Incentives and 99% capture rate: Minimizing post-decision regret in a net-zero power world

• 99% capture rate CCS alters net-zero abate-or-replace decision for coal-fired power • With incentives, 99% capture CCS and DACS can be dominant choice for existing coal • Coal plant age is dominant variable for least-cost, net-zero technology decision • 99% capture CCS can lower financial regret over wide natural-gas price range To hasten power-sector decarbonization, the U.S. Congress legislated changes to the tax code to provide incentives for renewable and zero-carbon capacity expansion and increase existing 45Q incentives for carbon capture and storage (CCS) and direct air capture and storage. We conduct both detailed deterministic and stochastic techno-economic analyses of existing coal-fired electric generating units (CFEGUs) to determine the least-cost solution for a net-zero abate-or-retire-and-replace decision with 17 fungible technologies. Our analysis indicates that CCS capacity at a 99% capture rate is often economically preferable to renewable and zero-carbon capacity when a 4-hour (or greater) adequacy constraint is imposed. We also show that additional CCS capacity becomes financially viable when the CFEGU economic life matches the incentive duration. Importantly, our analysis indicates that the deployment of 99% capture rate CCS can decrease the expected post-decision regret and increase the ease of this net-zero decision.