The aim of this paper is to analyze the feasibility of a new entrant power plant based on coal with an installed Carbon Capture and Storage (CCS) system. The plant will be analysed as an Independent Power Producer (IPP) based in Croatia and therefore a part of the South East European Regional Electricity Market (SEE REM) and a member of EU Emission Trading Scheme (EU ETS) obligated to pay for its emissions through Emission Unit Allowances (EUA). Long Run Marginal Cost (LRMC) of the plant will be calculated and certain sensitivities included. By using a market simulator of the region and implementing the model of the plant in question, the performance of the power plant on the electricity market is evaluated and the influences of different emission prices are analyzed. The research results in a prediction of the price of EUA at which a CCS coal-fired power plant becomes economically justified.
Keywords: Carbon Capture and Storage, Independent Power Producer, Emission Trading Scheme, Emission Unit Allowances, Coal Power Plant, South East European Regional Electricity Market
Jel Code: D24