IDEAS home Printed from https://ideas.repec.org/a/hin/jnlmpe/8180674.html
   My bibliography  Save this article

Evaluating CCS Investment of China by a Novel Real Option-Based Model

Author

Listed:
  • Hongrui Chu
  • Lun Ran
  • Ran Zhang

Abstract

Carbon capture and storage (CCS) technology is an effective method to mitigate CO 2 emission pressure; however it is hard to be evaluated due to uncertainties. This paper establishes a real options analysis (ROA) model to evaluate CCS investment from the perspective of the existing thermal power plant by considering the fluctuations of electricity price, carbon price, and thermal coal price. The model is solved by the proposed robust Least Squares Monte Carlo method and China is taken as a case study to assess power plant’s CCS investment revenue. In the case study, robust ROA and ROA are compared under some CCS incentive factors. The results indicate that the proposed robust ROA is more realistic and suitable for CCS evaluation than common ROA to some extent. Finally, a policy schema to promote CCS investment is derived.

Suggested Citation

  • Hongrui Chu & Lun Ran & Ran Zhang, 2016. "Evaluating CCS Investment of China by a Novel Real Option-Based Model," Mathematical Problems in Engineering, Hindawi, vol. 2016, pages 1-15, December.
    • Handle: RePEc:hin:jnlmpe:8180674
    DOI: 10.1155/2016/8180674
    as

    Download full text from publisher

    File URL: http://downloads.hindawi.com/journals/MPE/2016/8180674.pdf
    Download Restriction: no
    File URL: http://downloads.hindawi.com/journals/MPE/2016/8180674.xml
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2016/8180674?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    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:hin:jnlmpe:8180674. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Mohamed Abdelhakeem (email available below). General contact details of provider: https://www.hindawi.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.