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Monte-Carlo simulation of investment integrity and value for power-plants with carbon-capture

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  • Di Lorenzo, Giuseppina
  • Pilidis, Pericles
  • Witton, John
  • Probert, Douglas

Abstract

Reducing CO2-emissions from electricity-generating power-plants is a high priority. Several advanced low-carbon power-plants have gained wide acceptance. Uncertainties concerning future costs and performances of new pertinent technologies and unit fuel-prices as well as the types and the comprehensiveness of CO2-emissions regulations exacerbate the difficulty of selecting promising candidates to be considered for future investments. A computer-based Monte-Carlo simulation technique has been devised to help choose the best technology for financial investments: it allows for the stated uncertainties and assesses the trade-offs between expected returns and the key risks imposed on decision makers. The economic-modelling methodology is described. The computer-based model assesses the investment in a new low-carbon integrated reforming combined-cycle (IRCC) power-plant. The worthwhileness of this financial investment is evaluated in terms of net present-value (NPV), internal rate-of-return (IRR) and pay-back period (PBP).

Suggested Citation

  • Di Lorenzo, Giuseppina & Pilidis, Pericles & Witton, John & Probert, Douglas, 2012. "Monte-Carlo simulation of investment integrity and value for power-plants with carbon-capture," Applied Energy, Elsevier, vol. 98(C), pages 467-478.
    • Handle: RePEc:eee:appene:v:98:y:2012:i:c:p:467-478
    DOI: 10.1016/j.apenergy.2012.04.010
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