Research Summaries

Back Collaborative Research: Optimizing Incentives for Carbon Capture and Storage Systems

Fiscal Year 2015
Division Graduate School of Operational & Information Sciences
Department Operations Research
Investigator(s) Singham, Devaushi I.
Sponsor National Science Foundation (NSF)
Summary The research objective of this proposal is to determine the effect of market-based incentives on the implementation of carbon capture and storage (CCS) technology through theoretical extensions of mechanism design and simulation optimization. CCS is a major part of a multi-faceted approach to reducing CO2 emissions from coal and natural gas power plants, whereby emissions are captured from power sources and stored underground instead of polluting the atmosphere. In parallel to ongoing efforts to develop improved CCS technology, we propose modeling the decision processes of CCS participants who face uncertainty in both costs and emissions, and optimize incentives to encourage storage operators to provide the service of transportation and storage of CO2 from emissions sources to a centralized location.
To achieve the objective of the proposal, we plan to carry out three research tasks. First, we will investigate the intrinsic relationship among the contract prices and quantities, cost structures, and emissions profiles using the mechanism design framework. This approach will help the storage operator decide which emissions sources to serve, what contract prices and quantities to offer such that emission sources are induced to participate, and what pipeline capacity to build. Second, we
will examine the impact of a cap-and-trade policy on a storage operator’s contracts and emissions sources’ participation decisions by incorporating permit trading explicitly in CCS participants’ decisions. We will compare the efficiency between this policy and that of the marginal-tax policy. Finally, we will create a simulation optimization framework to allow for optimal contract design when data is available but the mechanism design formulation is analytically intractable.
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Publications Publications, theses (not shown) and data repositories will be added to the portal record when information is available in FAIRS and brought back to the portal
Data Publications, theses (not shown) and data repositories will be added to the portal record when information is available in FAIRS and brought back to the portal