پروژه ارزیابی منابع انرژی تجدیدپذیر تحت عدم قطعیت: مورد بهره برداری انرژی بادی در یک محیط بازار انرژی در حال تغییر

There are four elements, which contribute to the oncoming increase of electricity demand: climate changes, the expected growth rates of EU Member State economies, changes in the consumption patterns and the introduction of new technologies. The new deregulated Electricity Market is expected to respond to this challenge and the energy supply will be adequate and cost effective within this new environment which offers promising opportunities for power producers both existing and newcomers. In this paper a framework for the appraisal of power projects under uncertainty within a competitive market environment is identified, focusing on the electricity from Renewable Energy Sources. To this end the wind energy-to-electricity production in Greece will serve as a case study. The subject matter is centred on the following areas: • the uncertainties within the new deregulated energy market; • the evaluation methods including an analysis of the introduced uncertainties after deregulation and a new approach to project evaluation using the real options, as well as comparison of the valuation methodologies within the new environment drawing from the case for Greece.

The transition from a highly regulated industry to a competitive environment calls for the re-adjustment of appraisal methods for new investments in order to take proper account of the introduced uncertainties.1 Uncertainty creates financial opportunities. It is important to determine the degree of exposure of our investment (how external events translate into profits and losses) and then respond by positioning this investment to best take advantage of uncertainty (Amram and Kulatilaka, 1999). Companies should alter their investment strategy and add the value of these inherent uncertainties to their project evaluation. Traditional discounted cash flow (DCF) approaches can neither properly deal with unexpected market developments nor allow for management's flexibility to adapt and revise later decisions in response to them. A company's adaptability to changes in market conditions can expand the value of an investment opportunity by improving its upside potential. Additionally, this will limit downside losses relative to the company's initial expectations under “passive” management. The resulting asymmetry caused by managerial adaptability calls for an “expanded net present value” rule reflecting both of the value components below: • the traditional (classical, static or passive) net present value (NPV) of direct cash flows (CFs), • the option value of operating and strategic adaptability/flexibility. This does not make traditional NPV redundant, which should now be seen as a crucial and necessary input to an option-based expanded NPV analysis (Trigeorgis, 1993): View the MathML source Table 1 summarises the most important uncertainties related to energy production—utilisation and the attributes, which interact with them (Kaslow and Pindyck, 1994).

Greece is a country endowed with a large Renewable Energy potential, especially from wind and solar energy. The Electricity Market deregulation (effective date February 19, 2001) has opened up new possibilities. Given that nowadays competition is the driving force and considerable opportunities are expected to emerge, the Electricity Market can operate effectively without government intervention. Within this new environment, investment opportunities should be assessed in a different perspective. In this study, we have tried to develop a framework for the assessment of WE projects, taking into consideration the new deregulated, competitive and highly uncertain environment. The purpose of this framework is twofold: • to provide a comprehensive, dynamic and simple to use methodology, • to quantify the option value inherent in an investment opportunity for both enhancing the upside potential (e.g. through the option to defer or expand), as well as for reducing downside risk (e.g. through the options to abandon). The reason we have tried to keep things simple is that, although the theoretical background of option valuation is highly technical, its implementation is directed at people involved in the assessment of such projects who need to have a clear understanding of the approach leading to the derivation of the “Expanded NPV value”. The DCF analysis takes a static view of a project ignoring the ability of management to adapt in response to unanticipated market developments and tends to devalue strategic reasons for investment that do not produce clear and quantifiable CFs. To evaluate strategic decision properly, a dynamic approach that recognises the role of active management must be utilised. In our case study the use of the DCF method (NPV) has shown that the WE project should not be developed. For extending our assessment we have employed the ROs approach because it incorporates a great amount of flexibility that has to be valued. The future operating outcomes of a WE project can actually be influenced by future decisions depending on the inherent operating options. The result is that since we have identified the dynamic aspects of a WE project using the RO approach, we are able to combine the quantitative assessment derived from the DCF analysis with the assessment derived from the managerial flexibility and the uncertainty resolution Therefore, the proposed option based valuation and the DCF methods are complementary approaches. The ROs perspective views Modularity as the creation of a sequence of options. It deals with the uncertainty of the investment and it has the potential to serve as a strategic tool as well. The most significant aspect is that we can assign a value to our strategy and therefore conclude whether an investment opportunity has the potential to be profitable. To sum up, the main points to consider for using this assessment methodology are the following: • Uncertainty increases the value of an option. • Options create value but may be expensive. • We need to start making a simple approach, then identify all the options and build on the initial simple framework. It is more safe to deal with the framework instead of searching for details within a dynamic environment. • The ability to identify the correct time in exercising the option is of fundamental importance.