Systems analysis of the technoeconomic investment required for coal generation with carbon capture and storage

Pearce, O.C. (2011). Systems analysis of the technoeconomic investment required for coal generation with carbon capture and storage. (Unpublished Doctoral thesis, City University London)

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Abstract

The thesis begins by presenting the wider case for deployment of CCS at the global level and the UK level. It is shown that from a policy perspective, the deployment of coal with CCS is necessary to ensure emissions targets can be met, as apart from nuclear, it is the only technology that will allow existing fossil fuel reserves to be used- something that will certainly happen. However, questions remain over the technical feasibility and the commercial case for the adoption of CCS technology. Therefore, the remainder of the thesis presents a detailed technology assessment and financial analysis to derive the market case for deploying coal with CCS. The technology assessment extends previous work in this area by comparing sub system performance across all capture technologies in detail. The combination of current and future technical developments for CCS along with the use of technology and system readiness levels is a novel approach to technology assessment and extends previous work in the area by presenting a systems framework under which CCS technology can be evaluated. The conclusion of the technology assessment is that pulverised-coal plant with post combustion capture is the closest CCS technology to deployment. The second part of this thesis concerns the investment case for CCS. The analysis involves a derivation of costs for carbon capture technologies. The financial characteristics of CCS are identified using sensitivity analysis to compare to both the original plant and incumbent choice for new generation (gas fired CCGT), and implications for policy and investors are drawn out. Investment in a CCS plant is then valued as a perpetual American call option, while the expected time to investment is evaluated using mean time to absorption calculus. This approach of combining the American call option with the mean time to absorption method is a novel way to assess the expected timeframe over which investment in CCS could take place and extends previous work in this area. Recently, real options analysis has been used in engineering systems analysis. Although not as advanced as in business and economic investigations, real options analysis has begun to be used to recognise the value of flexibility in system design. The intellectual and practical contribution of this thesis to the field of engineering systems lies in the derivation of a framework for the consistent analysis of current and future power generation technologies, coupled with real options analysis of an American call option with the mean time to absorption to evaluate the investment case for coal CCS. The relevance of adopting a systems approach for real world application of this research has been proved by the project commissioned during the course of this research for ATCO Power (Canada) Ltd concerning evaluation of the most promising options for carbon capture and storage and technology and investment case for future business strategy, which included material from Chapters 4 and 5 of the thesis.

Item Type: Thesis (Doctoral)
Subjects: T Technology > TA Engineering (General). Civil engineering (General)
Divisions: School of Engineering & Mathematical Sciences
URI: http://openaccess.city.ac.uk/id/eprint/8732

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