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A real option assessment of flexibilities in the integrated planning of natural gas distribution network and distributed natural gas-fired power generations

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  • Odetayo, Babatunde
  • MacCormack, John
  • Rosehart, W.D.
  • Zareipour, Hamidreza

Abstract

There is an increasing integration of distributed natural gas-fired electric power generations across the globe. The natural gas-fired power generators are dependent on the availability of reliable natural gas distribution systems. This interdependency coupled with the scalability of the natural gas-fired distributed power generators presents the management of an energy utility with real options to execute, delay or abandon long-term expansion plans based on new realities of electric power demand. A real options analysis of these flexibilities is carried out in this paper. The assessment of these options includes the identification and valuation of the identified options. The value of flexibilities and options is illustrated by assessing the options to implement, delay or abandon expansion plans in the presence of uncertain electric power demand on 9 and 33 bus electricity distribution systems.

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  • Odetayo, Babatunde & MacCormack, John & Rosehart, W.D. & Zareipour, Hamidreza, 2018. "A real option assessment of flexibilities in the integrated planning of natural gas distribution network and distributed natural gas-fired power generations," Energy, Elsevier, vol. 143(C), pages 257-272.
    • Handle: RePEc:eee:energy:v:143:y:2018:i:c:p:257-272
    DOI: 10.1016/j.energy.2017.10.114
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    References listed on IDEAS

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    Cited by:

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    3. Yamchi, Hamid Bakhshi & Safari, Amin & Guerrero, Josep M., 2021. "A multi-objective mixed integer linear programming model for integrated electricity-gas network expansion planning considering the impact of photovoltaic generation," Energy, Elsevier, vol. 222(C).
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    5. Liu, Yuanxin & Zheng, Ruijin & Chen, Sisi & Yuan, Jiahai, 2019. "The economy of wind-integrated-energy-storage projects in China's upcoming power market: A real options approach," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
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    7. Daniel Then & Christian Spalthoff & Johannes Bauer & Tanja M. Kneiske & Martin Braun, 2020. "Impact of Natural Gas Distribution Network Structure and Operator Strategies on Grid Economy in Face of Decreasing Demand," Energies, MDPI, vol. 13(3), pages 1-33, February.
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