CCS or renewables? Power project portfolio investment and low-carbon transition pathways under uncertain carbon trading price

To support the decarbonization of China’s power sector, this study develops an uncertainty-based project portfolio optimization model for selecting CCS and renewable energy projects under uncertain carbon trading prices and carbon quota constraints. Carbon trading price, electricity price, fuel cost, and investment cost are modeled as uncertain variables. Using data from 72 real-world projects of a major Chinese power enterprise, nine carbon trading price scenarios with different growth rates and volatility levels are analyzed. The results show that carbon trading price growth is the dominant factor affecting technology choice, NPV, and emission reduction, while volatility has a smaller effect. The high-growth and low-volatility scenario S31 yields the highest expected NPV of RMB 1,825.9 billion, with net CO2 emissions of 1,645 Mt, whereas the low-growth and high-volatility scenario S13 yields the lowest expected NPV of RMB 674.8 billion. The lowest net CO2 emissions occur in S33, at 1,605 Mt. Under the benchmark scenario, electricity price fluctuations have the strongest influence on technology choice, while changes in fuel and investment costs have smaller effects.