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Economic Evaluation of Flexibility in the Design of IGCC Plants with Integrated Membrane Reactor Modules

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  • Juzheng Zhang
  • Michel‐Alexandre Cardin
  • Nikolaos Kazantzis
  • Simon K. K. Ng
  • Y. H. Ma

Abstract

Integrated Gasification Combined Cycle with embedded membrane reactor modules (IGCC‐MR) represents a new technology option for the coproduction of electricity and pure hydrogen endowed with enhanced environmental performance capacity. It is viewed as an alternative to conventional coal‐ and gas‐fired power generation technologies. An IGCC‐MR power plant needs to be techno‐economically evaluated in the presence of irreducible regulatory and fuel market uncertainties for the potential deployment of an initial fleet of demonstration plants at the commercial scale. This paper applies a systematic methodological framework to assess the economic value of flexible alternatives in the design and operation of an IGCC‐MR plant under the aforementioned sources of uncertainty. The main objective is to demonstrate the potential value enhancements associated with the long‐term economic performance of flexible IGCC‐MR project investments, by managing the uncertainty associated with future environmental regulations and fuel costs. The paper provides an overview of promising design flexibility concepts for IGCC‐MR power plants and focuses on operational and constructional systems flexibility. Operational flexibility is realized through temporary plant shutdown with considerations of regulatory and market uncertainties. Constructional flexibility is realized by considering the installation of a Carbon Capture and Storage (CCS) unit at three strategic periods: (1) installation at the initial construction phase, (2) retrofitting at a later stage, and (3) retrofitting at a later stage with preinvestment. Monte Carlo simulations and financial analysis demonstrate that, in the presence of irreducible uncertainty, the most economically advantageous flexibility option is to install CCS in the initial IGCC‐MR construction phase.

Suggested Citation

  • Juzheng Zhang & Michel‐Alexandre Cardin & Nikolaos Kazantzis & Simon K. K. Ng & Y. H. Ma, 2015. "Economic Evaluation of Flexibility in the Design of IGCC Plants with Integrated Membrane Reactor Modules," Systems Engineering, John Wiley & Sons, vol. 18(2), pages 208-227, March.
    • Handle: RePEc:wly:syseng:v:18:y:2015:i:2:p:208-227
    DOI: 10.1002/sys.21300
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    References listed on IDEAS

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    1. Frey, H.Christopher & Rubin, Edward S. & Diwekar, Urmila M., 1994. "Modeling uncertainties in advanced technologies: Application to a coal gasification system with hot-gas cleanup," Energy, Elsevier, vol. 19(4), pages 449-463.
    2. Matthew R. Silver & Olivier L. de Weck, 2007. "Time‐expanded decision networks: A framework for designing evolvable complex systems," Systems Engineering, John Wiley & Sons, vol. 10(2), pages 167-188, June.
    3. Chen, Chao & Rubin, Edward S., 2009. "CO2 control technology effects on IGCC plant performance and cost," Energy Policy, Elsevier, vol. 37(3), pages 915-924, March.
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    1. Bigestans, Davis & Cardin, Michel-Alexandre & Kazantzis, Nikolaos, 2023. "Economic performance evaluation of flexible centralised and decentralised blue hydrogen production systems design under uncertainty," Applied Energy, Elsevier, vol. 352(C).

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