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Efficiency of Carbon storage with leakage: Physical and economical approaches

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  • Teng, Fei
  • Tondeur, Daniel

Abstract

In this paper, two methods are proposed to assess the efficiency of carbon capture and storage (CCS) involving back-leakage of CO2 from geological storage reservoirs to the atmosphere. The first method is a physical approach based on radiative forcing. It leads to a criterion that assesses whether a given technology of CCS is physically beneficial compared to a reference technology without CCS. The second method is an economic approach based on the classical framework of net present value (NPV). It leads to an economic feasibility condition that assesses whether a given CCS technology is economically beneficial compared to a reference technology. The two models are compared with respect to their parametric dependence. In particular, a maximum leakage rate may be defined, above which neither of the feasibility criteria is satisfied. The two approaches are also discussed with respect to the type of decision they may generate. Under general assumptions, the economic criterion is stricter than the physical criterion when the leakage coefficient is small, and the opposite is true when the leakage coefficient is large.

Suggested Citation

  • Teng, Fei & Tondeur, Daniel, 2007. "Efficiency of Carbon storage with leakage: Physical and economical approaches," Energy, Elsevier, vol. 32(4), pages 540-548.
    • Handle: RePEc:eee:energy:v:32:y:2007:i:4:p:540-548
    DOI: 10.1016/j.energy.2006.07.027
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    Cited by:

    1. van der Zwaan, B.C.C. & Gerlagh, Reyer, 2016. "Offshore CCS and ocean acidification : A global long-term probabilistic cost-benefit analysis of climate change mitigation," Other publications TiSEM 3b364af4-17f1-4a8b-8869-5, Tilburg University, School of Economics and Management.
    2. Bob van der Zwaan & Reyer Gerlagh, 2016. "Offshore CCS and ocean acidification: a global long-term probabilistic cost-benefit analysis of climate change mitigation," Climatic Change, Springer, vol. 137(1), pages 157-170, July.
    3. Manuel Wifling, 2020. "Financial precautions, carbon dioxide leakage, and the European Directive 2009/31/EC on carbon capture and storage (CCS)," Climatic Change, Springer, vol. 163(2), pages 787-806, November.
    4. Zaroni, Hebert & Maciel, Letícia B. & Carvalho, Diego B. & Pamplona, Edson de O., 2019. "Monte Carlo Simulation approach for economic risk analysis of an emergency energy generation system," Energy, Elsevier, vol. 172(C), pages 498-508.
    5. Jung, Jung-Yeul & Huh, Cheol & Kang, Seong-Gil & Seo, Youngkyun & Chang, Daejun, 2013. "CO2 transport strategy and its cost estimation for the offshore CCS in Korea," Applied Energy, Elsevier, vol. 111(C), pages 1054-1060.
    6. Abadie, Luis M. & Chamorro, José M., 2008. "European CO2 prices and carbon capture investments," Energy Economics, Elsevier, vol. 30(6), pages 2992-3015, November.
    7. Hang Deng & Jeffrey M. Bielicki & Michael Oppenheimer & Jeffrey P. Fitts & Catherine A. Peters, 2017. "Leakage risks of geologic CO2 storage and the impacts on the global energy system and climate change mitigation," Climatic Change, Springer, vol. 144(2), pages 151-163, September.

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