SPE Economics & Management
Volume 4, Number 1, January 2012, pp. 13-23

SPE-153117-PA

Decision Criteria for Climate Projects

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DOI  More information 10.2118/153117-PA http://dx.doi.org/10.2118/153117-PA

Citation

  • Osmundsen, P. and Emhjellen, M. 2012. Decision Criteria for Climate Projects. SPE Econ & Mgmt  4 (1): 13-23. SPE-153117-PA. http://dx.doi.org/10.2118/153117-PA.

Discipline Categories

  • 2.5.1 Global Climate Change/CO2 Capture and Management
  • 3.1.8 Capital Budgeting and Project Selection
  • 3.1.7 Project Economics/Valuation
  • 3.7.4 Energy Policy and Regulation
  • 4.10.5 Cost Estimation and Control

Keywords

  • climate projects, decision analyses, CCS, CO2

Summary

This article analyzes commercial decision criteria for climate projects. The latter will normally be executed by private players, for whom decision criteria developed from a commercial perspective are important. But such criteria are also important for the government in calculating the size of subsidies required for various measures. A ranking of different solutions in a socioeconomic context must rest on calculations made from a commercial perspective. Examples of the subjects covered include the calculation of abatement unit costs and cost estimating for climate projects. The carbon-capture project at the Kårstø gas-fired power station in southwest Norway is used as a case throughout the analysis.

© 2011. Society of Petroleum Engineers

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History

  • Original manuscript received: 16 April 2010
  • Revised manuscript received: 8 April 2011
  • Manuscript approved: 31 August 2011
  • Published online: 12 December 2011
  • Version of record: 8 February 2012