The evolutionary analysis of investment in CCS-EOR under dual carbon target—From the perspective of multi-agent involvement

• Published in: International journal of greenhouse gas control Vol. 135; p. 104107
• Main Authors: Zhang, Weiwei, Chen, Ximei, Tian, Jie
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.06.2024
• Subjects: CCS-EOR technology; cooperation; Evolutionary game theory; Investment analysis; Investment analysis; CCS-EOR technology; Evolutionary game theory; cooperation
• ISSN: 1750-5836; 1878-0148
• DOI: 10.1016/j.ijggc.2024.104107

•The government's clean electricity subsidy and carbon utilization subsidy have pushed the timing of CCS retrofitting significantly forward, but the initial investment subsidy has little impact on it.•Under the cooperation mode of coal-fired power plants and oilfield enterprises, the optimal cost-sharing ratio of the initial investment for coal-fired power plants is about 0.4 to promote both sides to reach cooperation faster.•The carbon tax policy effectively propels the development of CCS-EOR technology. When the carbon tax rises from 30 CNY/t to 120CNY/t, power plants will conduct CCS retrofitting investment two years in advance. Carbon capture and storage with enhanced oil recovery (CCS-EOR) technology plays a crucial role in achieving dual carbon targets in China. And the rapid diffusion of technology requires collaboration among various stakeholders involved in industrial chain of CCS-EOR project and then it will cause conflict of interest among the participants. In order to solve the problem existing in CCS-EOR promotion and propel the rapid deployment of low-carbon technology in China, the paper constructs a tripartite evolutionary game model by incorporating the strategic choices of coal-fired power plants, oilfield enterprises and governments into the framework, explores the respective dynamic evolutionary path of three parties and analyzes the impact of each parameter change on the system evolution results Through the numerical simulation, the paper identifies the optimal evolutionary path to spur the application of CCS-EOR and determine their strategy choices of three involved subjects in the game framework. Based on the sensitivity analysis, results are given as follows: (1) The government's clean electricity subsidy and carbon utilization subsidy have pushed the timing of CCS retrofitting significantly forward, but the initial investment subsidy has little impact on it; (2) Under the cooperation mode of coal-fired power plants and oilfield enterprises, the optimal cost-sharing ratio of the initial investment for coal-fired power plants is about 0.4 to promote both sides to reach cooperation faster. Once it exceeds 0.4, the probability of cooperation between them will be significantly reduced; (3) The carbon tax policy effectively propels the development of CCS-EOR technology. When the carbon tax rises from 30 CNY/t to 120CNY/t, power plants will conduct CCS retrofitting investment two years in advance.