Exploring for real options during CCS networks conceptual design to mitigate effects of path-dependency and lock-in

Carbon capture and storage (CCS) networks are expected to grow from small demonstration projects with few emitters to large-scale networks of dedicated carbon dioxide (CO2) pipelines over the next few decades. Conventional design practices focus on implementing incremental expansions based on deterministic requirements resulting in rigid networks. The design approaches do not proactively recognize future uncertainties in design requirements and operating environments. In this study, we present a design method based on real options, graph theory and Monte Carlo techniques that reckons future uncertainties. The proposed method assesses initial design architectures and provides insights into potential real options and sets of strategies for implementing future expansions. We apply the method to a hypothetical CCS network design. The results reveal that this method helps to appraise the flexibility created by redundant pipe capacity and length in an uncertain future. It also shows that embedding real options in expanding CCS networks could result in more emission reduction by encouraging other emitters to participate.