In 2022, the Danish Energy Agency issued a tender aimed at subsidising carbon capture and storage (CCS) solutions in Denmark. Vestforbrænding, a publicly owned, waste-to-energy company, planned to bid for this subsidy to capture CO2 at their point source in the waste disposal plant in Glostrup near Copenhagen.
The business case for such a plant is complex because of unknown technology costs and multiple regulatory, fiscal, and tax complications. In addition, a carbon capture plant at Vestforbrænding would affect the operation of heat and electricity production, which in any case fluctuates with seasonal demand. We were asked to quantify the CCS business case and the main risks involved, and to support Vestforbrænding in the tender process.
We did so by building a forward-looking cash flow model using various data inputs and parameters. This model allowed us to stress-test specific parameters and inputs, therefore identifying which uncertainties had the biggest implications for the business case.
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