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Assessment of Clean-Coal Strategies: The Questionable Merits of Carbon Capture-Readiness

  • Rohlfs, Wilko


    (Institute of Heat and Mass Transfer)

  • Madlener, Reinhard


    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

In this paper we investigate the value of capture-readiness by modeling the cost effectiveness of various alternative technological options and focusing on different cleancoal technology pathways. The modeling framework developed is based on stochastic net present value calculations. It allows for consideration of path-dependent and technologyspecific risk combinations inherent in the input and output commodities that are relevant for operating the plant. We find that capture-readiness competes with alternative options of power plant replacements and that capture-readiness is not necessarily preferable from an economic perspective.

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Paper provided by E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN) in its series FCN Working Papers with number 18/2012.

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Length: 37 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:ris:fcnwpa:2012_018
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  1. Rohlfs, Wilko & Madlener, Reinhard, 2010. "Cost Effectiveness of Carbon Capture-Ready Coal Power Plants with Delayed Retrofit," FCN Working Papers 8/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Dec 2010.
  2. Gerbelová, Hana & Versteeg, Peter & Ioakimidis, Christos S. & Ferrão, Paulo, 2013. "The effect of retrofitting Portuguese fossil fuel power plants with CCS," Applied Energy, Elsevier, vol. 101(C), pages 280-287.
  3. Harkin, Trent & Hoadley, Andrew & Hooper, Barry, 2012. "Using multi-objective optimisation in the design of CO2 capture systems for retrofit to coal power stations," Energy, Elsevier, vol. 41(1), pages 228-235.
  4. Nicholson, Martin & Biegler, Tom & Brook, Barry W., 2011. "How carbon pricing changes the relative competitiveness of low-carbon baseload generating technologies," Energy, Elsevier, vol. 36(1), pages 305-313.
  5. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, 09.
  6. 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.
  7. Davison, John, 2007. "Performance and costs of power plants with capture and storage of CO2," Energy, Elsevier, vol. 32(7), pages 1163-1176.
  8. Lund, Henrik & Mathiesen, Brian Vad, 2012. "The role of Carbon Capture and Storage in a future sustainable energy system," Energy, Elsevier, vol. 44(1), pages 469-476.
  9. Mondal, Monoj Kumar & Balsora, Hemant Kumar & Varshney, Prachi, 2012. "Progress and trends in CO2 capture/separation technologies: A review," Energy, Elsevier, vol. 46(1), pages 431-441.
  10. Rohlfs, Wilko & Madlener, Reinhard, 2011. "Multi-Commodity Real Options Analysis of Power Plant Investments: Discounting Endogenous Risk Structures," FCN Working Papers 22/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  11. Olajire, Abass A., 2010. "CO2 capture and separation technologies for end-of-pipe applications – A review," Energy, Elsevier, vol. 35(6), pages 2610-2628.
  12. Cormos, Calin-Cristian, 2012. "Integrated assessment of IGCC power generation technology with carbon capture and storage (CCS)," Energy, Elsevier, vol. 42(1), pages 434-445.
  13. Skorek-Osikowska, Anna & Janusz-Szymańska, Katarzyna & Kotowicz, Janusz, 2012. "Modeling and analysis of selected carbon dioxide capture methods in IGCC systems," Energy, Elsevier, vol. 45(1), pages 92-100.
  14. Rubin, Edward S. & Chen, Chao & Rao, Anand B., 2007. "Cost and performance of fossil fuel power plants with CO2 capture and storage," Energy Policy, Elsevier, vol. 35(9), pages 4444-4454, September.
  15. Rohlfs, Wilko & Madlener, Reinhard, 2010. "Valuation of CCS-Ready Coal-Fired Power Plants: A Multi-Dimensional Real Options Approach," FCN Working Papers 7/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
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