw quantity and the price were decisive factors for the
generation and the economy of the BPP. The advantageous regions
for the BPP were mainly distributed in the southern provinces. It
could be seen that the range of the LCOE gap between the BPP and
the CPCCS was narrower than that of the CPV and the WF, the stable
economy of the generation technologies relying on fuel supply was
proofed. The CPCCS had the LCOE advantage over the BPP in many
provinces, where Xinjiang had the biggest probability to choose the
CPCCS as the preferred low-carbon generation technology because
its LCOE was 0.176 CNY/kWh lower than the BPP. The straw
resource was not rich in Xinjiang, but its coal production was large
and the coal price was the lowest in China.
The CPCCS had the largest LCOE advantage in Tianjin, Gansu, and
Xinjiang when compared with the CPV, the WF, and the BPP. The
LCOE of the CPV and the WF were limited by the solar and wind
energy utilization efficiencies to be the highest in Tianjin and
Gansu, resulting the relative advantage of CPCCS. The lowest coal-
price in Xinjiang and relatively high straw price guaranteed the
advantage of the CPCCS compared with BPP. The CPV was advan-
tageous in Qinghai, while the WF and the BPP had advantages in
Guangxi from the perspective of LCOE, whose gaps were 0.174CNY/
kWh, 0.498CNY/kWh, and 0.356CNY/kWh. The expenditure of the
CO2 transportation was responsible for these results.
4. The sensitivity of sharing key factors on the LCOE
The results were confirmed by sharing key factors of the CPCCS,
the NGCC, the BPP, the CPV, and the WF, where the carbon price, the
initial cost, the O&M cost, and the operation time were considered
and analyzed. As Fig. 11 shows, most of the factors obtained stable
fluctuations except for the initial cost for the different generation
technologies. The most obvious impact occurred in the CPV, when
the initial cost changed by 1% and the LCOE changed by 0.9%. The
 J.-L. Fan et al. / Energy 176 (2019) 143e155
1.2
Carbon price
0.8
Sensitivity(%) Initial cost
0.6 O&M cost
Operation time
0.4
0.2
Fig. 11. Sensitivity of the LCOE over different low-carbon technologies.
CPCCS with a capture rate of 90% had the least sensitivity to the
initial cost and the LCOE changed by 0.17% in response to the 1%
variation in the initial cost.
The CO2 price had the least significant impact on the LCOE,
whose variation ranged between 0.03 and 0.06% after the 1%
change in the CO2. This was because the cost of CO2 was low in
China, so there was a possibility for the CO2 price to play a large role
offsetting the LCOE in the future if there was a rapid increase due to
the tight emission constraint.
The LCOE was sensitive to the operation time of the generation
projects. The variations of the LCOE in the different generation
technologies were greater than 1% when the operation time
changed by 1%, so it was a key factor that needs to be selected
carefully to ensure the accuracy of the results.
5. Conclusions
The competitiveness of the CPCCS among the primary low-
carbon generating technologies was investigated to determine its
development potential from the national and regional perspectives.
The LCOE of the CPCCS was compared with that of the NGCC and
the REP from the main variable factors, the structure, and the
regional differences in a way able to adopt the emission reduction
level. The main conclusions are as follows:
1. When CCS technology was used in the CFPP to reduce carbon
emissions under the existing market conditions, the LCOE of the
CPCCS had advantages over other low-carbon technologies
when the positive conditions existed, like suitable storage sites
within closer transportation distances and low coal prices,
although the investment cost of the CCS capture device was
relatively large. China’s coal-based resource endowment con-
ditions meant that the positioning of the CPCCS under the
emission reduction requirements should be further clarified.
There is a possibility to apply the CPCCS to reduce emission,
because of the LCOE advantage.
2. The LCOE of the CPCCS was effected by the variable factors of the
distance from the CFPP to storage sites and the coal price. When
the distance of CO2 transportation was 800 km, the CPCCS lost
the LCOE advantage between the NGCC and the REP. An economic
transportation distance of 250 km or 100 km could be obtained
for the CPCCS, giving the LCOE an advantage over the CPV
absolutely. But this advantage existed only when the coal price
was lower than the specific level compared with NGCC, BPP and
153
WF. A close suitable storage site was a key consideration factor for
the CFPP when applying the CCS technology. The low coal price
could offset the negative effect caused by the long transportation
distance. If the long transportation distance could not be avoided,
the low coal price played a role in controlling the LCOE.
3. The resource status in China was affected by the region and it
had a significant impact on the LCOE of different generation
projects. To ensure the LCOE advantage of the CPCCS, the
regional factors should be addressed during the CPCSS devel-
opment. The CPCCS had the greatest competitive advantage over
the NGCC, the CPV, the WF, and the BPP in Shanxi, Tianjin,
Gansu, and Xinjiang. The CPCCS had the largest advantage over
the CPV around the country compared with other low-carbon
technologies. There was a possible advantage for developing
the CPCCS, due to its lower LCOE in provinces with existing re-
sources and the market environments that were not ideal for
some generation projects.
4. The CER could lower the LCOE by about 3e6% of the low-carbon
generation projects, but its impact was limited due to the low
cost of CO2 in China. There is a necessity to accelerate the
perfection of national carbon trading market to improve the CO2
price, in order to exert its positive influence on the LCOE.
6. Policy recommendations
1. In order to achieve emission reduction, a combination of low-
carbon technologies, including the CCS, should be developed
based on realistic situations, such as resource endowment. We
could save the resource and the capital during the emissions
reduction process.
2. As China’s carbon trading market is established, the CCS project
of the CFPP with large emission reduction potential should be
considered the main body of the transaction. The mechanism
should be perfected to maintain smooth development of the
carbon trading market and to support the development of the
CCS project in the CFPP through market funds.
3. To ensure the LCOE advantage of the CPCCS, the regional
resource conditions should be accounted for, in addition to a
suitable storage site during the development of the CPCCS. For
the low-carbon technologies with high cost that are supported
by government subsidies, such as the NGCC and the REP, this
subsidy policy could be adopted in the CPCCS.
154 J.-L. Fan et al. / Energy 176 (2019) 143e155

Acknowledgements

The authors gratefully acknowledge the financial support of the

Asia-Pacific Network for Global Change Research (no. CBA2018-
02MY-Fan).

Appendix

Province Pnt (CNY/m3) Pct (CNY/t) HWF

t (h) HCPV
t (h) Pst (CNY/t) Tgt (km)

Tianjin 1.9 444.90 2075 487 367.2 100

Hebei 1.88 403.98 2077 1222 301.22 100
Shanxi 1.81 305.25 1936 1459 296.16 100
Inner Mongolia 1.24 235.71 1830 1491 288.74 100
Liaoning 1.88 460.50 1929 1200 310.27 100
Jilin 1.66 422.44 1333 1179 299.61 100
Heilongjiang 1.66 405.97 1666 1467 295.22 100
Shanghai 2.08 504.02 2162 871 351.97 100
Jiangsu 2.06 491.11 1980 1115 346.07 100
Zhejiang 2.07 513.89 2161 1025 350.51 100
Anhui 1.99 519.87 2109 882 281.12 100
Fujian 2.14 500.88 2503 637 318.87 500
Jiangxi 1.86 588.91 2114 687 295.36 100
Shandong 1.88 522.38 1869 1108 312.77 100
Henan 1.91 476.62 1902 693 283.62 100
Hubei 1.86 515.68 2063 916 298.91 100
Hunan 1.86 528.54 2125 e 288.73 100
Guangdong 2.08 520.74 1848 620 330.52 500
Guangxi 1.91 610.24 2365 964 275.85 500
Chongqing 1.54 519.32 1600 e 278.88 100
Sichuan 1.55 518.30 2247 1515 281.61 100
Guizhou 1.61 437.31 1806 1006 256.37 100
Yunnan 1.61 459.15 2223 1227 262.99 100
Shaanxi 1.24 394.32 1951 1218 266.44 100
Gansu 1.33 377.87 1088 999 258.59 100
Qinghai 1.41 460.98 1553 1268 277.03 500
Ningxia 1.17 297.77 1726 1429 265.78 100
Xinjiang 1.05 191.09 1290 886 312.08 100
Data source NDRC [54] IMCEC [49] CNREC [55] CNREC [55] Gao and Fan [63] IEA [4]

Note: Data from Tibet and Taiwan were not obtained.

decision-making based on real options for China’s coal-fired power plants.

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