In September 2021, Iceland opened the largest carbon-storage facility in the world. But what are the benefits of this facility, is it profitable and will it have a major impact on our future?
Orca energy and cost input
The carbon dioxide plant has the name Orca and was built by the Swiss company Climeworks. According to Bloomberg, the plant cost between $10 million and $15 million to build and uses energy from geothermal power plants in Iceland to operate.
For each ton of CO2, the plant requires 2,000 kWh of heat for the carbon dioxide sequestration process and 650 kWh of electricity to power the fans.
Orca CO2 Gains
The power plant accomplishes to sequester 4,000 tonnes of CO2 annually. That’s the equivalent of 870 combustion-powered cars. The gas is pumped 1000 meters deep into the ground and converted into carbonates which store the carbon forever.
Orca roughly standardized costs
Now, to determine what Orca’s running costs are per ton of CO2, we first need the average electricity prices from Iceland. This is because a geothermal power plant could also sell electricity to consumers as an alternative.
Statista shows us an average price of 13.41 euro cents per kWh.
So the storage cost of one ton of CO2 from Orca costs:
2650 kWh per one ton of CO2 * 0.1341€ per kWh = 355€ per ton of CO2 (operation cost)
Since we also have to consider construction costs, for simplicity we will depreciate them over a 10-year period:
$15 million / 10 years = $1.5 million per year
To add them to the annual carbon storage:
$1.5 million / 4000 tonnes of CO2 = $375 per ton of CO2 = 321.03€ per ton of CO2 (construction cost)
That sums up to a total Orca expense of roughly 676€ per ton of CO2.
Here are the prices per ton of CO2 for Climeworks website customers:
- Special Expedition (588€ for 0.6 tonnes): 980€ per ton of CO2
- Discoverer (252€ for 0.255 tonnes): 988€ per ton of CO2
- Explorer (156€ for 0.165 tonnes): 945€ per ton of CO2
In summary, storing one ton of CO2 costs about €700 and sells for about €950 to donors.
Then we have to calculate what we could achieve by investing in trees. According to topagrar.com, one hectare of forest costs about 12,700€ in Bavaria. With $15 million, that is 12.8 million Euros, we could buy about 1000 hectares of forest.
1,000 hectares of forest would save about 12,000 tons of CO2 if we assume that one hectare of forest grows an additional 12 cubic meters per year. According to Greenpeace Magazine, this is realistic.
So if we had invested in a forest instead of building the Orca plant, we would store three times as much CO2 annually!
But this calculation doesn’t even include the ongoing operating costs of the plant.
Since a forest owner can sell additional wood, crops and meat, but the Orca plant takes electricity and consumes heat energy, the calculation must be tackled differently with even more drastic conclusions.
|+ sequesters carbon dioxide||+ sequesters 4 times as much CO2|
|+ small in size||– consumes much area|
|– depreciates in value||+ appreciates in value|
|– end products are going to waste||+ produces useful byproducts (crops, meat, wood)|
|– expensive operation (electricity and heat)||+ runs by itself (no electricity needed)|
|– doesn’t provide habitant living area||+ provides habitant living area for biodiversity|
If we now assume that a German forest owner receives an additional €700 per tonnes of CO2 (that’s the Orca cost estimation), the income of a forest owner would be 7-times higher than it’s used to be.
Research in CO2 storage technology is well worth it, but it must be profitable before it can be scaled up. The Orca project is still very expensive, but there are already plans to build these plants at gigaton level instead of kiloton level.