Time-dependent opportunities in energy business : a comparative study of locally available renewable and conventional fuels
Tolis, Athanasios I. and Rentizelas, Athanasios A. and Tatsiopoulos, Ilias P. (2010) Time-dependent opportunities in energy business : a comparative study of locally available renewable and conventional fuels. Renewable and Sustainable Energy Reviews, 14 (1). pp. 384-393. ISSN 1879-0690 (https://doi.org/10.1016/j.rser.2009.07.027)
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Abstract
This work investigates and compares energy-related, private business strategies, potentially interesting for investors willing to exploit either local biomass sources or strategic conventional fuels. Two distinct fuels and related power-production technologies are compared as a case study, in terms of economic efficiency: the biomass of cotton stalks and the natural gas. The carbon capture and storage option are also investigated for power plants based on both fuel types. The model used in this study investigates important economic aspects using a "real options" method instead of traditional Discounted Cash Flow techniques, as it might handle in a more effective way the problems arising from the stochastic nature of significant cash flow contributors' evolution like electricity, fuel and CO(2) allowance prices. The capital costs have also a functional relationship with time, thus providing an additional reason for implementing, "real options" as well as the learning-curves technique. The methodology as well as the results presented in this work, may lead to interesting conclusions and affect potential private investment strategies and future decision making. This study indicates that both technologies lead to positive investment yields, with the natural gas being more profitable for the case study examined, while the carbon capture and storage does not seem to be cost efficient with the current CO(2) allowance prices. Furthermore, low interest rates might encourage potential investors to wait before actualising their business plans while higher interest rates favor immediate investment decisions. (C) 2009 Elsevier Ltd. All rights reserved.
ORCID iDs
Tolis, Athanasios I., Rentizelas, Athanasios A. ORCID: https://orcid.org/0000-0002-5110-2467 and Tatsiopoulos, Ilias P.;-
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Item type: Article ID code: 44924 Dates: DateEventJanuary 2010PublishedSubjects: Technology > Engineering (General). Civil engineering (General) > Engineering design Department: Faculty of Engineering > Design, Manufacture and Engineering Management Depositing user: Pure Administrator Date deposited: 19 Sep 2013 11:12 Last modified: 19 Oct 2024 00:17 URI: https://strathprints.strath.ac.uk/id/eprint/44924