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Valuation for renewable energy: A comparative review

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  • Menegaki, Angeliki
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    Abstract

    Environmental cost-benefit analysis is applied for the evaluation of renewable energy projects. Since some benefits and costs do not have monetary values, economic valuation techniques are applied to estimate them. This paper reviews the literature on the valuation/evaluation of renewable energy resources and summarizes the methods used in them. It discerns four main streams of valuation in renewable energy. The first is economic, welfare oriented and comprises stated and revealed preference methods; the second is the financial option analysis with a financial background; the third is emergy analysis, which is mostly an ecological engineering-based method with capable economic links, and the fourth is again economic but not welfare based. The paper discusses the main directions discerned in these studies and recognizes first that proper valuation takes place only in the first method while the other methods describe only evaluation procedures and second that there is a research gap that has yet to be filled in as compared to other areas of environmental, resource and energy economics.

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    Bibliographic Info

    Article provided by Elsevier in its journal Renewable and Sustainable Energy Reviews.

    Volume (Year): 12 (2008)
    Issue (Month): 9 (December)
    Pages: 2422-2437

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    Handle: RePEc:eee:rensus:v:12:y:2008:i:9:p:2422-2437

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    Keywords: Cost-benefit analysis Emergy analysis Real option Revealed preference Stated preference;

    References

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    Citations

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    Cited by:
    1. Grösche, Peter & Schröder, Carsten, 2011. "Eliciting public support for greening the electricity mix using random parameter techniques," Energy Economics, Elsevier, vol. 33(2), pages 363-370, March.
    2. Meyerhoff, Jürgen & Ohl, Cornelia & Hartje, Volkmar, 2010. "Landscape externalities from onshore wind power," Energy Policy, Elsevier, vol. 38(1), pages 82-92, January.
    3. Yang, Jin & Chen, Bin, 2013. "Integrated evaluation of embodied energy, greenhouse gas emission and economic performance of a typical wind farm in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 559-568.
    4. Dombi, Mihály & Kuti, István & Balogh, Péter, 2014. "Sustainability assessment of renewable power and heat generation technologies," Energy Policy, Elsevier, vol. 67(C), pages 264-271.
    5. Huang, Shih-Chieh & Lo, Shang-Lien & Lin, Yen-Ching, 2013. "Application of a fuzzy cognitive map based on a structural equation model for the identification of limitations to the development of wind power," Energy Policy, Elsevier, vol. 63(C), pages 851-861.
    6. Giannetti, B.F. & Ogura, Y. & Bonilla, S.H. & Almeida, C.M.V.B., 2011. "Emergy assessment of a coffee farm in Brazilian Cerrado considering in a broad form the environmental services, negative externalities and fair price," Agricultural Systems, Elsevier, vol. 104(9), pages 679-688.
    7. Gonçalves, F.V. & Costa, L.H. & Ramos, H.M., 2011. "Best economical hybrid energy solution: Model development and case study of a WDS in Portugal," Energy Policy, Elsevier, vol. 39(6), pages 3361-3369, June.
    8. Liu, Hongtao & Polenske, Karen R. & Xi, Youmin & Guo, Ju'e, 2010. "Comprehensive evaluation of effects of straw-based electricity generation: A Chinese case," Energy Policy, Elsevier, vol. 38(10), pages 6153-6160, October.
    9. Ohler, Adrienne M., 2014. "Behavior of the firm under rate-of-return regulation with two capital inputs," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 61-69.
    10. Chen, Shaoqing & Chen, Bin, 2012. "Sustainability and future alternatives of biogas-linked agrosystem (BLAS) in China: An emergy synthesis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3948-3959.
    11. Fernandes, Bartolomeu & Cunha, Jorge & Ferreira, Paula, 2011. "The use of real options approach in energy sector investments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4491-4497.
    12. Ladenburg, Jacob & Lutzeyer, Sanja, 2012. "The economics of visual disamenity reductions of offshore wind farms—Review and suggestions from an emerging field," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6793-6802.
    13. Oikonomou, Emmanouil K. & Kilias, Vassilios & Goumas, Aggelos & Rigopoulos, Alexandrous & Karakatsani, Eirini & Damasiotis, Markos & Papastefanakis, Dimitrios & Marini, Natassa, 2009. "Renewable energy sources (RES) projects and their barriers on a regional scale: The case study of wind parks in the Dodecanese islands, Greece," Energy Policy, Elsevier, vol. 37(11), pages 4874-4883, November.
    14. Pattara, C. & Cappelletti, G.M. & Cichelli, A., 2010. "Recovery and use of olive stones: Commodity, environmental and economic assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(5), pages 1484-1489, June.
    15. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 110-121.
    16. Ku, Se-Ju & Yoo, Seung-Hoon, 2010. "Willingness to pay for renewable energy investment in Korea: A choice experiment study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(8), pages 2196-2201, October.

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