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Evaluation of Photovoltaic Energy Projects using the Real Options Valuation

Author

Listed:
  • Hugo Hernandez Palma

    (Universidad del Atl ntico, Barranquilla, Colombia.)

  • Kennedy Hurtado Ibarra

    (Universidad del Atl ntico, Barranquilla, Colombia.)

Abstract

The purpose of the article is to analyze from a current perspective how Real Options Valuation facilitate the evaluation of projects for the adoption of photovoltaic energy in countries such as Colombia. A mixed descriptive approach is proposed, using techniques of documentary analysis and analysis of figures. To this end, an exhaustive review of recent research on energy, project evaluation and the method of real options is carried out. As part of the results, it is highlighted that the real options method allows a greater projection of the economic/financial evaluations and also proposes lines of action thus responding to new demands of the energy markets. Due to the characteristics of the activities of the theme, real options are gaining ground in the economic/financial evaluation of projects, since until recently only traditional methods were considered for this purpose.

Suggested Citation

  • Hugo Hernandez Palma & Kennedy Hurtado Ibarra, 2020. "Evaluation of Photovoltaic Energy Projects using the Real Options Valuation," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 256-265.
    • Handle: RePEc:eco:journ2:2020-06-34
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    References listed on IDEAS

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    1. Bhandari, Binayak & Lee, Kyung-Tae & Lee, Caroline Sunyong & Song, Chul-Ki & Maskey, Ramesh K. & Ahn, Sung-Hoon, 2014. "A novel off-grid hybrid power system comprised of solar photovoltaic, wind, and hydro energy sources," Applied Energy, Elsevier, vol. 133(C), pages 236-242.
    2. Hosenuzzaman, M. & Rahim, N.A. & Selvaraj, J. & Hasanuzzaman, M. & Malek, A.B.M.A. & Nahar, A., 2015. "Global prospects, progress, policies, and environmental impact of solar photovoltaic power generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 284-297.
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    Cited by:

    1. Grzegorz Zimon & Dominik Zimon, 2020. "The Impact of Purchasing Group on the Profitability of Companies Operating in the Renewable Energy Sector—The Case of Poland," Energies, MDPI, vol. 13(24), pages 1-15, December.
    2. Grzegorz Lew & Beata Sadowska & Katarzyna Chudy-Laskowska & Grzegorz Zimon & Magdalena Wójcik-Jurkiewicz, 2021. "Influence of Photovoltaic Development on Decarbonization of Power Generation—Example of Poland," Energies, MDPI, vol. 14(22), pages 1-20, November.

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    More about this item

    Keywords

    Renewable Energy; Photovoltaic Energy; Real Options Method; Feasibility.;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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