Analysis Of The Real Options In Nuclear Investment Under The Dynamic Influence Of Carbon Market

The important sources of global climate change and environmental pollution are the emissions such as sulfur dioxide and oxycarbide burning from three major traditional fossil fuels. At the present, the demand for electricity in the process of production and living makes fossil energy consumption grow rapidly. The increasing recoverable reserves can not reach to the basic demand of fossil energy. As a new kind of energy, in terms of environment, nuclear power is clean and stable and will not be as same as high carbon fossil energy to produce environmental discharge of pollutants. On the economic front, its initial investment is larger. But due to the low generating cost, nuclear industry has a considerable economic benefit in later stage. As a kind of low carbon energy for clean and stable with economic competitiveness, nuclear power has become the strategy part of related countries in the world to solve the energy supply problem.This paper first introduces the basic theories related to real options,the Black-Scholes model and the general numerical simulation method used in the model solution- the least squares Monte Carlo simulation method. Then we expound the enterprise carbon emissions trading.From the perspective of enterprise investment, we establish model to evaluate the nuclear project. In the model, we consider six kinds uncertainty factors which are investment costs, generating cost, nuclear accident, enterprise environment cost, the electricity price and the carbon value resulted from the process of nuclear power generation to compare with the original thermal power generation. Under the market linkage mechanism, the Monte Carlo stochastic simulation for the nuclear power cost and the liberalization of electricity price considering the supply and demand adjustment coefficient are studied, which makes the volatility and change of the nuclear power generating cost and the liberalization ofelectricity price are more relevant to the reality.The model described in the paper is used to evaluate China zhejiang Sanmen nuclear value with abandonment option. We assess the effect for investment project value through comparing two cases about considering carbon value and not considering carbon value. The results show that the addition of carbon value avoid the enterprises making mistakes in the investment decisions period and is advantageous for the enterprises to make the right decisions in the stage of project investment.We evaluate the value of zhejiang Sanmen third generation nuclear plant and do sensitivity analysis for electricity price under three kinds of price mechanisms. Results show that real options theory can increase the flexibility of the nuclear power value evaluation and avoid nuclear project value being undervalued.In the situations of considering carbon value and not considering carbon value, we assess nuclear power value under different nuclear power investment cost and do sensitivity analysis. According to the comparative analysis, we find carbon value added can increase the cash flow in the operating process of nuclear power project, which makes the enterprise rethinks investing in the original stage of not investing. So it will avoid investment opportunities being missed and embodies the advantages of nuclear power in the environmental and economic aspects.