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Décisions d'investissement et de démantèlement sous incertitude : une application au secteur électrique

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  • Corinne Chaton

Abstract

The purpose of this study is to use real options theory to answer the following question: Is it necessary, in France, to invest in new nuclear power units or should some of the existing units be decommissioned? The theoretical model developed establishes two price thresholds which determine investment or decommissioning rules for a regulated risk-neutral firm which does not know the future price of its input. It also provides an empirical reading of past choices in construction of French nuclear power plants. The main finding is that, on a certain number of theoretical and empirical assumptions, it is optimal at present is to leave French nuclear power capacity unchanged. Other more general findings follow from the theoretical model. Thus an increase in uncertainty facilitates investment, defers decommissioning and extends the range of input prices for which there is no change in capacity.

Suggested Citation

  • Corinne Chaton, 2001. "Décisions d'investissement et de démantèlement sous incertitude : une application au secteur électrique," Economie & Prévision, La Documentation Française, vol. 149(3), pages 15-28.
    • Handle: RePEc:cai:ecoldc:ecop_149_0015
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    References listed on IDEAS

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    Cited by:

    1. Saphores, Jean-Daniel & Gravel, Éric & Bernard, Jean-Thomas, 2003. "Environmental Impact Assessment and Investment under Uncertainty. An Application to Power Grid Interconnection," Cahiers de recherche 0303, Université Laval - Département d'économique.
    2. Ngongang, Elie, 2011. "Impact of Exchange Rate Policy on the Trade of Industrial Products in Sub-Saharan Africa from 1975 to 2007," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 7(1-2), pages 1-27, March.
    3. Ngongang, Elie, 2012. "Econometric Analysis of the Impact of Financial Variables on Investment Behavior in Sub-Saharan African (SSA) Countries," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 8(1), pages 1-22, May.

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    More about this item

    Keywords

    investment; partial irreversibility; uncertainty; inelasticity; options;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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