Assessment of clean-coal strategies: The questionable merits of carbon capture-readiness

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 for consideration of path-dependent and technology-specific risk combinations inherent in the input and output commodities that are relevant for operating the plant. We find that capture-readiness competes with alternative options of power plant replacements and that capture-readiness is not necessarily preferable from an economic perspective.

► An NPV model with technology- and path-dependent risk-adjusted discount rates is developed.
► The relative value of CCS retrofits compared to new power plants is examined.
► The projects, risk structure is important to consider while discounting cash flows.
► CCS retrofits are found to be less attractive compared to new-build power plants.
► The merit of capture-readiness is questionable due to competing other technologies.