Benefit evaluation of investment in CCS retrofitting of coal-fired power plants and PV power plants in China based on real options

Fan, Jing-Li; Xu, Mao; Yang, Lin; Zhang, Xian

doi:10.1016/j.rser.2019.109350

Cited by 53 publications

(15 citation statements)

References 47 publications

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“…28 Wang et al proposed optimal CCUS planning for China's power sector under the 2 °C constraint, with an average transportation distance of less than 115 km. 29 However, the following important factors may have been overlooked: (i) the uncertainty of deployment led by technology competition 30 (like CCUS vs renewables), public acceptance, 31,32 and employment impacts; 33,34 (ii) the differences in investment cost caused by spatial heterogeneity of emission sources and storage sites; (iii) the influences of terrain areas on transportation route selection.…”

Section: Introductionmentioning

confidence: 99%

Assessing Representative CCUS Layouts for China’s Power Sector toward Carbon Neutrality

Tang

Zhang

Chen

2021

Environ. Sci. Technol.

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China’s carbon neutrality target is building momentum for carbon capture, utilization, and storage (CCUS), by which the power sector may attain faster decarbonization in the short term. However, an overall CCUS pipeline network blueprint remains poorly understood. This study, for the first time, links the China TIMES model and ChinaCCUS Decision Support System 2.0 to assess representative CCUS layouts for the power sector toward carbon neutrality, with the level of deployment and the maximum transportation distance from emission sources to storage sites considered. The total length of the proposed layouts under the low, medium, and high levels of deployment are about 5100, 18,000, and 37,000 km, with the annum CO2 captures of 0.4, 1.1, and 1.7 Gt, respectively, whereas pipes of medium diameters (12, 16, and 20 in) account for the majority in all three plans. As the deployment rate increases, the layouts generally spread from Northeast, North, and Northwest China to East, South Central, and Southwest China. However, some local exceptions take place considering terrain areas that the pipeline passes through. In addition to engineering guidance, this assessment also illuminates the opportunity for improving the efficiency of CCUS based on carbon pricing.

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Section: Introductionmentioning

confidence: 99%

Assessing Representative CCUS Layouts for China’s Power Sector toward Carbon Neutrality

Tang

Zhang

Chen

2021

Environ. Sci. Technol.

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“…However, NPV with risk provides the simulations with Monte Carlo, and ROA provides a higher degree of flexibility in terms of taking up the new project, abandonment and delay of the energy project (Sisodia et al, 2016). Real options with NPV is a widely used method for determining systematic risk under policy regime (Fan, Xu, Yang, & Zhang, 2019; Fleten, Linnerud, Molnár, & Nygaard, 2016; Kim, Park, & Kim, 2017; Loncar, Milovanovic, Rakic, & Radjenovic, 2017; Penizzotto, Pringles, & Olsina, 2019; Shimbar & Ebrahimi, 2020). For the current study, we used the NPV risk method to evaluate various scenarios.…”

Section: Literature Reviewmentioning

confidence: 99%

Strategic business risk evaluation for sustainable energy investment and stakeholder engagement: A proposal for energy policy development in the Middle East through Khalifa funding and land subsidies

et al. 2020

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This article projects business risk through deferent industrial scenarios in concentrated solar investments in the United Arab Emirates (UAE). Nationwide, the government seeks a sustainable solution through energy policy development and engagement of the stakeholders for clean energy generation at wider level in the long run. Support has been extended through various support schemes. In the current study, Monte Carlo simulations and net present value (NPV) risk are used to analyse the return on investment. A 5 MW concave solar panel project is evaluated. We have assessed the impact of local factors on profits through NPV. The study proposes that a higher NPV is expected if the concave solar panel project is financed 50% by Khalifa funding. The study also proposes a robust policy and highlights the opportunity of business profitability if the government subsidises land leasing with respect to each scenario. Additionally, the study also proposes a policy to maintain the interests of investors in the UAE.

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“…An interesting concept on switching option concerning CCGT (shutting down and restarting of gas-fired blocks) was developed by Kryzia et al [31]. Other papers on fuel switch options were written lastly by Kujanpää and Pursiheimo [32] (switching from coal to biomass, natural gas to biomass, fuel oil to pyrolysis oil), Han et al [33] (replacing coal with alternative fuels-natural gas, biomass, oil, electric boilers), Ghoddusi [34] (option to change gasoline at times to crude oil), Elias et al [35], Fan et al [36], and other authors.…”

Section: Literature Reviewmentioning

confidence: 99%

Valuation of Decision Flexibility and Strategic Value in Coal Gasification Projects with the Option-To-Switch between Different Outputs

2020

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Coal gasification has been promoted as a sophisticated clean energy technology alternative to coal burning these days. Aside from the usual technical difficulties, economic issues of such projects—especially valuation challenges—are important problems that practitioners usually struggle with. This is because of the major extent of managerial flexibility linked with specific characteristics of coal gasification projects, in particular, possibilities to mothball/restart manufacturing lines, or change between different outputs. The value of such flexibilities may be well assessed by real options valuations. The aim of this paper is to show that for the coal gasification technologies the real options valuation is more suitable than traditional discounted cash flow technique. This approach was applied to calculate an integrated plant that can produce either electricity or methanol. As the valuation approach the multiplicative stochastic process was used. As a consequence, binomial lattices of end-product (electricity and methanol) were developed. Then, in regard to them (reference instruments), two corresponding lattices of net cash flows (consecutive instruments) were created. In the end, two trees of switching option value were developed—one for electricity production as an initial mode, and the second for methanol production, delivering expanded net present (strategic) value.

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Benefit evaluation of investment in CCS retrofitting of coal-fired power plants and PV power plants in China based on real options

Cited by 53 publications

References 47 publications

Assessing Representative CCUS Layouts for China’s Power Sector toward Carbon Neutrality

Assessing Representative CCUS Layouts for China’s Power Sector toward Carbon Neutrality

Strategic business risk evaluation for sustainable energy investment and stakeholder engagement: A proposal for energy policy development in the Middle East through Khalifa funding and land subsidies

Valuation of Decision Flexibility and Strategic Value in Coal Gasification Projects with the Option-To-Switch between Different Outputs

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