Search

Currently, there are considerable discrepancies between China's central government and some local governments in attitudes towards coal to liquids (CTL) technology. Energy return on investment (EROI) analysis of CTL could provide new insights that may help solve this dilemma. Unfortunately, there has been little research on this topic; this paper therefore analyses the EROI of China's Shenhua Group Direct Coal Liquefaction (DCL) project, currently the only DCL commercial project in the world. The inclusion or omission of internal energy and by-products is controversial. The results show that the EROIstnd without by-product and with internal energy is 0.68-0.81; the EROIstnd (the standard EROI) without by-product and without internal energy is 3.70-5.53; the EROIstnd with by-product and with internal energy is 0.76-0.90; the EROIstnd with by-product and without internal energy is 4.13-6.14. Furthermore, it is necessary to consider carbon capture and storage (CCS) as a means to control the CO2 emissions. Considering the added energy inputs of CCS at the plant level, the EROIs decrease to 0.65-0.77, 2.87-3.97, 0.72-0.85, and 3.20-4.40, respectively. The extremely low, even negative, net energy, which may be due to high investments in infrastructure and low conversion efficiency, suggests CTL is not a good choice to replace conventional energy sources, and thus, Chinese government should be prudent when developing it. [ABSTRACT FROM AUTHOR]

Carbon capture and storage (CCS) technology is an attractive technique to help power enterprises with carbon emission reduction. In this paper, a two-stage CCS retrofit investment in an existing coal-fired power plant in China including the first stage (demonstration project) and second stage (commercial operation) is taken as a case to decide when and whether to invest. Distinguished from previous models, a binomial lattice compound real options model including the options to defer and expand is established. Further, the accounting approaches to certified emission reductions (CERs) based on the thermodynamics principle are first proposed concerning this model. We find the total invest value under compound options model is less than zero, although greater than that by NPV method. The results indicate carbon prices and subsidy policy, respectively, play a dominating role in initiating the CCS investment at the first and second stage. The growth in government subsidy at the first stage has obviously greater effects on decreasing critical carbon trading prices. Besides, the minimum critical carbon price is 87.09 RMB/ton with full subsidy, greater than the current price (56 RMB/ton). This also illustrates it is not the optimal occasion to invest in a CCS retrofit project for power enterprises. [ABSTRACT FROM AUTHOR]