IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v19y2022i11p6490-d824892.html
   My bibliography  Save this article

Economic Feasibility Study of a Carbon Capture and Storage (CCS) Integration Project in an Oil-Driven Economy: The Case of the State of Kuwait

Author

Listed:
  • Adel Naseeb

    (Techno-Economics Department, Science and Technology Sector, Kuwait Institute for Scientific Research (KISR), P.O. Box 24885, Safat 13109, Kuwait)

  • Ashraf Ramadan

    (Environment and Life Sciences Research Centre, Kuwait Institute for Scientific Research (KISR), P.O. Box 24885, Safat 13109, Kuwait)

  • Sultan Majed Al-Salem

    (Environment and Life Sciences Research Centre, Kuwait Institute for Scientific Research (KISR), P.O. Box 24885, Safat 13109, Kuwait)

Abstract

The rapid growth and urbanization rate, coupled with hot climate and scarce rainfall, makes it essential for a country like Kuwait to have several power and desalination plants with high-generating capacity. These plants are entirely reliant on burning fossil fuels as a source of thermal energy. These plants are also universally accepted to be the largest CO 2 emitters; hence, they present a potential for carbon capture and storage (CCS). Having established the suitability of the existing conditions for post-combustion CCS, a techno-economic-based feasibility study, which took into consideration local power generation technologies and economic conditions, was performed. Relying on fifteen case study models and utilizing the concept of levelized cost of electricity (LCOE), the statistical average method (SAM) was used to assess CCS based on realistic and reliable economic indicators. Zour power station, offering the highest potential CO 2 stream, was selected as a good candidate for the analysis at hand. Heavy fuel oil (HFO) was assumed to be the only fuel type used at this station with affixed price of USD 20/barrel. The analysis shows that the internal rate of return (IRR) was about 7%, which could be attributed to fuel prices in Kuwait and governmental support, i.e., waived construction tax and subsidized workforce salaries. Furthermore, the net present value (NPV) was also estimated as USD 47,928 million with a 13-year payback period (PBP). Moreover, 1–3% reductions in the annual operational cost were reflected in increasing the IRR and the NPV to 9–11% and USD 104,085–193,945 million, respectively, and decreasing the PBP to 12–11 years. On the contrary, increasing the annual operational cost by 1% made the project economically unfeasible, while an increase of 3% resulted in negative IRR (−1%), NVP (−USD 185,458 million) and increased PBP to 30 years. Similarly, increasing the HFO barrel price by USD 5 resulted in negative IRR (−10%) and NVP (−USD 590,409); hence, a CCS project was deemed economically unfeasible. While the study considered the conditions in Kuwait, it is expected that similar results could be obtained for other countries with an oil-driven economy. Considering that around 62% of the fossil fuel blend in Kuwait is consumed by electricity and water generation, it is inevitable to consider the possibility and practicality of having a carbon network with neighboring countries where other oil-driven economies, such as Kingdom of Saudi Arabia and Iraq, can utilize a CCS-based mega infrastructure in Kuwait. The choice of Kuwait is also logical due to being a mid-point between both countries and can initiate a trading scheme in oil derivatives with both countries.

Suggested Citation

  • Adel Naseeb & Ashraf Ramadan & Sultan Majed Al-Salem, 2022. "Economic Feasibility Study of a Carbon Capture and Storage (CCS) Integration Project in an Oil-Driven Economy: The Case of the State of Kuwait," IJERPH, MDPI, vol. 19(11), pages 1-19, May.
  • Handle: RePEc:gam:jijerp:v:19:y:2022:i:11:p:6490-:d:824892
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/19/11/6490/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1660-4601/19/11/6490/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Koelbl, Barbara S. & van den Broek, Machteld A. & Wilting, Harry C. & Sanders, Mark W.J.L. & Bulavskaya, Tatyana & Wood, Richard & Faaij, André P.C. & van Vuuren, Detlef P., 2016. "Socio-economic impacts of low-carbon power generation portfolios: Strategies with and without CCS for the Netherlands," Applied Energy, Elsevier, vol. 183(C), pages 257-277.
    2. Hondo, Hiroki, 2005. "Life cycle GHG emission analysis of power generation systems: Japanese case," Energy, Elsevier, vol. 30(11), pages 2042-2056.
    3. Gao, Mingyun & Yang, Honglin & Xiao, Qinzi & Goh, Mark, 2022. "A novel method for carbon emission forecasting based on Gompertz's law and fractional grey model: Evidence from American industrial sector," Renewable Energy, Elsevier, vol. 181(C), pages 803-819.
    4. Alotaibi, Sorour, 2011. "Energy consumption in Kuwait: Prospects and future approaches," Energy Policy, Elsevier, vol. 39(2), pages 637-643, February.
    5. Al-Salem, S.M., 2015. "Carbon dioxide (CO2) emission sources in Kuwait from the downstream industry: Critical analysis with a current and futuristic view," Energy, Elsevier, vol. 81(C), pages 575-587.
    6. Duan, Hong-Bo & Fan, Ying & Zhu, Lei, 2013. "What’s the most cost-effective policy of CO2 targeted reduction: An application of aggregated economic technological model with CCS?," Applied Energy, Elsevier, vol. 112(C), pages 866-875.
    7. Corinne Le Quéré & Robert B. Jackson & Matthew W. Jones & Adam J. P. Smith & Sam Abernethy & Robbie M. Andrew & Anthony J. De-Gol & David R. Willis & Yuli Shan & Josep G. Canadell & Pierre Friedlingst, 2020. "Temporary reduction in daily global CO2 emissions during the COVID-19 forced confinement," Nature Climate Change, Nature, vol. 10(7), pages 647-653, July.
    8. Al-Mutairi, Asma'a & Smallbone, Andrew & Al-Salem, S.M. & Roskilly, Anthony Paul, 2017. "The first carbon atlas of the state of Kuwait," Energy, Elsevier, vol. 133(C), pages 317-326.
    9. Johansson, Daniella & Franck, Per-Åke & Pettersson, Karin & Berntsson, Thore, 2013. "Comparative study of Fischer–Tropsch production and post-combustion CO2 capture at an oil refinery: Economic evaluation and GHG (greenhouse gas emissions) balances," Energy, Elsevier, vol. 59(C), pages 387-401.
    10. Darwish, Mohamed A. & Abdulrahim, Hassan K. & Amer, Anwar B., 2008. "On better utilization of gas turbines in Kuwait," Energy, Elsevier, vol. 33(4), pages 571-588.
    11. Paltsev, Sergey & Morris, Jennifer & Kheshgi, Haroon & Herzog, Howard, 2021. "Hard-to-Abate Sectors: The role of industrial carbon capture and storage (CCS) in emission mitigation," Applied Energy, Elsevier, vol. 300(C).
    12. Ishida, M. & Zheng, D. & Akehata, T., 1987. "Evaluation of a chemical-looping-combustion power-generation system by graphic exergy analysis," Energy, Elsevier, vol. 12(2), pages 147-154.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. AlKheder, Sharaf & Almusalam, Ali, 2022. "Forecasting of carbon dioxide emissions from power plants in Kuwait using United States Environmental Protection Agency, Intergovernmental panel on climate change, and machine learning methods," Renewable Energy, Elsevier, vol. 191(C), pages 819-827.
    2. Gelan, Ayele U., 2018. "Kuwait's energy subsidy reduction: Examining economic and CO2 emission effects with or without compensation," Energy Economics, Elsevier, vol. 71(C), pages 186-200.
    3. de Chalendar, Jacques A. & Benson, Sally M., 2021. "A physics-informed data reconciliation framework for real-time electricity and emissions tracking," Applied Energy, Elsevier, vol. 304(C).
    4. Charfeddine, Lanouar & Umlai, Mohamed, 2023. "ICT sector, digitization and environmental sustainability: A systematic review of the literature from 2000 to 2022," Renewable and Sustainable Energy Reviews, Elsevier, vol. 184(C).
    5. Fangyi Li & Zhaoyang Ye & Xilin Xiao & Dawei Ma, 2019. "Environmental Benefits of Stock Evolution of Coal-Fired Power Generators in China," Sustainability, MDPI, vol. 11(19), pages 1-17, October.
    6. Jānis Krūmiņš & Māris Kļaviņš, 2023. "Investigating the Potential of Nuclear Energy in Achieving a Carbon-Free Energy Future," Energies, MDPI, vol. 16(9), pages 1-31, April.
    7. Hongbo Duan & Gupeng Zhang & Shouyang Wang & Ying Fan, 2018. "Balancing China’s climate damage risk against emission control costs," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(3), pages 387-403, March.
    8. Odeh, Naser A. & Cockerill, Timothy T., 2008. "Life cycle GHG assessment of fossil fuel power plants with carbon capture and storage," Energy Policy, Elsevier, vol. 36(1), pages 367-380, January.
    9. Shuhao Chang & Qiancheng Wang & Haihua Hu & Zijian Ding & Hansen Guo, 2018. "An NNwC MPPT-Based Energy Supply Solution for Sensor Nodes in Buildings and Its Feasibility Study," Energies, MDPI, vol. 12(1), pages 1-20, December.
    10. Joshua M. Pearce, 2012. "Limitations of Nuclear Power as a Sustainable Energy Source," Sustainability, MDPI, vol. 4(6), pages 1-15, June.
    11. L. Hay & A. H. B. Duffy & R. I. Whitfield, 2017. "The S‐Cycle Performance Matrix: Supporting Comprehensive Sustainability Performance Evaluation of Technical Systems," Systems Engineering, John Wiley & Sons, vol. 20(1), pages 45-70, January.
    12. Cha, Kyounghoon & Lim, Songtak & Hur, Tak, 2008. "Eco-efficiency approach for global warming in the context of Kyoto Mechanism," Ecological Economics, Elsevier, vol. 67(2), pages 274-280, September.
    13. Chiu-Ming Hsiao, 2022. "Economic Growth, CO 2 Emissions Quota and Optimal Allocation under Uncertainty," Sustainability, MDPI, vol. 14(14), pages 1-26, July.
    14. Wen-Ze Wu & Chong Liu & Wanli Xie & Mark Goh & Tao Zhang, 2023. "Predictive analysis of the industrial water-waste-energy system using an optimised grey approach: A case study in China," Energy & Environment, , vol. 34(5), pages 1639-1656, August.
    15. Pavelka, Michal & Klika, Václav & Vágner, Petr & Maršík, František, 2015. "Generalization of exergy analysis," Applied Energy, Elsevier, vol. 137(C), pages 158-172.
    16. Wu, X.D. & Guo, J.L. & Chen, G.Q., 2018. "The striking amount of carbon emissions by the construction stage of coal-fired power generation system in China," Energy Policy, Elsevier, vol. 117(C), pages 358-369.
    17. Yu, Shiwei & Wei, Yi-Ming & Guo, Haixiang & Ding, Liping, 2014. "Carbon emission coefficient measurement of the coal-to-power energy chain in China," Applied Energy, Elsevier, vol. 114(C), pages 290-300.
    18. Varun & Prakash, Ravi & Bhat, I.K., 2010. "A figure of merit for evaluating sustainability of renewable energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(6), pages 1640-1643, August.
    19. Li, Jinying & Li, Sisi & Wu, Fan, 2020. "Research on carbon emission reduction benefit of wind power project based on life cycle assessment theory," Renewable Energy, Elsevier, vol. 155(C), pages 456-468.
    20. Björn Mestdagh & Olivier Sempiga & Luc Van Liedekerke, 2023. "The Impact of External Shocks on the Sustainable Development Goals (SDGs): Linking the COVID-19 Pandemic to SDG Implementation at the Local Government Level," Sustainability, MDPI, vol. 15(7), pages 1-18, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:19:y:2022:i:11:p:6490-:d:824892. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.