Lobatto-Milstein Numerical Method in Application of Uncertainty Investment of Solar Power Projects
نویسندگان
چکیده
Recently, there has been a growing interest in the production of electricity from renewable energy sources (RES). The RES investment is characterized by uncertainty, which is long-term, costly, depend on feed-in-tariff and support schemes. In this paper, we address the real option valuation (ROV) of a solar power plant investment. The real option framework is investigated. This framework considers the renewable certificate price, furthermore the cost of delay between establishing and operating the solar power plant. The optimal time of launching the project and assess the value of deferred option are discussed. The new three stage numerical methods are constructed, the Lobatto3C-Milstein (L3CM) methods. The numerical methods are integrated with concept of Black-Scholes option pricing theory, and applied in option valuation for solar energy investment with uncertainty. The numerical results of L3CM, finite difference and Monte Carlo methods are compared to show the efficiency of our methods. Our data set refers to the Arab Republic of Egypt.
منابع مشابه
Economic Appraisal of Investment Projects in Solar Energy under Uncertainty via Fuzzy Real Option Approach (Case Study: a 2-MW Photovoltaic Plant in South of Isfahan, Iran)
Investment in renewable energies especially solar energies is encountered with numerous uncertainties considering the increased dynamism in economic and financial conditions and makes investment in this field irreversible to a large extent, paying attention to modern methods of economic appraisal of such investments is highly important. A framework is provided in the current study in order to e...
متن کاملEconomic Appraisal of Solar Energy Projects under Uncertainty using a Fuzzy Real OptionApproach(Case Study: A 2MW Photovoltaic Plant in the South of Isfahan)
Investment in renewable energies especially solar energies encounters numerous uncertainties considering the increased dynamism in economic and financial conditions. It is thus important to use modern methods of economic appraisal for such investments. Our study provides a framework for use of the real option theory for economic appraisal of a 2MW photovoltaic plant in Isfahan province (as a ca...
متن کاملHierarchy Style Application in Line Extension with Responsive Loads Evaluating the Dynamic Nature of Solar Units
This paper presents a model for line extension scheduled to participate in responsive loads in the power system aiming the improvement of techno-economical parameters. The model is studied with the presence of photovoltaic generators that produce variable power depending on the geographical condition. The investment cost of the transmission expansion plan, demand response operation cost, genera...
متن کاملHierarchical Analysis Method Application in Prioritization of Power Plant with Renewable Energy in Iran-case study
With regard to the importance of scientific decision-making in power plants prioritization to produce electrical energy (power) from renewable energies (purified), in this paper, research with specialists opinions with respond to questionnaires provided upon three efficient operational criterion in position of three presented power plant in country which used wind, solar water energies for prod...
متن کاملCost-effective design of ringwall storage hybrid power plants: A real options analysis ¬リニ
We study the economic viability and optimal sizing and siting of a hybrid plant that combines a ringwall hydro storage system with wind and solar power plants (ringwall storage hybrid power plant, RSHPP). A real options model is introduced to analyze the economics of an onshore RSHPP, and in particular of the varying storage volume in light of the stochastic character of wind and solar power, a...
متن کامل