Risk adjusted financial costs of photovoltaics
AbstractRecent research shows significant differences in the levelised photovoltaics (PV) electricity cost calculations. The present paper points out that no unique or absolute cost figure can be justified, the correct solution is to use a range of cost figures that is determined in a dynamic power portfolio interaction within the financial scheme, support mechanism and industry cost reduction. The paper draws attention to the increasing role of financial investors in the PV segment of the renewable energy market and the importance they attribute to the risks of all options in the power generation portfolio. Based on these trends, a former version of a financing model is adapted to project the energy mix changes in the EU electricity market due to investors behaviour with different risk tolerance/aversion. The dynamic process of translating these risks into the return expectation in the financial appraisal and investment decision making is also introduced. By doing so, the paper sets up a potential electricity market trend with the associated risk perception and classification. The necessary risk mitigation tasks for all stakeholders in the PV market are summarised which aims to avoid the burden of excessive risk premiums in this market segment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 38 (2010)
Issue (Month): 7 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/enpol
Financing Renewable energy Economic analysis;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McDonald, Alan & Schrattenholzer, Leo, 2001. "Learning rates for energy technologies," Energy Policy, Elsevier, vol. 29(4), pages 255-261, March.
- Gritsevskyi, Andrii & Nakicenovi, Nebojsa, 2000. "Modeling uncertainty of induced technological change," Energy Policy, Elsevier, vol. 28(13), pages 907-921, November.
- Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
- Awerbuch, Shimon, 2000. "Investing in photovoltaics: risk, accounting and the value of new technology," Energy Policy, Elsevier, vol. 28(14), pages 1023-1035, November.
- Ibenholt, Karin, 2002. "Explaining learning curves for wind power," Energy Policy, Elsevier, vol. 30(13), pages 1181-1189, October.
- Hal Varian, 1993. "A Portfolio of Nobel Laureates: Markowitz, Miller and Sharpe," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 159-169, Winter.
- Kahouli-Brahmi, Sondes, 2008. "Technological learning in energy-environment-economy modelling: A survey," Energy Policy, Elsevier, vol. 36(1), pages 138-162, January.
- Szabó, Sándor & Jäger-Waldau, Arnulf, 2008. "More competition: Threat or chance for financing renewable electricity?," Energy Policy, Elsevier, vol. 36(4), pages 1436-1447, April.
- Venetsanos, Konstantinos & Angelopoulou, Penelope & Tsoutsos, Theocharis, 2002. "Renewable energy sources project appraisal under uncertainty: the case of wind energy exploitation within a changing energy market environment," Energy Policy, Elsevier, vol. 30(4), pages 293-307, March.
- Nemet, Gregory F., 2006. "Beyond the learning curve: factors influencing cost reductions in photovoltaics," Energy Policy, Elsevier, vol. 34(17), pages 3218-3232, November.
- Neij, Lena, 1997. "Use of experience curves to analyse the prospects for diffusion and adoption of renewable energy technology," Energy Policy, Elsevier, vol. 25(13), pages 1099-1107, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.