Study on CCS Investment Decision-Making Based on Compound Real Options for Coal-Fired Power Plant

doi:10.11930/j.issn.1004-9649.2016.07.179.06

Abstract

Abstract: Carbon capture and storage(CCS) technology, as an ideal selection for the international community to address climate challenges, has the characteristics of multi-period and uncertainty. With consideration of the phased characteristics of CCS investment decision-making, a two-stage compound real options model is established for CCS investment of coal-fired power plant. Based on the option selection interaction in the phase of demonstration stage and commercial operation stage, and the uncertain factors of carbon prices, fossil fuel prices and investment cost, a two-stage compound real options model is established to evaluate the uncertainty problems in investment decision-making. Finally, a case study is conducted to illustrate the applicability of the proposed model to CCS investment decision-making, and the threshold of carbon trading price under different policy subsidies is obtained, which provides a theoretical basis for CCS investment decision-making for coal-fired power plants.

Key words: compound real option, coal-fired power plant, CCS, investment decision

CLC Number:

TM715

WANG Xiping, DU Lei, ZHAO Shujun, LI Zhenwei. Study on CCS Investment Decision-Making Based on Compound Real Options for Coal-Fired Power Plant[J]. Electric Power, 2016, 49(7): 179-184.

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URL: https://www.electricpower.com.cn/EN/10.11930/j.issn.1004-9649.2016.07.179.06

https://www.electricpower.com.cn/EN/Y2016/V49/I7/179

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