Valuation of wind power distributed generation by using Longstaff–Schwartz option pricing method

In the context of decaying capital cost and uncertain revenues, prospective valuation of a wind power distributed generation (DG) project is difficult. The conventional net present value (NPV) presents a static picture that does not account for the value of waiting for better market conditions to proceed with a DG investment. On the contrary, real options (RO) analysis does account for the managerial flexibility to switch between options over the investment horizon.

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Year of publication:	2015
Authors:	Díaz, Guzmán ; Moreno, Blanca ; Coto, José ; Gómez-Aleixandre, Javier
Published in:	Applied Energy. - Elsevier, ISSN 0306-2619. - Vol. 145.2015, C, p. 223-233
Publisher:	Elsevier
Subject:	Real options \| Wind energy conversion \| Learning curve \| Stochastic processes

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011263357