Substantial R&D efforts are currently directed towards the development of combined heat and power (CHP) systems that automatically and seamlessly connect to the power grid. In this paper we develop a real options model to assess the impact that the operational flexibility characterizing such...

Former generation capacity expansion models were formulated as optimization problems. Theseincluded a reliability criterion and hence guaranteed security of supply. The situation is differentin restructured markets where investments need to be incentivised by the margin resulting fromelectricity...