Thesis

Decarbonizing electrical power generation through carbon pricing : generation expansion planning and investment assessment

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Awarding institution
  • University of Strathclyde
Date of award
  • 2025
Thesis identifier
  • T17470
Person Identifier (Local)
  • 201662090
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Department, School or Faculty
Abstract
  • Generation Expansion Planning (GEP) consists of finding the optimal long-term plan for the construction of new generation capacity subject to various economic and technical constraints to meet future load demand. This thesis develops a GEP model that incorporates a carbon pricing mechanism to stimulate long-term power system decarbonization without relying on annual emission caps. The model simulates at an hourly time resolution (8,760 hours per year) enabling detailed simulation of renewable variability and hourly demand fluctuations. It also includes key low-carbon technologies such as pumped storage and carbon capture, utilization, and storage (CCUS). This study employs scenario analysis to evaluate the impacts of carbon pricing, fuel price trajectories, electricity demand growth, and technology availability on the expansion of the power generation system. The results reveal how different assumptions shape technology mix for electricity supply, system costs, carbon emissions, and technology deployment trajectories. In particular, rising carbon prices and ambitious renewable energy targets drive a clear transition away from coal-based generation toward cleaner alternatives such as gas, nuclear, and renewables, while encouraging investment in supporting technologies like pumped storage and CCUS. These insights provide evidence-based guidance for policymakers and energy planners in designing effective carbon pricing policies to achieve long-term climate goals. In addition, LCOE, or levelized cost of electricity, is defined as the average total cost of building and operating an energy system over its lifetime, divided by the total energy output produced during that period. It represents the minimum price at which electricity must be sold to break even over the life of the plant. The proposed LCOE approach is employed, which integrates annual carbon prices and annual capacity factors derived from the GEP model. This provides more reliable investment assessments by reflecting the actual operating conditions of thermal power plants under different scenarios, rather than relying on static assumptions that may not hold in future low-carbon systems. The GEP and LCOE models are implemented using the General Algebraic Modelling System (GAMS) and Microsoft Excel, and are tested under 18 distinct scenarios representing a range of policy and market conditions. Results offer insights into optimal system development pathways and the investment viability of thermal power technologies in carbon-constrained environments. These findings highlight how different combinations of carbon pricing, fuel cost trajectories, technology availability, and renewable energy targets influence the long-term competitiveness of thermal power plant. These insights can support policymakers and investors in designing more adaptive and economically viable strategies for decarbonizing the East Asian regional power system.
Advisor / supervisor
  • Lo, Kwok
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