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 Holistic Assessment of Carbon Capture and Utilization Value Chains

Environments ◽  
2018 ◽  
Vol 5 (10) ◽  
pp. 108 ◽  
Author(s):  
Tryfonas Pieri ◽  
Alexandros Nikitas ◽  
Arturo Castillo-Castillo ◽  
Athanasios Angelis-Dimakis
Keyword(s):  
Value Chain ◽  
Carbon Capture ◽  
Carbon Capture And Storage ◽  
Holistic Approach ◽  
Value Chains ◽  
The European Union ◽  
Carbon Capture And Utilization ◽  
Holistic Assessment ◽  
The Individual ◽  
And Storage

Carbon capture and utilization (CCU) is recognized by the European Union, along with carbon, capture and storage (CCS), as one of the main tools towards global warming mitigation. It has, thus, been extensively studied by various researchers around the world. The majority of the papers published so far focus on the individual stages of a CCU value chain (carbon capture, separation, purification, transportation, and transformation/utilization). However, a holistic approach, taking into account the matching and the interaction between these stages, is also necessary in order to optimize and develop technically and economically feasible CCU value chains. The objective of this contribution is to present the most important studies that are related to the individual stages of CCU and to perform a critical review of the major existing methods, algorithms and tools that focus on the simulation or optimization of CCU value chains. The key research gaps will be identified and examined in order to lay the foundation for the development of a methodology towards the holistic assessment of CCU value chains.

Continuous-Time Optimization Model for Source–Sink Matching in Carbon Capture and Storage Systems

2012 ◽  
Vol 51 (30) ◽  
pp. 10015-10020 ◽  
Author(s):  
Raymond R. Tan ◽  
Kathleen B. Aviso ◽  
Santanu Bandyopadhyay ◽  
Denny K. S. Ng
Keyword(s):  
Continuous Time ◽  
Optimization Model ◽  
Carbon Capture ◽  
Storage Systems ◽  
Carbon Capture And Storage ◽  
Time Optimization ◽  
Source Sink ◽  
And Storage

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 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 Implementation of Indonesia coal downstream policy in the trend of fossil energy transition

2021 ◽  
Vol 882 (1) ◽  
pp. 012083
Author(s):  
C M Yasin ◽  
B Yunianto ◽  
S Sugiarti ◽  
G K Hudaya
Keyword(s):  
Carbon Capture ◽  
Coal Gasification ◽  
Carbon Capture And Storage ◽  
Value Added ◽  
Energy Transition ◽  
Coal Slurry ◽  
Domestic Use ◽  
The Government ◽  
Environmental Feasibility ◽  
And Storage

Abstract The implementation of downstream coal policies in Indonesia is regulated in Law Number 3 of 2020 to optimize coal’s domestic use and value-added. The policy is also supported by the issuance of fiscal, non-fiscal, and regional incentives. In Law Number 3 of 2020, the government of Indonesia states six types of coal downstream: coal upgrading; coal briquetting; cokes making; coal liquefaction; coal gasification; and coal slurry, yet the government has not defined which downstream coal products should be prioritized. Several parameters must be considered in implementing the downstream coal policy, those are the availability of coal and its characteristics, proven technology, economic and environmental feasibility. This study examines the mineral and coal sector regulation, taxation, coal resources and reserves, technology, and economics. In addition, to implement the commitment of reducing CO2 emissions, this study also considers applying Carbon Capture and Storage (CCS) or Carbon Capture, Utilization, and Storage (CCUS) technology to implement downstream coal policy.

scholarly journals The Changing Legislation and Regulation of Carbon Capture and Storage: Impacts on Purpose, Policy, and Projects

2011 ◽  
Vol 49 (2) ◽  
pp. 305
Author(s):  
Michael G Massicotte ◽  
Alan L Ross ◽  
Chidinma B Thompson
Keyword(s):  
Carbon Dioxide ◽  
Carbon Dioxide Emissions ◽  
Carbon Capture ◽  
Carbon Capture And Storage ◽  
The Government ◽  
Reduce Carbon Dioxide ◽  
The Impact ◽  
And Storage

The Government of Alberta is implementing carbon capture and storage (CCS) technology in order to reduce carbon dioxide emissions. With the enactment of the Carbon Capture and Storage Statutes Amendment Act, 2010 in November 2010, Alberta became the first jurisdiction in Canada to have comprehensive CCS legislation. This article describes CCS technology, considers the impact of the new legislation and potential interjurisdictional conflicts, and briefly compares the CCS legislation of other jurisdictions with Alberta’s legislation.

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