scholarly journals Evaluating CCS Investment of China by a Novel Real Option-Based Model

2016 ◽  
Vol 2016 ◽  
pp. 1-15 ◽  
Author(s):  
Hongrui Chu ◽  
Lun Ran ◽  
Ran Zhang
Keyword(s):  
Carbon Capture ◽  
Real Option ◽  
Thermal Power ◽  
Carbon Capture And Storage ◽  
Carbon Price ◽  
Coal Price ◽  
Thermal Coal ◽  
Robust Least Squares ◽  
And Storage

Carbon capture and storage (CCS) technology is an effective method to mitigate CO2 emission pressure; however it is hard to be evaluated due to uncertainties. This paper establishes a real options analysis (ROA) model to evaluate CCS investment from the perspective of the existing thermal power plant by considering the fluctuations of electricity price, carbon price, and thermal coal price. The model is solved by the proposed robust Least Squares Monte Carlo method and China is taken as a case study to assess power plant’s CCS investment revenue. In the case study, robust ROA and ROA are compared under some CCS incentive factors. The results indicate that the proposed robust ROA is more realistic and suitable for CCS evaluation than common ROA to some extent. Finally, a policy schema to promote CCS investment is derived.

scholarly journals A continuous-time stochastic model to study the abandonment strategy of carbon capture and storage project

2021 ◽  
Author(s):  
Shuhua Chang ◽  
Yu Li ◽  
Yanqin Chang
Keyword(s):  
Continuous Time ◽  
Carbon Capture ◽  
Carbon Capture And Storage ◽  
Stopping Time ◽  
Carbon Price ◽  
The Government ◽  
Hamilton Jacobi Bellman ◽  
The Individual ◽  
Private Investors ◽  
And Storage

Abstract We build a continuous-time stochastic real options model to study the abandonment strategy of carbon capture and storage (CCS) project. Based on the stochastic optimal control theory, we solve the problem with the Hamilton-Jacobi-Bellman variational inequality (HJBVI) to derive the evolution of the optimal CCS investment over time. Using optimal stopping time, we establish a free boundary for each time node over the entire CCS construction stage as a function of the market carbon price and the individual project's remaining total deployment investment. The boundary is to help the investors decide whether to keep investing or abandon the project. Numerical simulations based on Chinese data are conducted by applying the finite element method with the power penalty. Concerning a hypothetical CCS project with a remaining total deployment investment of 10 billion RMB, our projected critical carbon prices relevant to its decisions on CCS project in 2020 are, respectively, 137.27 RMB/ton CO2 (0.123 RMB/kW·h) and 104.14 RMB/ton CO2 (0.093 RMB/kW·h). Being well below either threshold, if the current price prevails in 2020, the private investors will have no incentive to keep investing in or operate the above CCS project. It seems to us that this should indicate the exact right moment for the government to consider subsidizing them with at least the amount of money to prevent their abandonment of CCS from happening.

scholarly journals The application, required investments and operational costs of geological CO2 sequestration: a case study

2019 ◽  
Vol 8 (6) ◽  
pp. e12861023 ◽  
Author(s):  
Pedro Junior Zucatelli ◽  
Ana Paula Meneguelo ◽  
Gisele de Lorena Diniz Chaves ◽  
Gisele de Lorena Diniz Chaves ◽  
Marielce de Cassia Ribeiro Tosta
Keyword(s):  
Carbon Capture ◽  
Large Scale ◽  
Co2 Storage ◽  
Carbon Capture And Storage ◽  
Saline Aquifers ◽  
Natural Systems ◽  
Geological Co2 Sequestration ◽  
And Storage ◽  
Geological Formations

The integrity of natural systems is already at risk because of climate change caused by the intense emissions of greenhouse gases in the atmosphere. The goal of geological carbon sequestration is to capture, transport and store CO2 in appropriate geological formations. In this review, we address the geological environments conducive to the application of CCS projects (Carbon Capture and Storage), the phases that make up these projects, and their associated investment and operating costs. Furthermore it is presented the calculations of the estimated financial profitability of different types of projects in Brazil. Using mathematical models, it can be concluded that the Roncador field presents higher gross revenue when the amount of extra oil that can be retrieved is 9.3% (US$ 48.55 billions approximately in 2018). Additional calculations show that the Paraná saline aquifer has the highest gross revenue (US$ 6.90 trillions in 2018) when compared to the Solimões (US$ 3.76 trillions approximately in 2018) and Santos saline aquifers (US$ 2.21 trillions approximately in 2018) if a CCS project were to be employed. Therefore, the proposed Carbon Capture and Storage method in this study is an important scientific contribution for reliable large-scale CO2 storage in Brazil.

scholarly journals SCENARIOS FOR THE DEPLOYMENT OF CARBON CAPTURE AND STORAGE IN THE POWER SECTOR IN A PORTFOLIO OF MITIGATION OPTIONS

2020 ◽  
pp. 2150001
Author(s):  
JENNIFER MORRIS ◽  
HAROON KHESHGI ◽  
SERGEY PALTSEV ◽  
HOWARD HERZOG
Keyword(s):  
Carbon Capture ◽  
Power Plants ◽  
Carbon Capture And Storage ◽  
Carbon Price ◽  
Electricity Production ◽  
Base Case ◽  
Power Sector ◽  
Storage Potential ◽  
And Performance ◽  
And Storage

Using the MIT Economic Projection and Policy Analysis (EPPA) model, we explore factors influencing carbon capture and storage (CCS) deployment in power generation and its role in mitigating carbon emissions. We find that in the 2∘C scenario with EPPA’s base-case technology cost and performance assumptions, CCS plays an important role in the second half of the century: by 2100 CCS is applied to almost 40% of world electricity production, with a third coming from coal with CCS and the other two-thirds from gas with CCS. Results on CCS deployment depend on the assumed fraction of carbon captured in CCS power plants, as emissions constraints get tighter and the carbon price rises. Adding options for higher capture fractions or offsetting uncaptured emissions leads to greater deployment of CCS than in the 2∘C base case. We provide a sensitivity analysis by making favorable assumptions for CCS, nuclear and renewables. We also explore regional differences in the deployment of CCS. We find that US and Europe mostly rely on gas CCS, whereas China relies on coal CCS and India pursues both options. We also assess how these projections align with assessment of CO2 storage potential, and find that storage potential is larger than storage demand at both global and regional scales. Ultimately, we find that under stringent mitigation scenarios, the power sector relies on a mix of technological options, and the conditions that favor a particular mix of technologies differ by region.

scholarly journals Analyzing Regulatory Framework for Carbon Capture and Storage (CCS) Technology Development: A case study approach

2020 ◽  
Vol 4 (1) ◽  
pp. 107-148
Author(s):  
Mac Osazuwa-Peters ◽  
Margot Hurlbert
Keyword(s):  
Carbon Capture ◽  
Design Research ◽  
Technology Development ◽  
New Technology ◽  
Carbon Capture And Storage ◽  
Emission Trading ◽  
Case Study Approach ◽  
Study Approach ◽  
And Storage

Aim: This article provides insight into the portfolio of regulations advancing Carbon Capture and Storage (CCS) deployment. Using a taxonomy of policy portfolio tools adapted for regulations specific to CCS, this research identifies regulatory gaps as well as supports for CCS projects. Design / Research methods: Through a case study approach, this article analyzes the regulatory provisions in six jurisdictions (Texas, North Dakota, the U.S, Saskatchewan, Alberta and Canada) which have a successful CCS facility. Analyzing the provisions and content of regulations in these jurisdictions, this article highlights regulatory supports or areas of gaps for CCS projects in each jurisdiction. Conclusions / findings: There is no uniform definition or categorization of CO2 as a hazard, waste, pollutant or commodity across jurisdictions. This has serious impact on CO2 transport, especially across jurisdictions. It also impacts the administration of storage systems for CCS facilities. Regulations focusing primarily on technical aspects of CCS including capture, transport, and liability predominate while there are less regulatory provisions for the financial aspects of CCS technology as well as public engagement and support. While capital grants and emission and tax credits are the predominant financial issues covered in regulations, contract for differences, streamlining emission trading across borders and enhancing cooperation and multilevel engagement in CCS warrant more attention. Originality / value of the article: Many scenarios to maintain global warming below 2 degrees Celsius require combinations of new technology including CCS. The focus on CCS cost as a barrier to deployment overshadows the needs for regulatory support as a means of reducing uncertainties and de-risking CCS investments.  

CCS (carbon capture and storage) investment possibility in South East Europe: A case study for Croatia

Energy ◽  
2014 ◽  
Vol 70 ◽  
pp. 325-337 ◽  
Author(s):  
Alfredo Višković ◽  
Vladimir Franki ◽  
Vladimir Valentić
Keyword(s):  
Carbon Capture ◽  
Carbon Capture And Storage ◽  
East Europe ◽  
South East Europe ◽  
And Storage
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