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Using real options model based on Monte-Carlo Least-Squares for economic appraisal of flexibility for electricity generation with VVER-1000 in developing countries by Najafi, P. (author);Talebi, S. (author) is a Engineering article available to read on EtoBox.
What is Using real options model based on Monte-Carlo Least-Squares for economic appraisal of flexibility for electricity generation with VVER-1000 in developing countries about?
This paper aims to measure managerial flexibility value in deferring the investment of deployment. VVER-1000 nuclear power plants (NPPs) in developing countries. A methodology based on the Monte-Carlo simulation and adapting the backward dynamic least-squares programming is implemented to build a Real-Options-Valuation (ROV) framework. The influence of five uncertain market factors, including the riskadjusted ratio; the expiration date of the option; the specific cost of capital investment; the volatility, and the drift rate of the market price of electricity, on the optimum investment timing and the exercise value of the deferral-option is studied. Results indicate that despite the preliminary analysis with the traditional Discounted-Cash-Flow (DCF) investment appraisal tool, the ROV method provides attractive opportunities for decisionmakers to analyze and capture the embedded possible real-options and upside potential risks managerial decisions by keeping the investment option alive and postponing investment for options maturity. Finally, performing a sensitivity analysis highlights that extending the validity period for investment in irreversible nuclear electricity generation
Who reads Using real options model based on Monte-Carlo Least-Squares for economic appraisal of flexibility for electricity generation with VVER-1000 in developing countries?
It is typically read by researchers, students, and practitioners in Engineering.
- Author
- Najafi, P. (author);Talebi, S. (author)
- Publisher
- Elsevier BV
- Published
- 2021
- Language
- EN
- Field
- Engineering (Physical Sciences)