Should a Coal-Fired Power Plant be Replaced or Retrofitted?

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• 作者：Dalia Patiñ ; o-Echeverri ; Benoit Morel ; Jay Apt ; Chao Chen
• 刊名：Environmental Science & Technology
• 出版年：2007
• 出版时间：December 1, 2007
• 年：2007
• 卷：41
• 期：23
• 页码：7980 - 7986
• 全文大小：1137K
• 年卷期：v.41,no.23(December 1, 2007)
• ISSN：1520-5851

文摘

In a cap-and-trade system, a power plant operator can choose to operate while paying for the necessary emissions allowances, retrofit emissions controls to the plant, or replace the unit with a new plant. Allowance prices are uncertain, as are the timing and stringency of requirements for control of mercury and carbon emissions. We model the evolution of allowance prices for SO₂, NO_x, Hg, and CO₂ using geometric Brownian motion with drift, volatility, and jumps, and use an options-based analysis to find the value of the alternatives. In the absence of a carbon price, only if the owners have a planning horizon longer than 30 years would they replace a conventional coal-fired plant with a high-performance unit such as a supercritical plant; otherwise, they would install SO₂ and NO_x controls on the existing unit. An expectation that the CO₂ price will reach $50/t in 2020 makes the installation of an IGCC with carbon capture and sequestration attractive today, even for planning horizons as short as 20 years. A carbon price below $40/t is unlikely to produce investments in carbon capture for electric power.