In this paper, we develop a multi-factor real options model for a two-stage investment problem where a coal-fired power plant is later retrofitted with carbon capture and storage (CCS). A capture-ready power plant with lower retrofit costs is compared with a conventional one and higher CCS...

In this paper we investigate the cost effectiveness of coal-fired CCS plants. Two different model approaches are used. First, we consider marginal costs to determine the impact of fuel and CO2 certificate prices on electricity generation cost. Second, we apply a net present value evaluation to...

In this paper we investigate the value of capture-readiness by modeling the cost effectiveness of various alternative technological options and focusing on different cleancoal technology pathways. The modeling framework developed is based on stochastic net present value calculations. It allows...

In this paper we identify optimal strategies for the investment in power generation assets. The investments are characterized by multiple available technologies whose economic value is driven by a technology-specific combination of several underlying assets, such as the price of fuel,...

In this paper we investigate the value of capture-readiness by modeling the cost effectiveness of various alternative technological options and focusing on different clean-coal technology pathways. The modeling framework developed is based on stochastic net present value calculations. It allows...

The economic evaluation of ultra-long-lived investment projects is not only challenging due to the choice of the planning horizon but also due to the discounting of future uncertain cash flows. Thus, for real world investment decisions a better understanding of the project’s risks and their...

The value of power generation technologies can be derived from the investment cost, the plant’s expected lifetime, and the discounted cash-flows, the latter of which typically are a combination of several underlyings, such as the price of fuel, electricity, and CO2. To determine this value,...