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Research on Investment Decision making for Flexibility Transformation of Thermal Power Units Based on Fuzzy Real Options

In: Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)

Author

Listed:
  • Runsheng Ma

    (State Grid Qinghai Electric Power Research Institute)

  • Zhengwei Wang

    (State Grid Qinghai Electric Power Research Institute)

  • Shengyun Ju

    (State Grid Qinghai Electric Power Research Institute)

  • Wenjie Zhu

    (North China Electric Power University (Baoding), Department of Economic Management)

  • Zijin Jiao

    (North China Electric Power University (Baoding), Department of Economic Management)

  • Jialin Wu

    (North China Electric Power University (Baoding), Department of Economic Management)

Abstract

The flexibility transformation of thermal power units is of great significance in regulation, and thus it is crucial to study its economic evaluation. Traditional investment decision-making methods often neglect the uncertainty factors that are difficult to precisely quantify during the evaluation process. This paper puts forward a method based on trapezoidal fuzzy numbers and variable risk-free interest rates, and utilizes an improved B - S option pricing model to enhance its economic evaluation. By introducing trapezoidal fuzzy numbers to deal with uncertainty factors, the model’s capacity to handle uncertainty in investment decisions is theoretically enhanced. Through the experiment on the flexibility transformation of thermal power units, the results indicate that this method demonstrates remarkable superiority in terms of the accuracy and reliability of economic evaluation, with an improved performance compared to traditional methods, thereby providing a new perspective and approach for economic evaluation.

Suggested Citation

  • Runsheng Ma & Zhengwei Wang & Shengyun Ju & Wenjie Zhu & Zijin Jiao & Jialin Wu, 2025. "Research on Investment Decision making for Flexibility Transformation of Thermal Power Units Based on Fuzzy Real Options," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin & Tomoki Fujii & Xiaodong Lai & Azlina Binti Md Yassin (ed.), Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025), pages 523-533, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-702-1_55
    DOI: 10.2991/978-94-6463-702-1_55
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