{"query_echo":{"q":"","filters":{"analysis_type":["stochastic modeling"]},"warnings":[{"code":"facet_value_not_in_vocabulary","message":"Value 'stochastic modeling' for facet 'analysis_type' is not in the controlled vocabulary."}]},"total":{"value":3,"relation":"eq"},"page":1,"page_size":20,"self":"https://climateinsightsdirectory.org/api/v1/search?analysis_type=stochastic+modeling","stability":"beta","ai_marking":{"digital_source_type":{"uri":"http://cv.iptc.org/newscodes/digitalsourcetype/trainedAlgorithmicMedia","name":"Created using Generative AI"},"notice":"Summary and key insights are generated using artificial intelligence."},"results":[{"id":"bc3res-000125","url":"https://climateinsightsdirectory.org/document/bc3res-000125","title":"EVALUATION OF TWO ALTERNATIVE CARBON CAPTURE AND STORAGE TECHNOLOGIES","publisher":{"name":"Basque Centre for Climate Change","organization":"basque-centre-for-climate-change"},"document_type":"policy brief","language":"en","date_published":"2013-05","source_url":"https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201307290654511714670453.pdf","generator":"Climate Insights Directory","generated_fields":["summary","key_insights","climate_tags","geography_discussed","analysis_type"],"summary":{"text":"The analysis finds that CCS without EOR is currently unprofitable due to low carbon prices, while CCS combined with EOR and DSF storage can be profitable if oil prices remain above a specific threshold. The study highlights that high investment costs and energy efficiency losses at power plants create significant financial barriers, necessitating either high commodity prices or substantial government subsidies to incentivize early adoption.","ai_generated":true,"unit":"bc3res-000125#summary","date_modified":"2026-10-23"},"key_insights":[{"text":"CCS without EOR is considered highly unprofitable under current and projected carbon market prices, requiring an initial carbon price equivalent to a constant price of $73.91/tCO2 to be profitable.","ai_generated":true,"unit":"bc3res-000125#insight-1","date_modified":"2026-10-23"},{"text":"Investment in CCS combined with EOR and secondary deep saline formation (DSF) storage is profitable (NPV > 0) only if the long-term equilibrium price for oil is higher than $50.95/barrel.","ai_generated":true,"unit":"bc3res-000125#insight-2","date_modified":"2026-10-23"},{"text":"When the timing of the investment is flexible, the trigger price for optimal investment in CCS with EOR increases to $89.29/barrel.","ai_generated":true,"unit":"bc3res-000125#insight-3","date_modified":"2026-10-23"},{"text":"Implementing CCS at a coal-fired power plant results in a significant loss of energy efficiency, estimated at 10.34%, which corresponds to 26.67% of the electricity that would have been generated without the technology.","ai_generated":true,"unit":"bc3res-000125#insight-4","date_modified":"2026-10-23"},{"text":"The profitability of CCS technologies is heavily dependent on the volatility of three primary commodity prices: electricity, oil, and carbon emission allowances.","ai_generated":true,"unit":"bc3res-000125#insight-5","date_modified":"2026-10-23"},{"text":"Current carbon prices are too low to provide significant incentives for investing in CCS, and the cost of subsidies required to encourage early investment in non-EOR CCS would reach billions of dollars.","ai_generated":true,"unit":"bc3res-000125#insight-6","date_modified":"2026-10-23"}],"climate_tags":["carbon capture and storage","coal-fired power station","energy efficiency","climate finance","carbon price"],"geography_discussed":["United Kingdom","Spain"],"frame_perspective":[],"analysis_type":["economic evaluation","stochastic modeling","sensitivity analysis"]},{"id":"bc3res-000062","url":"https://climateinsightsdirectory.org/document/bc3res-000062","title":"Optimal Abandonment of Coal-Fired Stations in the EU","publisher":{"name":"Basque Centre for Climate Change","organization":"basque-centre-for-climate-change"},"document_type":"research paper","language":"en","date_published":"2010-05","source_url":"https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201005260538411961619361.pdf","generator":"Climate Insights Directory","generated_fields":["summary","key_insights","climate_tags","geography_discussed","analysis_type"],"summary":{"text":"The study investigates the optimal abandonment of coal-fired power plants in the EU, considering uncertainties in coal, gas, and CO2 emission allowance prices. Using a three-dimensional binomial lattice, the authors find that abandonment is unlikely unless CO2 prices reach very high levels, particularly because plants can operate as peaking units. The decision is heavily influenced by the plant's remaining lifetime, thermal efficiency, and the volatility of carbon prices.","ai_generated":true,"unit":"bc3res-000062#summary","date_modified":"2026-10-23"},"key_insights":[{"text":"The ability of coal-fired plants to operate as peaking units—running only when demand is high and conditions are favorable—significantly delays abandonment. Without this flexibility, the trigger CO2 price for a plant with a 10-year remaining life drops from €162.40/tCO2 to €45.6/tCO2.","ai_generated":true,"unit":"bc3res-000062#insight-1","date_modified":"2026-10-23"},{"text":"High volatility in CO2 allowance prices negatively affects the abandonment option and delays the closure of plants. This is because operators can produce when prices are low and simply wait (assuming only fixed costs) when prices are high.","ai_generated":true,"unit":"bc3res-000062#insight-2","date_modified":"2026-10-23"},{"text":"Higher expected growth rates (drift) in future CO2 allowance prices lower the threshold price required to trigger abandonment. For a plant with a 5-year remaining life and volatility below 0.3, a 20% growth expectation can trigger abandonment at prices around €30/tCO2.","ai_generated":true,"unit":"bc3res-000062#insight-3","date_modified":"2026-10-23"},{"text":"The residual (salvage) value of the plant influences the abandonment trigger; a higher residual value lowers the CO2 price required to justify closing the plant.","ai_generated":true,"unit":"bc3res-000062#insight-4","date_modified":"2026-10-23"}],"climate_tags":["coal-fired power station","carbon dioxide emissions","European Union Emission Trading Scheme 1","carbon capture and storage","electricity market","energy transition","natural gas"],"geography_discussed":["France","Belgium","Germany"],"frame_perspective":[],"analysis_type":["financial analysis","stochastic modeling","sensitivity analysis"]},{"id":"bc3res-000053","url":"https://climateinsightsdirectory.org/document/bc3res-000053","title":"Optimal Investment in Energy Efficiency Under Uncertainty","publisher":{"name":"Basque Centre for Climate Change","organization":"basque-centre-for-climate-change"},"document_type":"research paper","language":"en","date_published":"2009-11","source_url":"https://www.bc3research.org/h6T8Uy8Nm4gFs0O/200911261201201772437402.pdf","generator":"Climate Insights Directory","generated_fields":["summary","key_insights","climate_tags","geography_discussed","analysis_type"],"summary":{"text":"The research employs a three-dimensional binomial lattice and real options analysis to determine the trigger investment cost for energy efficiency projects. It finds that the 'energy efficiency paradox'—where worthwhile projects are not undertaken—can be explained by the value of the option to wait, particularly when the remaining useful life of a facility is short.","ai_generated":true,"unit":"bc3res-000053#summary","date_modified":"2026-10-23"},"key_insights":[{"text":"The authors identify three primary sources of uncertainty that affect the decision to invest in energy efficiency: fuel commodity prices, emission allowance prices, and the overall investment cost.","ai_generated":true,"unit":"bc3res-000053#insight-1","date_modified":"2026-10-23"},{"text":"In the base case scenario with an initial investment cost of 500, it is optimal to invest when the facility has a remaining useful life of more than six years; for facilities with six years or less, it is preferable to wait even if the Net Present Value (NPV) is positive.","ai_generated":true,"unit":"bc3res-000053#insight-2","date_modified":"2026-10-23"},{"text":"Higher volatility in investment costs increases the threshold for investment, meaning a lower investment cost is required to make the project optimal. For a 15-year maturity, increasing volatility from 0.10 to 0.20 requires an 11.4% fall in the trigger cost.","ai_generated":true,"unit":"bc3res-000053#insight-3","date_modified":"2026-10-23"},{"text":"The study suggests that public subsidies can effectively bring forward energy efficiency investments; for example, a 50% subsidy on initial costs can make investment optimal six years earlier than without the subsidy.","ai_generated":true,"unit":"bc3res-000053#insight-4","date_modified":"2026-10-23"}],"climate_tags":["energy efficiency","carbon dioxide emissions","coal","European Union Emission Trading Scheme 1","climate finance","greenhouse gas emissions"],"geography_discussed":["World","European Union","United States","Spain"],"frame_perspective":[],"analysis_type":["financial modeling","sensitivity analysis","stochastic modeling"]}]}