Table of Contents Author Guidelines Submit a Manuscript
Mathematical Problems in Engineering
Volume 2016, Article ID 8180674, 15 pages
http://dx.doi.org/10.1155/2016/8180674
Research Article

Evaluating CCS Investment of China by a Novel Real Option-Based Model

School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China

Received 22 September 2016; Revised 4 November 2016; Accepted 9 November 2016

Academic Editor: Leonid Shaikhet

Copyright © 2016 Hongrui Chu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Linked References

  1. IPCC, Climate Change 2014: Mitigation of Climate Change, Cambridge University Press, Cambridge, UK, 2014.
  2. K. Wang, X. Zhang, Y.-M. Wei, and S. Yu, “Regional allocation of CO2 emissions allowance over provinces in China by 2020,” Energy Policy, vol. 54, pp. 214–229, 2013. View at Publisher · View at Google Scholar · View at Scopus
  3. National Bureau of Statistics of China, China Energy Statistical Yearbook, China Statistics Press, Beijing, China, 2013.
  4. J. Gibbins and H. Chalmers, “Carbon capture and storage,” Energy Policy, vol. 36, no. 12, pp. 4317–4322, 2008. View at Publisher · View at Google Scholar · View at Scopus
  5. D. Charles, “Stimulus gives DOE billions for carbon-capture projects,” Science, vol. 323, no. 5918, p. 1158, 2009. View at Publisher · View at Google Scholar · View at Scopus
  6. IPCC, IPCC Special Report on Carbon Dioxide Capture and Storage, Cambridge University Press, Cambridge, UK, 2005.
  7. R. C. Sekar, J. E. Parsons, H. J. Herzog, and H. D. Jacoby, “Future carbon regulations and current investments in alternative coal-fired power plant technologies,” Energy Policy, vol. 35, no. 2, pp. 1064–1074, 2007. View at Publisher · View at Google Scholar · View at Scopus
  8. M. C. Bohm, H. J. Herzog, J. E. Parsons, and R. C. Sekar, “Capture-ready coal plants—options, technologies and economics,” International Journal of Greenhouse Gas Control, vol. 1, no. 1, pp. 113–120, 2007. View at Publisher · View at Google Scholar · View at Scopus
  9. W. Zhou, B. Zhu, S. Fuss, J. Szolgayová, M. Obersteiner, and W. Fei, “Uncertainty modeling of CCS investment strategy in China's power sector,” Applied Energy, vol. 87, no. 7, pp. 2392–2400, 2010. View at Publisher · View at Google Scholar · View at Scopus
  10. V. Kaminski, “The challenge of pricing and risk managing electricity derivatives,” in The U.S. Power Market, vol. 10, chapter 10, Risk Publications, London, UK, 1997. View at Google Scholar
  11. M. Hsu, “Spark spread options are hot!,” The Electricity Journal, vol. 11, no. 2, pp. 28–39, 1998. View at Publisher · View at Google Scholar
  12. C.-L. Tseng and G. Barz, “Short-term generation asset valuation: a real options approach,” Operations Research, vol. 50, no. 2, pp. 297–310, 2002. View at Publisher · View at Google Scholar · View at Scopus
  13. T. Park, C. Kim, and H. Kim, “A real option-based model to valuate CDM projects under uncertain energy policies for emission trading,” Applied Energy, vol. 131, pp. 288–296, 2014. View at Publisher · View at Google Scholar · View at Scopus
  14. L. M. Abadie and J. M. Chamorro, “European CO2 prices and carbon capture investments,” Energy Economics, vol. 30, no. 6, pp. 2992–3015, 2008. View at Publisher · View at Google Scholar · View at Scopus
  15. S. Fuss, J. Szolgayová, M. Obersteiner, and M. Gusti, “Investment under market and climate policy uncertainty,” Applied Energy, vol. 85, no. 8, pp. 708–721, 2008. View at Publisher · View at Google Scholar · View at Scopus
  16. X. Zhang, X. Wang, J. Chen, X. Xie, K. Wang, and Y. Wei, “A novel modeling based real option approach for CCS investment evaluation under multiple uncertainties,” Applied Energy, vol. 113, pp. 1059–1067, 2014. View at Publisher · View at Google Scholar · View at Scopus
  17. J. Szolgayová, S. Fuss, and M. Obersteiner, “Assessing the effects of CO2 price caps on electricity investments—a real options analysis,” Energy Policy, vol. 36, no. 10, pp. 3974–3981, 2008. View at Publisher · View at Google Scholar · View at Scopus
  18. S. Heydari, N. Ovenden, and A. Siddiqui, “Real options analysis of investment in carbon capture and sequestration technology,” Computational Management Science, vol. 9, no. 1, pp. 109–138, 2012. View at Publisher · View at Google Scholar · View at Scopus
  19. A. L. Soyster, “Technical note—convex programming with set-inclusive constraints and applications to inexact linear programming,” Operations Research, vol. 21, no. 5, pp. 1154–1157, 1973. View at Publisher · View at Google Scholar
  20. A. Ben-Tal, L. El Ghaoui, and A. Nemirovski, Robust Optimization, Princeton University Press, Princeton, NJ, USA, 2009.
  21. D. Bertsimas, D. B. Brown, and C. Caramanis, “Theory and applications of robust optimization,” SIAM Review, vol. 53, no. 3, pp. 464–501, 2011. View at Publisher · View at Google Scholar · View at Scopus
  22. L. El Ghaoui and H. Lebret, “Robust solutions to least-squares problems with uncertain data,” SIAM Journal on Matrix Analysis and Applications, vol. 18, no. 4, pp. 1035–1064, 1997. View at Publisher · View at Google Scholar · View at Scopus
  23. S. Chandrasekaran, M. Gu, A. H. Sayed, and K. E. Schubert, “The degenerate bounded errors-in-variables model,” SIAM Journal on Matrix Analysis and Applications, vol. 23, no. 1, pp. 138–166, 2001. View at Publisher · View at Google Scholar · View at Scopus
  24. H. Geman, Commodities and Commodity Derivatives: Modeling and Pricing for Agriculturals, Metals and Energy, John Wiley & Sons, Chichester, UK, 2005.
  25. R. S. Pindyck, “The long-run evolution of energy prices,” The Energy Journal, vol. 20, no. 2, pp. 1–27, 1999. View at Google Scholar
  26. G. H. Golub and C. F. Van Loan, “An analysis of the total least squares problem,” SIAM Journal on Numerical Analysis, vol. 17, no. 6, pp. 883–893, 1980. View at Publisher · View at Google Scholar
  27. China Electric Power Publishing Committee, China Electric Power Yearbook, China Electric Power, Beijing, China, 2014.
  28. P.-L. Lam, “Pricing of electricity in China,” Energy, vol. 29, no. 2, pp. 287–300, 2004. View at Publisher · View at Google Scholar · View at Scopus
  29. D. Zhang, P. Liu, L. Ma, Z. Li, and W. Ni, “A multi-period modelling and optimization approach to the planning of China's power sector with consideration of carbon dioxide mitigation,” Computers & Chemical Engineering, vol. 37, pp. 227–247, 2012. View at Publisher · View at Google Scholar · View at Scopus