Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption

Joana Fialho; Pedro Pinto; Ana Lúcia Gomes

doi:doi:10.11648/j.ijepe.20180705.12

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Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption

Joana Fialho, Pedro Pinto, Ana Lúcia Gomes

Published in International Journal of Energy and Power Engineering (Volume 7, Issue 5)

Received: 17 October 2018 Accepted: 1 November 2018 Published: 14 December 2018

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Abstract

The use of renewable sources to produce energy is good for the planet and has economic value, that is, investing in the produce of green energy can be economically viable. This paper aims to conduct an evaluation, using real options tools, of a photovoltaic (PV) system, for self-consumption, at the Campus of Polytechnic Institute of Viseu, Portugal. A PV system produces electricity from sun and its investment can be viable, particularly in sunny countries like Portugal. This viability comes from the rapid recovery of the investment, since the energy produced is no longer bought to the electrical network. The utilization of real options, in this study, namely the decision trees, allows integrating uncertainty sources and operational flexibility. In this work, we considered the price of electricity tariff and the value of the initial investment as uncertain values. The operational flexibility is integrated by considering the options “invest”, “defer” and “not invest” in the PV system, for self-consumption. The results suggest that the Polytechnic Institute of Viseu should invest in a PV system, for self-consumption. The use of solar energy, especially in countries with high sun expose, such as Portugal, is economically viable.

Published in	International Journal of Energy and Power Engineering (Volume 7, Issue 5)
DOI	10.11648/j.ijepe.20180705.12
Page(s)	59-65
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Real Options, Decision Trees, Photovoltaic System, Self-consumption, Energetic Sustainability

References

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APA Style

Joana Fialho, Pedro Pinto, Ana Lúcia Gomes. (2018). Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption. International Journal of Energy and Power Engineering, 7(5), 59-65. https://doi.org/10.11648/j.ijepe.20180705.12

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ACS Style

Joana Fialho; Pedro Pinto; Ana Lúcia Gomes. Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption. Int. J. Energy Power Eng. 2018, 7(5), 59-65. doi: 10.11648/j.ijepe.20180705.12

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AMA Style

Joana Fialho, Pedro Pinto, Ana Lúcia Gomes. Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption. Int J Energy Power Eng. 2018;7(5):59-65. doi: 10.11648/j.ijepe.20180705.12

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@article{10.11648/j.ijepe.20180705.12,
  author = {Joana Fialho and Pedro Pinto and Ana Lúcia Gomes},
  title = {Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption},
  journal = {International Journal of Energy and Power Engineering},
  volume = {7},
  number = {5},
  pages = {59-65},
  doi = {10.11648/j.ijepe.20180705.12},
  url = {https://doi.org/10.11648/j.ijepe.20180705.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijepe.20180705.12},
  abstract = {The use of renewable sources to produce energy is good for the planet and has economic value, that is, investing in the produce of green energy can be economically viable. This paper aims to conduct an evaluation, using real options tools, of a photovoltaic (PV) system, for self-consumption, at the Campus of Polytechnic Institute of Viseu, Portugal. A PV system produces electricity from sun and its investment can be viable, particularly in sunny countries like Portugal. This viability comes from the rapid recovery of the investment, since the energy produced is no longer bought to the electrical network. The utilization of real options, in this study, namely the decision trees, allows integrating uncertainty sources and operational flexibility. In this work, we considered the price of electricity tariff and the value of the initial investment as uncertain values. The operational flexibility is integrated by considering the options “invest”, “defer” and “not invest” in the PV system, for self-consumption. The results suggest that the Polytechnic Institute of Viseu should invest in a PV system, for self-consumption. The use of solar energy, especially in countries with high sun expose, such as Portugal, is economically viable.},
 year = {2018}
}

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TY  - JOUR
T1  - Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption
AU  - Joana Fialho
AU  - Pedro Pinto
AU  - Ana Lúcia Gomes
Y1  - 2018/12/14
PY  - 2018
N1  - https://doi.org/10.11648/j.ijepe.20180705.12
DO  - 10.11648/j.ijepe.20180705.12
T2  - International Journal of Energy and Power Engineering
JF  - International Journal of Energy and Power Engineering
JO  - International Journal of Energy and Power Engineering
SP  - 59
EP  - 65
PB  - Science Publishing Group
SN  - 2326-960X
UR  - https://doi.org/10.11648/j.ijepe.20180705.12
AB  - The use of renewable sources to produce energy is good for the planet and has economic value, that is, investing in the produce of green energy can be economically viable. This paper aims to conduct an evaluation, using real options tools, of a photovoltaic (PV) system, for self-consumption, at the Campus of Polytechnic Institute of Viseu, Portugal. A PV system produces electricity from sun and its investment can be viable, particularly in sunny countries like Portugal. This viability comes from the rapid recovery of the investment, since the energy produced is no longer bought to the electrical network. The utilization of real options, in this study, namely the decision trees, allows integrating uncertainty sources and operational flexibility. In this work, we considered the price of electricity tariff and the value of the initial investment as uncertain values. The operational flexibility is integrated by considering the options “invest”, “defer” and “not invest” in the PV system, for self-consumption. The results suggest that the Polytechnic Institute of Viseu should invest in a PV system, for self-consumption. The use of solar energy, especially in countries with high sun expose, such as Portugal, is economically viable.
VL  - 7
IS  - 5
ER  -

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Author Information

Joana Fialho

Center for Studies in Education, Technologies and Health, Polytechnic Institute of Viseu, Viseu, Portugal
Pedro Pinto

Center for Studies in Education, Technologies and Health, Polytechnic Institute of Viseu, Viseu, Portugal
Ana Lúcia Gomes

Center for Studies in Education, Technologies and Health, Polytechnic Institute of Viseu, Viseu, Portugal

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Plain Text BibTeX RIS

APA Style

Joana Fialho, Pedro Pinto, Ana Lúcia Gomes. (2018). Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption. International Journal of Energy and Power Engineering, 7(5), 59-65. https://doi.org/10.11648/j.ijepe.20180705.12

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ACS Style

Joana Fialho; Pedro Pinto; Ana Lúcia Gomes. Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption. Int. J. Energy Power Eng. 2018, 7(5), 59-65. doi: 10.11648/j.ijepe.20180705.12

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AMA Style

Joana Fialho, Pedro Pinto, Ana Lúcia Gomes. Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption. Int J Energy Power Eng. 2018;7(5):59-65. doi: 10.11648/j.ijepe.20180705.12

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@article{10.11648/j.ijepe.20180705.12,
  author = {Joana Fialho and Pedro Pinto and Ana Lúcia Gomes},
  title = {Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption},
  journal = {International Journal of Energy and Power Engineering},
  volume = {7},
  number = {5},
  pages = {59-65},
  doi = {10.11648/j.ijepe.20180705.12},
  url = {https://doi.org/10.11648/j.ijepe.20180705.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijepe.20180705.12},
  abstract = {The use of renewable sources to produce energy is good for the planet and has economic value, that is, investing in the produce of green energy can be economically viable. This paper aims to conduct an evaluation, using real options tools, of a photovoltaic (PV) system, for self-consumption, at the Campus of Polytechnic Institute of Viseu, Portugal. A PV system produces electricity from sun and its investment can be viable, particularly in sunny countries like Portugal. This viability comes from the rapid recovery of the investment, since the energy produced is no longer bought to the electrical network. The utilization of real options, in this study, namely the decision trees, allows integrating uncertainty sources and operational flexibility. In this work, we considered the price of electricity tariff and the value of the initial investment as uncertain values. The operational flexibility is integrated by considering the options “invest”, “defer” and “not invest” in the PV system, for self-consumption. The results suggest that the Polytechnic Institute of Viseu should invest in a PV system, for self-consumption. The use of solar energy, especially in countries with high sun expose, such as Portugal, is economically viable.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - Real Options: An Evaluation Tool for a Photovoltaic System for Self-consumption
AU  - Joana Fialho
AU  - Pedro Pinto
AU  - Ana Lúcia Gomes
Y1  - 2018/12/14
PY  - 2018
N1  - https://doi.org/10.11648/j.ijepe.20180705.12
DO  - 10.11648/j.ijepe.20180705.12
T2  - International Journal of Energy and Power Engineering
JF  - International Journal of Energy and Power Engineering
JO  - International Journal of Energy and Power Engineering
SP  - 59
EP  - 65
PB  - Science Publishing Group
SN  - 2326-960X
UR  - https://doi.org/10.11648/j.ijepe.20180705.12
AB  - The use of renewable sources to produce energy is good for the planet and has economic value, that is, investing in the produce of green energy can be economically viable. This paper aims to conduct an evaluation, using real options tools, of a photovoltaic (PV) system, for self-consumption, at the Campus of Polytechnic Institute of Viseu, Portugal. A PV system produces electricity from sun and its investment can be viable, particularly in sunny countries like Portugal. This viability comes from the rapid recovery of the investment, since the energy produced is no longer bought to the electrical network. The utilization of real options, in this study, namely the decision trees, allows integrating uncertainty sources and operational flexibility. In this work, we considered the price of electricity tariff and the value of the initial investment as uncertain values. The operational flexibility is integrated by considering the options “invest”, “defer” and “not invest” in the PV system, for self-consumption. The results suggest that the Polytechnic Institute of Viseu should invest in a PV system, for self-consumption. The use of solar energy, especially in countries with high sun expose, such as Portugal, is economically viable.
VL  - 7
IS  - 5
ER  -

Copy | Download