Evaluating The Investment Of Renewable Energy Power Generation Project Based On Real Options Method

With the increase of fossil energy consumption such as oil and coal,as well as the energy conservation and environmental issues,green development and emission reduction have become the world's economic development strategy.In contrast with traditional energy,renewable energy,which has the characteristics of less pollution,large reserves,broad distributions and renewability,has important significance for solving energy shortage,climate change and environmental problem.The development of renewable energy power generation has become an important way to cope with global climate change,achieve sustainable and low carbon development.For the market of renewable energy power generation with urgent need to be developed,it is essential to form a continuous whole new energy power generation project investment evaluation and decision analysis framework,carry on empirical analyses on the investment in China's renewable energy power generation project and further put forward a set of strategies and suggestions on maintaining and promoting the benign development by focusing on uncertain factors influence,scientific processing management flexibility in decision making,considering the characteristics of renewable energy power generation projects and comprehensively using the real option method.These not only have important theoretical significance,but also have important practical significance.In this paper,given the difference of investment expansion mode,and for the purpose of comparing the difference between real options method and net present value method,the main research work and conclusions are planed as follows:(1)The net present value analysis of the investment in renewable energy power generation project.At first,this part sort out the income and cost of the renewable energy power generation project and then determine the net present value function of renewable energy power generation project.Secondly,this part carries put case analyses on 25 MW solar photovoltaic(PV)power generation project and biomass power generation project.The results show some interesting conclusions as follows: At first,with considering the implementation of carbon emission trading scheme,the net present value of the solar PV power generation project and biomass power generation project is negative.Investors should give up investment.When the carbon emission trading scheme is considered,the net present value of the solar PV power generation project and biomass power generation project are also negative.Investors should also give up the investment decision.Second,the implementation of the carbon emissions trading scheme significantly increases the net present value of the project investment,but it is still not enough to make up for the cost of investment.The sensitivity analysis focusing on the unit capacity,feed-in tariff,investment cost the CO2 price further demonstrate that the increase of unit capacity,feed-in tariff and CO2 price may increase the net present value and the increase of investment cost may reduce the net present value.In addition,the trigger point of unit capacity,feed-in tariff,investment cost and CO2 price have also been determined.(2)The evaluation of the investment in new renewable energy power generation project.At first,it is essential to distinguish the situation of investment in new renewable energy power generation project.On the basis of describing uncertain CO2 price,traditional power generation fuel costs,the investment cost and market price,as well as considering the adjustment and exit mechanism of price subsidies,this part build a real options model for evaluating the renewable energy power generation projects investment.Using this model,the feasibility and economy of investment,optimal investment strategy,the effect of various factors on investment,the effectiveness of the relevant policies and the optimal investment trigger points of relevant factors could be explored.This model is respectively applied to analyze a 25 MW solar PV power generation project and biomass power generation project.The derived results are as follows: At first,whether the carbon emission trading scheme is considered,the investment environment is not enough to attract the immediate investment of solar PV power generation project and biomass power generation investment.Second,the implementation of carbon emission trading scheme could improve investment value and advance the optimal investment time.Under carbon emission trading scheme,relevant factors will be more difficult to be influenced.At the same time,the optimal investment time will be more easily advanced and more difficult to be delayed.At last,the trigger points of different factors have also been determined.(3)The evaluation of the transition investment in electric power enterprises towards renewable energy power generation under given object.At first,it is essential to distinguish the situation of the transition investment in electric power enterprises towards renewable energy power generation under given object.On the basis of describing uncertain CO2 price,traditional power generation fuel costs,the investment cost and market price,as well as considering the adjustment and exit mechanism of price subsidies,this part build a real options model for evaluating the transformation investment of renewable energy power generation under given object.The results of this model could reveal the feasibility and economy of transformation investment,the optimal transformation investment,the effects of various factors on investment,the effectiveness of the relevant policies,the optimal investment trigger points of relevant factors and the equilibrium point of project value in two cases.Using this model,this part respectively evaluates the transformation investment of a 100 MW of coal-fired power plants towards solar PV power generation project and biomass power generation project.The results are as follows: At first,whether the carbon emission trading scheme considered,the investors of the coal-fired power generation enterprises should not implement the transformation investment towards solar PV power generation project.When the carbon emission trading scheme is considered,the coal-fired power generation enterprises should implement the immediate investment towards biomass power generation in 2016 in case 2.Second,although the implementation of carbon trading scheme increase the project value,it cannot advance the optimal investment time.Under the carbon emission trading scheme,the optimal transition time is more easily shifted to an earlier year and more difficult to be delayed.Third,the points of relevant factors for triggering transition investment have also been determined.At the same time,the equilibrium points of project for the relevant factors,which reflect the turning points of carbon emission trading scheme's effects on project value,are also determined.(4)The evaluation of transition investment in electric power enterprises towards renewable energy power generation under multiple objectsAt first,it is essential to distinguish the situation of the transition investment in electric power enterprises towards renewable energy power generation under multiple objects.On the basis of describing uncertain CO2 price,traditional power generation fuel costs,the investment cost and market price,as well as considering the adjustment and exit mechanism of price subsidies,this part build a real options model for evaluating the transformation investment of renewable energy power generation under multiple object.The results of this model can show the feasibility and economy of transformation investment,the optimal transformation investment,the effects of various factors on investment,the effectiveness of the relevant policies,the optimal investment trigger points of relevant factors,the equilibrium point of project value in two cases and the transition points of investment types.Using this model,this part respectively evaluates the transformation investment of a 100 MW of coal-fired power plants towards multiple renewable energy types.The results are as follows: At first,whether the carbon emission trading scheme is considered,the investors of coal-fired power generation project should exercise the transition investment towards wind power generation in 2021.Second,although the CO2 price is not enough to attract advance the optimal investment time,the implementation of carbon emission trading scheme may improve the project value and helps promote the transition investment towards renewable energy.Third,the point of triggering transition investment,the equilibrium point of project value for different factors,the conversion point of the transition target have also been determined.