BP says a “modest” price on carbon would make some types of renewable energy competitive with gas-fired power and would make carbon capture technology economical, according to the oil giant’s Technology Outlook.
In the annual report, BP says the power sector offers the greatest scope for reducing carbon emissions. In the power sector, which currently accounts for 38 percent of world primary energy demand, gas and coal-fired power are generally the most competitive today.
BP’s analysis predicts wind and solar will continue reducing costs at around 14 percent and 24 percent, respectively, per doubling in installed capacity, consistent with past performance, becoming more competitive over time. In North America, and ignoring taxes and subsidies, modern combined-cycle gas turbine power plants would have a cost advantage over coal today if policy makers were to adopt price on carbon dioxide of less than $40 per metric ton, BP says.
The company says by 2050 a carbon dioxide price of $80 per metric would make onshore wind technology competitive with gas-fired power, with utility scale solar photovoltaic close to being competitive, even accounting for the cost of managing intermittency. This price on carbon would also make carbon capture and sequestration with gas-fired power economic.
This isn’t the first time BP has urged global policy makers to adopt a carbon price. Earlier this year, BP warned CO2 emissions will increase by 1 percent each year to 2035 — or 25 percent in total — unless policy makers put a “meaningful global price on carbon.” according to the oil giant’s latest energy outlook.
Shell and BP are among more than two dozen major companies — including Walmart, ExxonMobil and General Electric — that have integrated a price on carbon emissions into their long-term business plans, according to a CDP report.