However, the IEA warned that without carbon capture and storage, neither coal nor gas-fired power plants could retain such a significant market share as they do in its “450 Scenario”, where gas-fired generation accounts for 16% of total generation in 2040 and coal-fired generation accounts for 12%.

The IEA noted that collectively countries accounting for around two-thirds of global energy-related emissions had either formally submitted their climate pledges for COP21 – known as Intended Nationally Determined Contributions – or have signalled their possible content, such as China.

A first assessment reveals these pledges will have a positive impact on future energy trends, but fall short of the major course correction required to meet the goal of limiting global temperature change by 2C.

“Given carbon pricing or other policy measures to incentivise low-carbon operations, equipping these plants with CCS can be a commercially sound investment, allowing them to operate for more hours,” the report stated.

“The retrofit of existing plants with CCS can provide plants with a new lease on life as low-carbon generators, which could be particularly important in countries like China that already have a large fleet of coal- and gas-fired power plants and where coal prices are anticipated to remain relatively low.”

The IEA forecasts that in industry CO2 capture increases to more than 2 gigatonnes in 2040 in the 450 Scenario, playing an important role in putting the overall emissions from the sector on a declining path.

Most of this CCS capacity is installed in non-OECD countries, led by China, India, Russia and the Middle East, with lesser amounts in OECD countries, led by the US and Europe.

“Important industrial sectors, such as iron and steel, and cement, already see CCS as a serious abatement option if they are to achieve deep cuts in emissions,” the report stated.

“In large part, this is because the chemistry of their processes produces CO2 that cannot be avoided without radically changing inputs and products, with major knock-on implications for their value chains.

“In the 450 Scenario, CO2 capture is led by the cement sector [1Gt CO2 in 2040], iron and steel [nearly 500 million tonnes] and chemicals [about 300Mt CO2].”

The EIA identified that the two main challenges to widespread deployment of CCS technologies in the power sector were the need to bring down the costs to a level that sustained competition with other low carbon technologies and to establish plant sites where CO2 storage was available and economic.

“In addition, as with any new technology, it will be important to win public acceptance by addressing any concerns that may arise,” the report added.

“Stakeholder engagement and broad access to balanced information on all aspects of the technology can help mitigate risks of delays and unnecessary hurdles.

“The commercial-scale CCS projects underway today are providing information about the costs [though they are still first-of-a-kind costs].

“In 2014, the first commercial-scale CCS power plant came online in Canada – SaskPower Boundary Dam Unit 3 – after the retrofitting of an existing coal-fired facility at a cost of around $6000 per kilowatt for the CO2 capture equipment.

“The developer has estimated that the next project could be completed at a cost 30% lower.”

However, beyond CCS, the IEA said a range of other considerations – not least being public acceptance and physical resource limitations – indicated the need for the strong deployment of other low-carbon power generation technologies.

To this end, the agency identified four additional utility-scale options to reduce CO2 emissions related to the power supply which were “potentially widely available”

• coal-to-gas switching, replacing coal-fired generation with gas-fired generation based

  on the existing fleet of power plants

• new onshore wind projects
• new utility-scale solar PV installations
• new coal- or gas-fired power plants equipped with CCS or retrofitting existing coal and gas-fired power plants with CCS.