Renewable energy policy evaluation using real option model. The case of Taiwan
Creators
- 1. Department of Resources Engineering, National Cheng Kung University, Tainan (China)
Description
This study presents a policy benefit evaluation model that integrates cost efficiency curve information on renewable power generation technologies into real options analysis (ROA) methods. The proposed model evaluates quantitatively the policy value provided by developing renewable energy (RE) in the face of uncertain fossil fuel prices and RE policy-related factors. The economic intuition underlying the policy-making process is elucidated, while empirical analysis illustrates the option value embedded in the current development policy in Taiwan for wind power. In addition to revealing the benefits that RE development provides when considering real options, analytical results indicate that ROA is a highly effective means of quantifying how policy planning uncertainty including managerial flexibility influences RE development. In addition to assessing the policy value of current RE development policy, this study also compares policy values in terms of internalized external costs and varying feed-in tariff (FIT). Simulation results demonstrate that the RE development policy with internalized CO2 emission costs is appropriate policy planning from sustainability point of view. Furthermore, relationship between varying FIT and policy values can be shown quantitatively and appropriate FIT level could be determined accordingly. (author)
Availability note (English)
Available from Available from: http://dx.doi.org/10.1016/j.eneco.2010.04.010Additional details
Identifiers
Publishing Information
- Journal Title
- Energy Economics
- Journal Volume
- 32
- Journal Issue
- Suppl.1
- Journal Page Range
- p. S67-S78
- ISSN
- 0140-9883
- CODEN
- EECODR
INIS
- Country of Publication
- United Kingdom
- Country of Input or Organization
- United Kingdom
- INIS RN
- 42005079
- Subject category
- ENERGY PLANNING, POLICY AND ECONOMY;
- Quality check status
- Yes
- Descriptors DEI
- CARBON DIOXIDE; COMPARATIVE EVALUATIONS; EMISSION; ENERGY EFFICIENCY; ENERGY POLICY; EXTERNAL COST; PLANNING; POWER GENERATION; PRICES; SIMULATION; TAIWAN; TARIFFS; WIND POWER;
- Descriptors DEC
- ASIA; CARBON COMPOUNDS; CARBON OXIDES; CHALCOGENIDES; CHINA; COST; EFFICIENCY; ENERGY SOURCES; EVALUATION; GOVERNMENT POLICIES; ISLANDS; OXIDES; OXYGEN COMPOUNDS; POWER; RENEWABLE ENERGY SOURCES;
Optional Information
- Notes
- Elsevier Ltd. All rights reserved; Special issue on Asian energy in the context of growing security and environmental concerns