Business model and supporting policies for projects to implement carbon capture and power-to-gas technologies

Yikun Bai; Youzhong Zhang; Xingping Zhang; Tsan Sheng Ng

doi:10.1016/j.scitotenv.2023.164150

Business model and supporting policies for projects to implement carbon capture and power-to-gas technologies

Sci Total Environ. 2023 Aug 25:888:164150. doi: 10.1016/j.scitotenv.2023.164150. Epub 2023 May 15.

Authors

Yikun Bai¹, Youzhong Zhang², Xingping Zhang³, Tsan Sheng Ng⁴

Affiliations

¹ School of Economics and Management, North China Electric Power University, Beijing 102206, China.
² China Electric Power Planning & Engineering Institute, Beijing 100120, China. Electronic address: youzhong_z@ncepu.edu.cn.
³ School of Economics and Management, North China Electric Power University, Beijing 102206, China; Beijing Key Laboratory of New Energy and Low-Carbon Development, North China Electric Power University, Beijing 102206, China.
⁴ Department of Industrial System Engineering and Management, National University of Singapore, Singapore 117576, Singapore.

PMID: 37196951
DOI: 10.1016/j.scitotenv.2023.164150

Abstract

The project portfolio of carbon capture system and power to gas (CP project) is considered to be a key technology combination for achieving carbon emission reduction and recycling in the future. However, due to a dearth of associated engineering practices and business activities, there is no widely used business model for the large-scale deployment of the CP technology portfolio. The design and evaluation of the business model is crucial for projects with a long industrial chain and complex relationships between stakeholders, such as CP projects. Based on carbon chain and energy flow, this paper analyzes the cooperation mode and profitability among stakeholders in the CP industry chain, selects three suitable business models, and establishes nonlinear optimization models under the three business models. By analyzing the key factors (e.g. carbon price) that can promote investment and have policy influence, the tipping points of the key factors and the cost of support policies are given. Results show that the vertical integration model has the greatest demonstration deployment potential since it has the best performance in terms of cooperation and profitability realization. However, required crucial factors in the CP projects vary from business models, policy makers need to take appropriate supporting measures prudently.

Keywords: Business model; Carbon capture system; Circular economy; Power to gas; Supporting policy.