Technoeconomic Performance Analysis of DAC: Case Studies in California and Scotland
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Date
2024-08-19
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The University of Edinburgh
Abstract
Direct Air Capture (DAC) technologies, particularly those utilizing liquid sorbent systems, are increasingly recognized as essential tools for mitigating global climate change. However, their economic feasibility is highly sensitive to various input parameters. This study developed a comprehensive generic DAC model to identify the most significant input parameters affecting techno-economic performance, with a specific focus on CO₂ capture efficiency, capital expenditure (CAPEX), carbon pricing, and the annual growth rate of carbon prices. Detailed sensitivity analysis identified CAPEX and CO₂ capture efficiency as the most critical determinants of DAC economic performance. Enhancing CO₂ capture efficiency significantly reduced the Levelized Cost of CO₂ Capture (LCOC) from $151.43/ton to $125.50/ton, while a 20% increase in CAPEX drastically lowered the Internal Rate of Return (IRR) by up to 413%. The model was validated through case studies in California and Scotland. Results revealed that California’s favourable conditions—such as a lower fixed charge factor, higher carbon price growth, and a more aggressive annual growth rate—yield superior economic outcomes, including a Net Present Value (NPV) of $102.9 million and an IRR of 19%. In contrast, Scotland, despite its higher carbon price, faced increased CAPEX, leading to less favourable financial performance. The model's LCOC outcomes were validated against existing literature, aligning within the reported range of $94 to $232/ton, confirming its accuracy and relevance. These findings underscore the necessity for region-specific DAC deployment strategies and provide actionable insights for optimizing investments in DAC technologies, thereby supporting global climate mitigation efforts.
Description
The dissertation titled "Technoeconomic Performance Analysis of DAC: Case Studies in California and Scotland" explores the performance and economic viability of Direct Air Capture (DAC) technologies. The study focuses on liquid sorbent-based DAC systems, emphasizing their potential as a climate change mitigation tool by capturing carbon dioxide directly from the atmosphere.
The key contributions of the research include:
Generic Model Development: A comprehensive DAC model was created, incorporating critical parameters like CO₂ capture efficiency, capital expenditure (CAPEX), operational expenditure (OPEX), carbon pricing, and the annual growth rate of carbon prices.
Sensitivity Analysis: The study identifies the most impactful input parameters affecting techno-economic performance. It highlights that enhancing CO₂ capture efficiency significantly lowers costs, while increased CAPEX drastically reduces financial returns.
Case Studies: Comparative analysis between California and Scotland reveals region-specific challenges and opportunities. California, with lower fixed charge factors and higher carbon price growth, demonstrates superior financial outcomes. Scotland's higher CAPEX results in less favorable economic performance despite its renewable energy infrastructure.
Validation: The Levelized Cost of CO₂ Capture (LCOC) outcomes were validated against existing literature, ensuring the model's accuracy.
Insights and Recommendations: The study provides actionable insights for optimizing DAC investments and guiding policy, emphasizing the importance of region-specific deployment strategies.
The dissertation contributes to the broader field of climate change mitigation, particularly in developing cost-effective, scalable solutions for carbon removal, and supports global goals for achieving net-zero emissions.
Keywords
Direct Air Capture (DAC), CO₂ capture efficiency, Capital expenditure (CAPEX), Levelized cost of CO₂ capture (LCOC), Climate change mitigation, Carbon price.