Currently the low carbon prices, low Spreads and regulatory uncertainties hampers the business cases for coal-fired power plants with post-combustion capture (PCC) in Europe. Improvement of the business case of coal-fired power plants with post combustion capture requires a diffe
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Currently the low carbon prices, low Spreads and regulatory uncertainties hampers the business cases for coal-fired power plants with post-combustion capture (PCC) in Europe. Improvement of the business case of coal-fired power plants with post combustion capture requires a different approach in terms of operational dispatch and in terms of investment planning. Both items have been assessed using a comprehensive power plant valuation model developed by TNO. To change the typical base-load production profile of a coal-fired power plant into a more flexible production profile, a Flexible Operating Mechanisms (FOMs) has been developed for PCC. Based on the results of the techno-economic modeling, FOMs improve the business case. Next to this, FOMs present coal fuelled power plants with additional flexibility. This added flexibility could allow coal plants to provide auxiliary services to the grid and remain competitive in relation to cleaner gas-fired plants. The increase of operational flexibility with FOMs created a significant improvement of the NPV value and, therefore, it is justified to look in much more detail how the operational flexibility of a coal-fired power plant with Carbon Capture can be improved. Running a power plant with a 100% capture unit at base load will require significant amount financial support to close the gap. Starting with a smaller capture unit reduce the financial risk and could improve the business case of the coal-fired power plant without PCC from a marginal cost point of view. The main reason for this is the increase of flexibility, by switching on/off the capture unit. Next to this, the decision to invest is always affected by the opportunity costs of making a commitment now, and thereby, giving up the option of waiting for improved market condition. Increasing the size of the capture plant in stages enables the investor to manage those opportunity cost much better.
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