Optimal timing and capacity choice under the rate-of-return renewable energy support

MethodsX

Stein-Erik Fleten¹  Verena Hagspiel²  Mariia Kozlova³ 

[1] Corresponding author.;Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology, Norway;School of Business and Management, Lappeenranta University of Technology, Finland;

关键词: Dynamic programming;    Real options;    Renewable energy policy;    Investment timing;    Capacity choice;   

DOI  :  

来源: DOAJ

【 摘 要 】

This article presents a stylized renewable energy (RE) investment project profitability analysis under a rate-of-return RE support type. We use a dynamic programming approach to value the real options. While the method is widely used in RE policy analysis, the rate-of-return support is presented in this framework for the first time. We formulate a stylized RE project under the rate-of-return regulation in the dynamic programming framework and solve for optimal investment timing and project size. • A stylized renewable energy (RE) investment under rate-of-return RE support is presented in the dynamic programming framework; • The system is solved for optimal capacity choice in the presence of the electricity price uncertainty. We also comment on the optimal investment timing, which turns out to be a now-or-never decision in this case.

【 授权许可】

Unknown