Investment Decision-making Research For Urban Gas Project Based On Real Options

With the transformation of China's energy structure,the development space of China's gas industry is huge.The franchise period of urban gas projects is generally30 years.There are many uncertainties in the operation period.The traditional economic evaluation system of urban gas projects can not reflect the uncertainty of the future,which leads to the decision-making errors of urban gas projects with investment value,and affects the scientific and accurate investment decision-making.How to improve the traditional evaluation methods and improve the quality of project decision-making has become an important issue of concern to the industry.The aim of this research is to develop an improved decision-making model for urban gas projects based on real option theory and to guide decision-making practice.Firstly,this research introduces the concept of urban gas project and the procedure of project investment decision-making,and expounds the theory of traditional economic evaluation method,the existing problems and the feasibility of real options in urban gas project investment.Secondly,it identifies that urban gas projects have contraction options,deferred options and expansion options.Based on real options,it evaluates the value of urban gas projects,adjusts investment strategy,analyses investment opportunity and investment timing.It also constructs a life cycle investment decision-making framework model based on real options.Finally,taking the investment model of gas project in Shenxian as an example,the feasibility of the investment decision model is verified.This research builds a life cycle investment decision model for urban gas projects,improves the shortcomings caused by traditional economic evaluation methods,provides a new perspective for decision-makers,and provides better theoretical guidance for investment decision-making of urban gas projects.