IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v229y2018icp326-334.html
   My bibliography  Save this article

Carbon capture and storage (CCS) retrofit potential of coal-fired power plants in China: The technology lock-in and cost optimization perspective

Author

Listed:
  • Fan, Jing-Li
  • Xu, Mao
  • Li, Fengyu
  • Yang, Lin
  • Zhang, Xian

Abstract

Carbon capture and storage (CCS) has been discussed intensively in China; however, the CCS technology lock-in risk has been neglected for a long time and may have a negative impact on understanding the CCS application potential. Thus, from the perspective of avoiding a technology lock-in, a learning curve model and a cost-optimization model are employed in this study to explore the total cost of CCS commercialization and the national and provincial CCS retrofit potential of coal-fired power plants in China. The results show that if the second-generation CCS technologies are not commercially applied by 2040, coal-fired power plants in China may face a huge risk of being locked in by the first-generation technologies with a retrofit potential of only 0–143.63 GW (GW = 106 kW) and a cost of 13.39 billion USD. Advancing the CCS commercialization time to 2030 can reduce the technology lock-in risk greatly and increase the CCS retrofit potential to 431.01–499.90 GW, which would cost 54.3 billion USD. Considering the cost input, the technology lock-in risk, and the CCS retrofit demand, 2035 is regarded a suitable time for CCS commercialization in China with a retrofit potential of 143.63–431.04 GW and 31.46 billion USD cost input. Moreover, at the regional level, there is a great CCS retrofit potential of coal-fired power plants in Shaanxi, Hebei, and Inner Mongolia. Policymakers should provide greater support for the second-generation CCS technologies and promote them actively in 2030–2035, especially in Shaanxi, Hebei, and Inner Mongolia, to achieve CCS commercialization and control the CO2 emissions of coal-fired power plants in China.

Suggested Citation

  • Fan, Jing-Li & Xu, Mao & Li, Fengyu & Yang, Lin & Zhang, Xian, 2018. "Carbon capture and storage (CCS) retrofit potential of coal-fired power plants in China: The technology lock-in and cost optimization perspective," Applied Energy, Elsevier, vol. 229(C), pages 326-334.
  • Handle: RePEc:eee:appene:v:229:y:2018:i:c:p:326-334
    DOI: 10.1016/j.apenergy.2018.07.117
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261918311528
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.apenergy.2018.07.117?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Xian & Wang, Xingwei & Chen, Jiajun & Xie, Xi & Wang, Ke & Wei, Yiming, 2014. "A novel modeling based real option approach for CCS investment evaluation under multiple uncertainties," Applied Energy, Elsevier, vol. 113(C), pages 1059-1067.
    2. ., 2018. "Industrialization, globalization, and taxation," Chapters, in: The Ecology of Tax Systems, chapter 2, pages 10-25, Edward Elgar Publishing.
    3. Reyer Gerlagh & Bob van der Zwaan, 2006. "Options and Instruments for a Deep Cut in CO2 Emissions: Carbon Dioxide Capture or Renewables, Taxes or Subsidies?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 25-48.
    4. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    5. d'Amore, Federico & Mocellin, Paolo & Vianello, Chiara & Maschio, Giuseppe & Bezzo, Fabrizio, 2018. "Economic optimisation of European supply chains for CO2 capture, transport and sequestration, including societal risk analysis and risk mitigation measures," Applied Energy, Elsevier, vol. 223(C), pages 401-415.
    6. Sanna, Aimaro & Dri, Marco & Hall, Matthew R. & Maroto-Valer, Mercedes, 2012. "Waste materials for carbon capture and storage by mineralisation (CCSM) – A UK perspective," Applied Energy, Elsevier, vol. 99(C), pages 545-554.
    7. Li, H. & Yan, J., 2009. "Impacts of equations of state (EOS) and impurities on the volume calculation of CO2 mixtures in the applications of CO2 capture and storage (CCS) processes," Applied Energy, Elsevier, vol. 86(12), pages 2760-2770, December.
    8. Pao-Yu Oei and Roman Mendelevitch, 2016. "European Scenarios of CO2 Infrastructure Investment until 2050," The Energy Journal, International Association for Energy Economics, vol. 0(Sustainab).
    9. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    10. Hongyu Zhao & Xiaona Luo & Haijiao Zhang & Nannan Sun & Wei Wei & Yuhan Sun, 2018. "Carbon†based adsorbents for post†combustion capture: a review," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 8(1), pages 11-36, February.
    11. ., 2018. "The new global politics of research," Chapters, in: The New Global Politics of Science, chapter 1, pages 1-21, Edward Elgar Publishing.
    12. Li, Sheng & Zhang, Xiaosong & Gao, Lin & Jin, Hongguang, 2012. "Learning rates and future cost curves for fossil fuel energy systems with CO2 capture: Methodology and case studies," Applied Energy, Elsevier, vol. 93(C), pages 348-356.
    13. Zhou, Wenji & Zhu, Bing & Fuss, Sabine & Szolgayová, Jana & Obersteiner, Michael & Fei, Weiyang, 2010. "Uncertainty modeling of CCS investment strategy in China's power sector," Applied Energy, Elsevier, vol. 87(7), pages 2392-2400, July.
    14. Riahi, Keywan & Rubin, Edward S. & Schrattenholzer, Leo, 2004. "Prospects for carbon capture and sequestration technologies assuming their technological learning," Energy, Elsevier, vol. 29(9), pages 1309-1318.
    15. Grimaud, André & Lafforgue, Gilles & Magné, Bertrand, 2011. "Climate change mitigation options and directed technical change: A decentralized equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 33(4), pages 938-962.
    16. Fuss, Sabine & Szolgayova, Jana & Obersteiner, Michael & Gusti, Mykola, 2008. "Investment under market and climate policy uncertainty," Applied Energy, Elsevier, vol. 85(8), pages 708-721, August.
    17. Duan, Hong-Bo & Fan, Ying & Zhu, Lei, 2013. "What’s the most cost-effective policy of CO2 targeted reduction: An application of aggregated economic technological model with CCS?," Applied Energy, Elsevier, vol. 112(C), pages 866-875.
    18. Li, Mu & Rao, Ashok D. & Scott Samuelsen, G., 2012. "Performance and costs of advanced sustainable central power plants with CCS and H2 co-production," Applied Energy, Elsevier, vol. 91(1), pages 43-50.
    19. ., 2018. "Crises in the periphery of the global system," Chapters, in: All Fall Down, chapter 16, pages 110-120, Edward Elgar Publishing.
    20. Renner, Marie, 2014. "Carbon prices and CCS investment: A comparative study between the European Union and China," Energy Policy, Elsevier, vol. 75(C), pages 327-340.
    21. Chen, Liming & Felipe, Jesus & Kam, Andrew J.Y. & Mehta, Aashish, 2021. "Is employment globalizing?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 74-92.
    22. Viebahn, Peter & Daniel, Vallentin & Samuel, Höller, 2012. "Integrated assessment of carbon capture and storage (CCS) in the German power sector and comparison with the deployment of renewable energies," Applied Energy, Elsevier, vol. 97(C), pages 238-248.
    23. Crow, Daniel J.G. & Giarola, Sara & Hawkes, Adam D., 2018. "A dynamic model of global natural gas supply," Applied Energy, Elsevier, vol. 218(C), pages 452-469.
    24. Zhu, Lei & Fan, Ying, 2011. "A real options–based CCS investment evaluation model: Case study of China’s power generation sector," Applied Energy, Elsevier, vol. 88(12), pages 4320-4333.
    25. McDonald, Alan & Schrattenholzer, Leo, 2001. "Learning rates for energy technologies," Energy Policy, Elsevier, vol. 29(4), pages 255-261, March.
    26. McKeil A.C., 2018. "The Globalization of International Society," New Global Studies, De Gruyter, vol. 12(1), pages 119-121, April.
    27. Ou, Xunmin & Xiaoyu, Yan & Zhang, Xiliang, 2011. "Life-cycle energy consumption and greenhouse gas emissions for electricity generation and supply in China," Applied Energy, Elsevier, vol. 88(1), pages 289-297, January.
    28. Marie Renner, 2014. "Carbon prices and CCS investment: comparative study between the European Union and China," Working Papers 1402, Chaire Economie du climat.
    29. Yang, Lin & Zhang, Xian & McAlinden, Karl J., 2016. "The effect of trust on people's acceptance of CCS (carbon capture and storage) technologies: Evidence from a survey in the People's Republic of China," Energy, Elsevier, vol. 96(C), pages 69-79.
    30. Fuss, Sabine & Szolgayová, Jana, 2010. "Fuel price and technological uncertainty in a real options model for electricity planning," Applied Energy, Elsevier, vol. 87(9), pages 2938-2944, September.
    31. Pao, Hsiao-Tien & Fu, Hsin-Chia & Tseng, Cheng-Lung, 2012. "Forecasting of CO2 emissions, energy consumption and economic growth in China using an improved grey model," Energy, Elsevier, vol. 40(1), pages 400-409.
    32. ., 2018. "Globalization and the taxation of the rich," Chapters, in: The Ecology of Tax Systems, chapter 5, pages 65-80, Edward Elgar Publishing.
    33. repec:dau:papers:123456789/12983 is not listed on IDEAS
    34. ., 2018. "Reprise: the new global politics of research," Chapters, in: The New Global Politics of Science, chapter 8, pages 158-177, Edward Elgar Publishing.
    35. Abadie, Luis M. & Chamorro, José M., 2008. "European CO2 prices and carbon capture investments," Energy Economics, Elsevier, vol. 30(6), pages 2992-3015, November.
    36. Chen, Wenying & Xu, Ruina, 2010. "Clean coal technology development in China," Energy Policy, Elsevier, vol. 38(5), pages 2123-2130, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Xian & Wang, Xingwei & Chen, Jiajun & Xie, Xi & Wang, Ke & Wei, Yiming, 2014. "A novel modeling based real option approach for CCS investment evaluation under multiple uncertainties," Applied Energy, Elsevier, vol. 113(C), pages 1059-1067.
    2. Yang, Lin & Lv, Haodong & Wei, Ning & Li, Yiming & Zhang, Xian, 2023. "Dynamic optimization of carbon capture technology deployment targeting carbon neutrality, cost efficiency and water stress: Evidence from China's electric power sector," Energy Economics, Elsevier, vol. 125(C).
    3. Fan, Jing-Li & Xu, Mao & Yang, Lin & Zhang, Xian, 2019. "Benefit evaluation of investment in CCS retrofitting of coal-fired power plants and PV power plants in China based on real options," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    4. Fan, Jing-Li & Xu, Mao & Yang, Lin & Zhang, Xian & Li, Fengyu, 2019. "How can carbon capture utilization and storage be incentivized in China? A perspective based on the 45Q tax credit provisions," Energy Policy, Elsevier, vol. 132(C), pages 1229-1240.
    5. Rochedo, Pedro R.R. & Szklo, Alexandre, 2013. "Designing learning curves for carbon capture based on chemical absorption according to the minimum work of separation," Applied Energy, Elsevier, vol. 108(C), pages 383-391.
    6. Herui Cui & Tian Zhao & Ruirui Wu, 2018. "An Investment Feasibility Analysis of CCS Retrofit Based on a Two-Stage Compound Real Options Model," Energies, MDPI, vol. 11(7), pages 1-19, July.
    7. Mo, Jian-Lei & Schleich, Joachim & Zhu, Lei & Fan, Ying, 2015. "Delaying the introduction of emissions trading systems—Implications for power plant investment and operation from a multi-stage decision model," Energy Economics, Elsevier, vol. 52(PB), pages 255-264.
    8. Njomza Ibrahimi & Alemayehu Gebremedhin & Alketa Sahiti, 2019. "Achieving a Flexible and Sustainable Energy System: The Case of Kosovo," Energies, MDPI, vol. 12(24), pages 1-22, December.
    9. Lee, Suh-Young & Lee, Jae-Uk & Lee, In-Beum & Han, Jeehoon, 2017. "Design under uncertainty of carbon capture and storage infrastructure considering cost, environmental impact, and preference on risk," Applied Energy, Elsevier, vol. 189(C), pages 725-738.
    10. Zhang, M.M. & Wang, Qunwei & Zhou, Dequn & Ding, H., 2019. "Evaluating uncertain investment decisions in low-carbon transition toward renewable energy," Applied Energy, Elsevier, vol. 240(C), pages 1049-1060.
    11. Xiping Wang & Hongdou Zhang, 2018. "Valuation of CCS investment in China's coal‐fired power plants based on a compound real options model," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 8(5), pages 978-988, October.
    12. Yang, Lin & Xu, Mao & Fan, Jingli & Liang, Xi & Zhang, Xian & Lv, Haodong & Wang, Dong, 2021. "Financing coal-fired power plant to demonstrate CCS (carbon capture and storage) through an innovative policy incentive in China," Energy Policy, Elsevier, vol. 158(C).
    13. Thomas Aspinall & Adrian Gepp & Geoff Harris & Simone Kelly & Colette Southam & Bruce Vanstone, 2021. "Estimation of a term structure model of carbon prices through state space methods: The European Union emissions trading scheme," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 3797-3819, June.
    14. Xiping Wang & Hongdou Zhang, 2018. "Optimal design of carbon tax to stimulate CCS investment in China's coal‐fired power plants: A real options analysis," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 8(5), pages 863-875, October.
    15. Xiping Wang & Shaoyuan Qie, 2018. "Study on the investment timing of carbon capture and storage under different business modes," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 8(4), pages 639-649, August.
    16. Zhu, Lei & Fan, Ying, 2013. "Modelling the investment in carbon capture retrofits of pulverized coal-fired plants," Energy, Elsevier, vol. 57(C), pages 66-75.
    17. Wang, Xingwei & Cai, Yanpeng & Dai, Chao, 2014. "Evaluating China's biomass power production investment based on a policy benefit real options model," Energy, Elsevier, vol. 73(C), pages 751-761.
    18. Romano, Teresa & Fumagalli, Elena, 2018. "Greening the power generation sector: Understanding the role of uncertainty," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 272-286.
    19. Zhou, Wenji & Zhu, Bing & Chen, Dingjiang & Zhao, Fangxian & Fei, Weiyang, 2014. "How policy choice affects investment in low-carbon technology: The case of CO2 capture in indirect coal liquefaction in China," Energy, Elsevier, vol. 73(C), pages 670-679.
    20. Zhang, Shuwei & Bauer, Nico & Luderer, Gunnar & Kriegler, Elmar, 2014. "Role of technologies in energy-related CO2 mitigation in China within a climate-protection world: A scenarios analysis using REMIND," Applied Energy, Elsevier, vol. 115(C), pages 445-455.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:229:y:2018:i:c:p:326-334. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.