Evaluation of Two Alternative Carbon Capture and Storage Technologies: A Stochastic Model

The research paper assesses the economic viability of CCS technologies in the UK, specifically comparing CO2-EOR paired with DSF storage against standalone DSF storage. Using a stochastic model calibrated with UK futures market data for electricity, oil, and carbon allowances, the authors find that only the EOR-paired option is potentially profitable, provided long-term oil prices remain high. The study highlights that current carbon prices are insufficient to incentivize standalone CCS and that the option to delay investment increases the required 'trigger price' for oil to make immediate investment optimal.

• Investments in CCS combined with enhanced oil recovery (EOR) and secondary deep saline formation (DSF) storage can be profitable, with a positive Net Present Value (NPV) of +4,639.1 M$ in the base case, primarily driven by high oil prices.
• The break-even point for a CO2-EOR + DSF project occurs at a long-term equilibrium oil price of 50.955 $/barrel; below this price, the NPV becomes negative.
• When the option to postpone investment for up to ten years is considered, the 'trigger price' for oil required to make immediate investment optimal rises to 89.29 $/barrel, compared to the 50.955 $/barrel required for a simple NPV calculation.
• Standalone CCS using only deep saline formations (DSF) is highly unprofitable at current carbon prices; for a 20-year project, the initial carbon price would need to exceed 37.02 $/tCO2 (with a 5.208% drift) to achieve a positive NPV.
• The installation of CCS in a coal-fired power plant results in a significant efficiency loss of 10.34 percentage points (decreasing from 38.77% to 28.43%), which equates to a loss of 26.67% of the electricity that would have been generated without CCS.
• Carbon price trends and volatility do not currently provide sufficient incentives for standalone CCS (CO2-DSF) investments; a constant carbon price of 73.91 $/tCO2 would be required to reach NPV=0 for a 40-year storage project.
• The model identifies three primary sources of uncertainty affecting CCS investment profitability: the price of electricity, the price of oil, and the price of carbon allowances.

APA

Abadie, L. M., Galarraga, I., & Rübbelke, D. (2013). Evaluation of Two Alternative Carbon Capture and Storage Technologies: A Stochastic Model. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201409220941501606742634.pdf

Chicago

Abadie, Luis M., Ibon Galarraga, and Dirk Rübbelke. Evaluation of Two Alternative Carbon Capture and Storage Technologies: A Stochastic Model. Basque Centre for Climate Change, 2013. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201409220941501606742634.pdf.

Wikipedia

{{cite report |last1=Abadie |first1=Luis M. |last2=Galarraga |first2=Ibon |last3=Rübbelke |first3=Dirk |title=Evaluation of Two Alternative Carbon Capture and Storage Technologies: A Stochastic Model |publisher=Basque Centre for Climate Change |date=March 2013 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201409220941501606742634.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{abadie2013evaluation, author = {Abadie, Luis M. and Galarraga, Ibon and Rübbelke, Dirk}, title = {{Evaluation of Two Alternative Carbon Capture and Storage Technologies: A Stochastic Model}}, institution = {Basque Centre for Climate Change}, year = {2013}, month = mar, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201409220941501606742634.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }