A Review of Probabilistic and Novel Approaches to Cost Assessment in CCUS Projects

Abstract

Although the renewable energy sector is making progress, there is still a long way to go before green energy can be fully utilized. In this context, Carbon Capture Utilization and Storage (CCUS) technologies can act as a temporary bridge between a high‐emission past and a low‐emission future. High costs, together with uncertainties and risks related to technology, economics, policy, and regulation, are among the main reasons why global CCUS deployment has not yet reached the targets set by the International Energy Agency. Conventional deterministic methods provide single‐point estimates and can offer an initial picture of CCUS projects. However, probabilistic models allow project evaluation while accounting for uncertainty and investment flexibility. In this review, we aim to examine, step by step, how probabilistic economic simulation is carried out in CCUS projects. This review first explains the sources of uncertainty reported in different studies and classifies them into technical, economic, and socio‐political categories. Then, we examine how uncertain parameters are modeled using stochastic processes, probability distributions, or scenario‐based approaches. Finally, the review explains how economic evaluation methods and probabilistic computational techniques are used to simulate the overall CCUS project. Previous studies have discussed CCUS uncertainties and modeling in a fragmented manner; however, this article provides a comprehensive framework for modeling CCUS economics under uncertainty. In recent studies, each study uses specific assumptions. Therefore, one of the main gaps in the recent literature is the lack of a standard benchmark framework that enables comparison between models.