An Investment Feasibility Analysis of CCS Retrofit Based on a Two-Stage Compound Real Options Model

Cui, Herui; Zhao, Tian; Wu, Runlong

doi:10.3390/en11071711

Cited by 6 publications

(5 citation statements)

References 53 publications

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“…The concept of avoidance cost takes full account of the energy consumption of CCS [113]. Real options and net present value (NPV) methods are currently used to evaluate investment decisions of CCS projects [114,115]. However, in comparison, due to the consideration of uncertainty and investment flexibility, the real option method has better applicability in evaluating CCS investment [116,117].…”

Section: Methodsmentioning

confidence: 99%

A Review of Carbon Capture and Storage Project Investment and Operational Decision-Making Based on Bibliometrics

Hou

Wang

et al. 2018

Energies

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The research on carbon capture and storage (CCS) project planning and investment and operational decision-making can provide a reference for enterprises to invest in CCS and for policy-makers to formulate policies to promote CCS development. So what are the current research hotspots in this field and the gaps that still need to be further studied in the future? This paper reviews the research in the field by a bibliometric analysis. The results show that the research in this field first focus on cost analysis, followed by project investment evaluation, project planning (cost curve and pipeline network), and project operation. In particular, fossil fuel power plants, pipeline transportation, and oil fields are the most crucial objects in the three technical links of CCS projects, respectively. Policies, carbon pricing, and uncertainty in cost and benefits are factors that are mainly discussed in this field. The methods used for CCS project planning are cost curve model and optimization model. The real option approach is suitable for the evaluation of investment decision-making. The evaluation of operational decision is mostly based on optimization model. The future research directions can be summarized as five points: (1) continuously and systematically update the calculated costs in the current research to the unified price of the latest year; (2) calculate the cost curve from the perspective of emission sources; (3) expand the planning region of pipeline network to the country, continent, and even the entire world; (4) pay more attention to the investment assessment of the CCS project that may be implemented with low cost and high return; and (5) analyze the optimal operation mode of CCS in the low-load power system.Energies 2019, 12, 23 2 of 22 of global CO 2 emissions come from processes such as the combustion and processing of energy [8]. Therefore, reducing energy-related CO 2 emissions is a key measure to mitigate climate change.The need to address climate change has reached a global consensus [9]. Many countries have introduced regulatory policy schemes for carbon reduction [10]. Mitigating climate change can start from three aspects: (1) efficiency improvement, (2) replacing fossil fuels with low-carbon energy, and (3) capture and storage of CO 2 . Although improving energy efficiency is the fundamental way to reduce greenhouse gas emissions by controlling growth in total energy demand, its potential for reducing emissions is gradually decreasing. The goal of developing low-carbon energy is to reduce emissions by reducing fossil fuel demand. However, the low-carbon energy development in some regions, especially in the low-carbon energy resource-poor regions, is not economically viable in the short term. In the foreseeable future, our world will still rely heavily on fossil energy [11].Carbon dioxide capture and storage (CCS) technology is a potential approach for mitigating climate change. Overall schematic of carbon capture and storage concept is shown in Figure 1. CCS technology is the key means to achi...

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Section: Methodsmentioning

confidence: 99%

A Review of Carbon Capture and Storage Project Investment and Operational Decision-Making Based on Bibliometrics

Hou

Wang

et al. 2018

Energies

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“…The literature also presents models to deal with compound options (i.e. considering more than one options), but these methods are mostly academic and too complex to be implemented by practitioners [9,[51][52][53].…”

Section: Real Options In the Energy Sectormentioning

confidence: 99%

A simple-to-implement real options method for the energy sector

Locatelli

Mancini

Lotti

2020

Energy

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Investment appraisal methods based on real options are gaining popularity in academia, while the adoption by practitioners is still infrequent. Having in mind practitioners, the method is designed to be: conceptually easy to understand, based on realistic hypotheses and data available, able to provide quantitative indications and strategic guidelines. The method is based on a systematic simulation of several scenarios generated according to exercise thresholds of relevant investment parameters. An exercise threshold gives to the investors the exercise right of taking some decision, for instance building a power plant. An exercise threshold is therefore a rule to decide whether to exercise or not a certain option on the basis of the values of one or more state variables. Consequently, the probability distribution of the Net Present Value (or analogous indicator) of the investment is a function of the state variables and the exercise threshold. Systematically changing the exercise thresholds allow to (A) establishing the "real option value" and (B) calculate relevant indications about when and on which type of plant to invest. The method is presented in detail and applied to a case study assessing the investment appraisal of: coal plant, gas plant, large nuclear reactor and small modular reactor.

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“…Geochemical reactions occur in a variety of environmental systems, such as chemical weathering on the surface of the earth, − CO 2 –brine–mineral interactions in carbon capture and storage systems, − enhanced oil recovery, − and subsurface energy storage systems. − These reactions are rather complex as natural environmental systems are often heterogeneous. For example, the CO 2 -induced geochemical reactions in subsurface storage systems are impacted by many factors, such as injection rate, formation depth, porosity, permeability, saturation, mineral composition, etc …”

Section: Introductionmentioning

confidence: 99%

Estimation of Mineral Accessible Surface Area from Mineral Abundance and Clay Content

Qin

Salek

Asadi

et al. 2023

ACS Earth Space Chem.

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The mineral reactive surface area is often quantified through a wide range of approaches (e.g., Brunauer−Emmett− Teller adsorption, geometry approximation, and imaging techniques). As such, values vary 1−5 orders of magnitude which can result in large discrepancies when used in reactive transport models to simulate geochemical reaction rates. Simulations carried out using mineral accessible surface areas (ASAs) determined from a coupled 2D and 3D imaging approach have shown better match with reaction rates measured in core-flood experiments. However, such image processing requires large amounts of time and resources. In this work, the possibility of estimating mineral ASAs from easily measured properties like mineral abundance and porosity is explored. Six sandstone samples of varying compositions were studied along with data from three additional samples from the previous literature. Mineral ASAs were quantified using a combined 2D scanning electron microscopy and 3D X-ray nano-computed tomography imaging approach. Sample properties like mineral accessibility, mineral ASAs, connected porosity, and clay content were compared to explore potential correlations between properties. Overall, it was observed that mineral accessibility can be predicted where feldspar mineral accessibility generally increases with increasing abundance and quartz accessibility decreases with increasing clay content. Mineral ASAs vary between samples, depending on the relative abundance of minerals and overall pore connectivity. While the ASA of quartz decreases with abundance, albite and carbonate mineral ASAs increase with abundance. Quantitative observations, including predictive relationships for ASAs from porosity and mineral volume fraction, are developed. Estimations of ASAs and mineral accessibility from more easily quantifiable properties can largely reduce the required extent of image analysis.

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An Investment Feasibility Analysis of CCS Retrofit Based on a Two-Stage Compound Real Options Model

Cited by 6 publications

References 53 publications

A Review of Carbon Capture and Storage Project Investment and Operational Decision-Making Based on Bibliometrics

A Review of Carbon Capture and Storage Project Investment and Operational Decision-Making Based on Bibliometrics

A simple-to-implement real options method for the energy sector

Estimation of Mineral Accessible Surface Area from Mineral Abundance and Clay Content

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