IDEAS home Printed from https://ideas.repec.org/a/taf/uteexx/v57y2012i1p55-75.html
   My bibliography  Save this article

An Exit and Entry Study of Renewable Power Producers: A Real Options Approach

Author

Listed:
  • K. Min
  • Chenlu Lou
  • Chung-Hsiao Wang

Abstract

In recent years, there has been a substantial increase in renewable power production sites. However, such sites operated in the 1980s were often abandoned in the 1990s and their remnants are still visible. Hence, it is highly desirable to understand the exit and entry decisions of such sites. Toward this goal, we formulate and analyze models for such decisions regarding a single site from a real options perspective when the operation and maintenance costs follow a geometric Brownian motion and derive policy implications. An extensive numerical example for a wind farm illustrates some of the key features of this study.

Suggested Citation

  • K. Min & Chenlu Lou & Chung-Hsiao Wang, 2012. "An Exit and Entry Study of Renewable Power Producers: A Real Options Approach," The Engineering Economist, Taylor & Francis Journals, vol. 57(1), pages 55-75.
    • Handle: RePEc:taf:uteexx:v:57:y:2012:i:1:p:55-75
    DOI: 10.1080/0013791X.2011.651566
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/0013791X.2011.651566
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0013791X.2011.651566?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guerra, Manuel & Kort, Peter & Nunes, Cláudia & Oliveira, Carlos, 2018. "Hysteresis due to irreversible exit: Addressing the option to mothball," Journal of Economic Dynamics and Control, Elsevier, vol. 92(C), pages 69-83.
    2. Mahmoud A. Eissa & Boping Tian, 2017. "Lobatto-Milstein Numerical Method in Application of Uncertainty Investment of Solar Power Projects," Energies, MDPI, vol. 10(1), pages 1-19, January.
    3. Wenbo Shi & Tianke Feng, 2016. "Examining supply contracts under cost and demand uncertainties from supplier’s perspective: a real options approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(1), pages 83-97, January.
    4. Nadarajah, Selvaprabu & Secomandi, Nicola, 2023. "A review of the operations literature on real options in energy," European Journal of Operational Research, Elsevier, vol. 309(2), pages 469-487.
    5. Kozlova, Mariia, 2017. "Real option valuation in renewable energy literature: Research focus, trends and design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 180-196.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:uteexx:v:57:y:2012:i:1:p:55-75. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/UTEE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.