Research Summary:

In an era of global energy transition, what remains of the investment case for fossil fuels and their supporting infrastructure?

Below, I summarise my research across two themes on this topic: 

Economics of Phasing Out Fossil Fuel Infrastructure 

In this theme, I analyse the financial impacts of investing in fossil fuel infrastructure under net-zero scenarios (1,2). In my paper, “Is There a Future for the Gas Network in a Low-Carbon Energy System?” published in Energy Policy, I assess the risks of transitioning a national gas network (3). The study highlights how revenues are tied to fixed-cost contracts based on maximum demand, not actual usage. Using an optimisation model, I show that higher tariffs will be required to cover costs from a shrinking customer base, despite rising gas use in low-carbon scenarios with carbon capture and biogas. 

Natural gas is often seen as a bridge fuel, balancing the variability of renewable energy. European governments support this with "capacity remuneration" payments, which help gas plants maintain capacity. In “The Variation in Capacity Remuneration Requirements in European Electricity Markets” (The Energy Journal), I explore these payments across Europe to sustain gas investments through the 2030s (4). My analysis reveals significant regional variations, driven by operational constraints and national policies, which could affect market competition. 

In another study, “Can European Electric Utilities Manage Asset Impairments Arising from Net Zero Carbon Targets?” (Journal of Corporate Finance), I developed a framework to assess how utilities can manage impairments of carbon-emitting plants under net-zero targets (5). I evaluate whether firms can offset early closure losses by reallocating funds to green projects and find that most European utilities can meet their goals with timely action, though delays could create financial challenges. Some may even aim for an earlier net-zero date.

Carbon Management for Net Zero 

Firms may invest in Greenhouse Gas Removal (GGR) to offset their emissions, prolonging their fossil fuel use, but strategies for integrating GGR into corporate plans and determining optimal government support remain unclear. In my global review, “A Review of Commercialisation Mechanisms for Carbon Dioxide Removal” (Frontiers in Climate), I find that GGR policies are mostly market-driven, underfunded, and favour less durable nature-based over geological methods (6). 

To address the risk of CO₂ re-release from nature-based methods, many policies require firms to contribute extra CO₂ credits to buffer pools. However, these pools are underfunded and lack a framework to determine the required GGR. In my working paper, “Carbon Storage Portfolios for the Transition to Net Zero” (7), I assess the effectiveness of combining forestry, biochar, and geological storage in risk-adjusted portfolios. My findings suggest these portfolios can fully neutralise emissions over millennia, though current buffer pools need to be much larger to support net-zero claims. I also examine their resilience under different warming scenarios. To reach net-zero GHGs, firms and governments must also target methane. 

After stabilising in the early 2000s, atmospheric methane levels have surged since 2007, with significant implications for global warming. Given that one tonne of methane has the warming impact of up to 128 tonnes of CO₂, my paper, “Economics of Enhanced Methane Oxidation Relative to Carbon Dioxide Removal” (Environmental Research Letters), evaluates the cost-effectiveness of methane oxidation as part of a multi-gas net-zero strategy (8). I find that enhanced oxidation could play a key role, depending on policy priorities like the metrics applied.

Selected Research Articles:

For a full list of outputs please see my CV.

1. Curtin, Joesph, Celine McInerney, Brian Ó Gallachóir, Conor Hickey, Paul Deane, Peter Deeney. "Quantifying stranding risk for fossil fuel assets and implications for renewable energy investment: A review of the literature." Renewable and Sustainable Strategy Reviews 116 (2019).

2. Caldecott, Ben, Alex Clark, Krister Koskelo, Ellie Mullholland and Conor Hickey. "Stranded Assets: Environmental Drivers, Societal Challenges, and Supervisory Responses." Annual Review of Environment and Resources 46 no. 417 (2021).

3. Hickey, Conor, Paul Deane, Celine McInerney, and Brian O' Gallachoir. "Is There a Future for the Gas Network in a Low Carbon Energy System?" Energy Policy 126 (2019).

4. Hickey, Conor, Derek Bunn, Paul Deane, Celine McInerney, and Brian O' Gallachoir. "The Variation in Capacity Remuneration Requirements in European Electricity Markets." Energy Journal 42, no. 2 (2020).

5. Hickey, Conor, John O'Brien, Ben Caldecott, Celine McInerney, and Brian O' Gallachoir. "Can European Electric Utilities Manage Asset Impairments Arising from Net Zero Targets?" Journal of Corporate Finance 70, no. 102075 (2021).

6. Hickey, Conor, Sam Fankhauser, Stephen Smith, and Myles Allen. "A Review of Commercialisation Mechanisms for Carbon Dioxide Removal." Frontiers in Climate 4, no. 258 (2023).

7. Hickey, Conor, and Myles Allen. "Carbon Storage Portfolios for the Transition to Net Zero." Revise and Resubmit at Joule (2025)

8. Hickey, Conor, and Myles Allen. "Economics of Enhanced Methane Oxidation Relative to Carbon Dioxide Removal." Environmental Research Letters 19, no. 4043 (2024).