CO2 Pipeline Transport and Storage Network Cost Modelling and Multi-period Multi-scenario Stochastic Optimisation

12 Pages Posted: 9 Apr 2021

See all articles by Zhenggang Nie

Zhenggang Nie

Imperial College London

Anna Korre

Imperial College London

Sevket Durucan

Imperial College London - Department of Earth Science and Engineering; Imperial College London

Denis Fraga

Imperial College London - Department of Earth Science and Engineering

Filip Neele

TNO Netherlands Organisation for Applied Scientific Research

Tom Mikunda

TNO, NL

Date Written: April 7, 2021

Abstract

Carbon capture and storage stakeholders focusing on transport and storage aspects need to consider a wide range of risks and uncertainties when making investment decisions, including market, regulatory, geological and technical risks and uncertainties. This paper presents a stochastic optimisation based real options valuation framework that can be implemented to model CO2 pipeline transport and storage network costs in which uncertainties and engineering flexibilities are appraised, optimised and factored into the investment decisions, so that investors or regulators can confidently and quantitatively evaluate incentives that can support CCS deployment at large scale. The paper describes the models developed for this purpose and demonstrates the application of the modelling framework for a realistically designed CO2 storage cluster around Rotterdam in the Netherlands. It shown that the CCS network evolution is mainly driven by geological and regional geography constrains, CO2 supply rates, and the engineering designs relying on these. It has also been shown that individual storage sites have significantly different cash flows, dictated by their physical characteristics and the injection concept chosen. The storage capacity uncertainty and CO2 supply uncertainty (or CO2 mitigation target uncertainty) have been identified as the main uncertainties affecting a CCS network cluster.

Keywords: Carbon capture and storage network, multi-period, multi-scenario, stochastic optimisation

Suggested Citation

Nie, Zhenggang and Korre, Anna and Durucan, Sevket and Fraga, Denis and Neele, Filip and Mikunda, Tom, CO2 Pipeline Transport and Storage Network Cost Modelling and Multi-period Multi-scenario Stochastic Optimisation (April 7, 2021). Proceedings of the 15th Greenhouse Gas Control Technologies Conference 15-18 March 2021, Available at SSRN: https://ssrn.com/abstract=3821765 or http://dx.doi.org/10.2139/ssrn.3821765

Zhenggang Nie

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Anna Korre (Contact Author)

Imperial College London ( email )

Sevket Durucan

Imperial College London - Department of Earth Science and Engineering ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Denis Fraga

Imperial College London - Department of Earth Science and Engineering ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Filip Neele

TNO Netherlands Organisation for Applied Scientific Research

Hoofddorp
Netherlands

Tom Mikunda

TNO, NL ( email )

Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
16
Abstract Views
74
PlumX Metrics