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Real options theory applied to electricity generation projects: A review

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  • Martínez Ceseña, E.A.
  • Mutale, J.
  • Rivas-Dávalos, F.

Abstract

Real options (RO) theory is well known for enhancing the value of projects under uncertainty. This is achieved by modelling the flexibility that managers possess to adjust the projects in response to changes in their environments. Based on this, RO theory could be used to tackle current energy and environmental issues by enhancing the value of electricity generation projects (EGP), especially renewable energy projects (REP).

Suggested Citation

  • Martínez Ceseña, E.A. & Mutale, J. & Rivas-Dávalos, F., 2013. "Real options theory applied to electricity generation projects: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 573-581.
    • Handle: RePEc:eee:rensus:v:19:y:2013:i:c:p:573-581
    DOI: 10.1016/j.rser.2012.11.059
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    References listed on IDEAS

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