Economic Evaluation of Flexibility in the Design of IGCC Plants with Integrated Membrane Reactor Modules

Abstract

Integrated Gasification Combined Cycle with embedded membrane reactor modules (IGCC-MR) represents a new technology option for the coproduction of electricity and pure hydrogen endowed with enhanced environmental performance capacity. It is viewed as an alternative to conventional coal-and gasfired power generation technologies. An IGCC-MR power plant needs to be techno-economically evaluated in the presence of irreducible regulatory and fuel market uncertainties for the potential deployment of an initial fleet of demonstration plants at the commercial scale. This paper applies a systematic methodological framework to assess the economic value of flexible alternatives in the design and operation of an IGCC-MR plant under the aforementioned sources of uncertainty. The main objective is to demonstrate the potential value enhancements associated with the long-term economic performance of flexible IGCC-MR project investments, by managing the uncertainty associated with future environmental regulations and fuel costs. The paper provides an overview of promising design flexibility concepts for IGCC-MR power plants and focuses on operational and constructional systems flexibility. Operational flexibility is realized through temporary plant shutdown with considerations of regulatory and market uncertainties. Constructional flexibility is realized by considering the installation of a Carbon Capture and Storage (CCS) unit at three strategic periods: (1) installation at the initial construction phase, (2) retrofitting at a later stage, and (3) retrofitting at a later stage with preinvestment. Monte Carlo simulations and financial analysis demonstrate that, in the presence of irreducible uncertainty, the most economically advantageous flexibility option is to install CCS in the initial IGCC-MR construction phase. C⃝ 2015 Wiley Periodicals, Inc. Syst Eng 18: 208-227, 2015

Evolution of systems engineering scholarship from 2000 to 2015, with particular emphasis on software

“…Connelly discussed the economics of biofuels for the aviation sector, suggesting the best technology investments. Zhang and Cardin modeled the economics of flexibility, the first in power plant architectures and the second in liquefied natural gas technology.…”

“…Connelly showed how to choose the best technology maturation investments for an uncertain future. Zhang applied a systemic methodology to selecting alternative designs for power plants. Cardin addressed decision methodologies to select which capital‐intensive improvements to fund in liquefied natural gas technologies.…”

“…Fricke looked at how to adapt best to expected changing requirements. In contrast, in 2015, 7 of the 29 articles addressed one of the following quality attributes: Privacy, Flexibility, Modularity, Adaptability, and Evolvability . Kilicay‐Ergin addressed “utility” in general, correlating to quality attributes.…”

Economic performance evaluation of process system design flexibility options under uncertainty: The case of hydrogen production plants with integrated membrane technology and CO2 capture

“…Within this context, Al-Mutairi and El-Halwagi [27] developed a rigorous and insightful approach for a class of process systems focusing on facility retrofitting, process scheduling, and system operation in order to maximize profits generated in response to uncertainty that underlies market demands and environmental regulations. Additionally, Zhang et al [28] evaluated potentially value-enhancing flexibility options for Integrated Gasification Combined Cycle (IGCC) power plants with embedded membrane reactor modules (IGCC-MR) under various uncertain CO 2 emissions tax scenarios.…”

“…Flexibility in engineering design can be classified into two categories: flexibility -on‖ engineering systems and flexibility -in‖ engineering systems [23,24,28]. Typically, flexibility options -on‖ engineering systems are recognized as operational flexibility where managerial decision rules are based on the system operation and management.…”