Real Options for Increasing Value in Industrial Water Infrastructure

This paper presents a flexible approach that is real options to increase expected value in water infrastructure systems. Real options make an adaptable ability to respond the systems more effective to good opportunity and withdrawn unproductive situations from loss of investments in the future. The result of this approach is compared with traditional net present value in cases of with and without uncertainty to show expected values of investment of industrial water demand and supply schemes. It shows that real options in system can increase expected value of investment by reducing negative risks and increasing opportunities. An example of water infrastructure investment to support increasing industrial water demand demonstrates the use and results of this approach. Copyright Springer Science+Business Media B.V. 2010