Flexible CO2 Capture and Storage in a Transactive Energy and Carbon Market

By Mingyu Yan, Hamid Arastoopour and Mohammad Shahidehpour

The excessive CO₂ emission has resulted in major challenges for the development of a sustainable human society. CO₂ emissions contribute to the climate change and global warming, and the recurrent of more intense natural disasters (e.g., hurricanes, floods, fires, ice storms). Fossil-fueled power generation contributes to over 40% of hazardous emissions globally, and proper mitigations of CO₂ emissions can intensify the decarbonization of our communities.

Carbon capture and storage (CCS) technology is one of the most promising options in reducing the CO₂ vented by power generators, which can evolve into CO₂-captured power generators (CCPGs). So, once a power generation system combusts the fossil fuel and vents the flue gas, the CCS system would capture the CO₂ emission from the vented flue gas and store the CO₂. The use of CCS will not only reduce the CO₂ emission but also enhance the operational flexibility of conventional fossil-fueled generators. Figure 1 shows the commercial CCS system which consists of scrubber, stripper, compressor, and storage. The scrubber would absorb the CO₂ in the vented flue gas by using the solvent. The stripper separates the CO₂ from the solvent, and further delivers the CO₂ to the compressor. The compressor compresses the gaseous CO₂ into concentrated stream CO₂, while the storage is applied to store the concentrated stream CO₂. In a near future, a higher efficient CO₂ absorption based on solid sorbent will be available which will make the CCS system more economically feasible.

In CCPGs, CCS and power generation systems work independently. The CCS system, which consumes a small portion of the power produced by the power generation system, can be applied to reduce the peak load and accommodate the variability of renewable energy resources in the power generation system. The CCS system can be charged at off-peak hours to capture CO₂ like a battery and release power to reduce the load at peak hours (i.e., peak load shifting). Figure 2 shows the wind power curtailment with and without the CCS system, where the CCS can significantly reduce the wind curtailment. As the number of CCS systems is increased from 0 to 2, the wind power curtailment is decreased from 16.0% to 7.7%. However, the CCS system could be costly, add to the operational complexity of conventional fossil-fueled generators, and reduce the generators’ efficiency as it consumes some of the generated power. Such drawbacks are major obstacles to the utilization of the CCS system and widespread deployment of CCPGs. To counter some of these drawbacks, we propose a transactive market for energy and carbon, which can incentivize additional investments in CCS facilities.

Transactive Energy and Carbon Market for Mitigating the CO₂ Emission:

Transactive energy market was proposed for trading energy among microgrids (MGs), and struck a balance of local energy production and consumption. In a transactive energy market, participating MGs with their specific energy production and consumption profiles can use market signals for exchanging energy services in a power distribution network. The energy trading can incentivize MGs to full use of local energy productions to provide affordable energy to their respective customers. The transactive energy market can promote the use of demand response when the available energy resources cannot fully supply local loads and the imported grid power is expensive. Accordingly, MGs can shift non-critical loads to maintain the local power balance at the lowest cost in a transactive energy market.

A similar idea is applicable to a transactive energy and carbon market where a carbon cap-and-trade carbon emission trading market is considered to reduce CO₂ emissions. In this market, each MG uses its carbon right, which is the right to vent a limited amount of CO₂, and trade both energy and carbon to maximize its payoff. If an MG intends to vent more CO₂ than its carbon right for producing energy, the MG can purchase additional carbon right from its peers or reduce its power generation to satisfy its carbon right obligation. The transactive energy and carbon market will accordingly incentivize MGs to perform a cost/benefit analysis for the installation of the CCS system and thus reducing their CO₂ emission.

Figure 3 shows the MG payoff as a function of the CO₂ price. As the CO₂ price increases, MGs can gain more by selling more carbon right. Therefore, the MG payoff increases as the CO₂ price is increased. Since the CCS system can capture the CO₂, MGs equipped with the CCS system can sell more carbon right and enhance their payoffs. Let’s assume that 2 CCS systems are installed. Figure 4 shows the MG payoffs as a function of carbon and electricity prices. The CCS system can capture CO₂ which can be traded and increase the MG payoff as the CO₂ price is increased. As electricity prices increase, MGs which would have to purchase energy from the power grid will reduce their payoffs.

Figure 5 shows the traded carbon rights and power with and without electricity network constraints. The MGs’ total payoffs are $ 14,316 and $ 11,629, without and with electricity networks, respectively. Here, network constraints would limit MG trades and lower the total payoff by 19%. In addition, since the electricity network could restrict the trades among MGs, the MGs would have to balance their load by utilizing their own distributed energy resources (e.g., microturbines). In such cases, MGs would vent more CO₂ and could be in need of purchasing additional carbon rights. Accordingly, as shown in Figure 5(b), carbon right trades could be increased considering the electricity network.

This article edited by Vigna Kumaran

For a downloadable copy of the January 2021 eNewsletter which includes this article, please visit the IEEE Smart Grid Resource Center.

Dr. Mohammad Shahidehpour is the Bodine Chair Professor of Electrical and Computer Engineering and Director of the Robert W. Galvin Center for Electricity Innovation at Illinois Institute of Technology (IIT). His project on Perfect Power Systems has converted the entire IIT Campus to an islandable microgrid. He has co-authored 6 books and 750 technical papers on electric power system operation and planning, and served as the founding Editor-in-Chief of the IEEE Transactions on Smart Grid.  Dr. Shahidehpour is the recipient of the 2009 honorary doctorate from the Polytechnic University of Bucharest. He is a Fellow of IEEE, Fellow of the American Association for the Advancement of Science (AAAS), Fellow of the National Academy of Inventors (NAI), and an elected member of the US National Academy of Engineering (NAE). He is also listed as a highly cited researcher on the Web Science (ranked in the top 1% by citations demonstrating significant influence among his peers).

Mingyu Yan (S’18) received the B.S. degree from the College of Electrical Engineering, Zhejiang University, Hangzhou, China, in 2016 and the master’s degree from the Huazhong University of Science and Technology, Wuhan, China in 2018. He is currently working toward the Ph.D. degree with the Robert W. Galvin Center for Electricity Innovation, Illinois Institute of Technology, Chicago, IL, USA. His research interests include power system operation and planning, power market, multiple energy system integration, smart cities and power system reliability.

Hamid Arastoopour, Ph.D., is Henry R. Linden Professor of Engineering and director of the Wanger Institute for Sustainable Energy Research (WISER) at Illinois Institute of Technology. His current research interest is particle technology and computational fluid dynamics (CFD) motivated by energy and sustainability applications including CO₂ capture, wind and concentrated solar energy. He is the recipient of Sustainable Engineering Forum (SEF), Thomas Baron Award in Fluid/Particle Systems, Donald Q. Kern Award in Heat Transfer and Energy Conversion, PTF Lectureship Award in Fluidization, Ernest W. Thiele Award, and PTF Fluidization Process Recognition Awards from American Institute of Chemical Engineering (AIChE). He is also the recipient of the University Excellence in Teaching Award. He holds 16 U.S. patents, published two books, and about 140 articles. He is serving on the journal editorial board of Sustainability and Fluid. He is a Fellow of the National Academy of Inventors (NAI) and AIChE.