Geothermal Power Projects Valuation Model

Martínez Ruiz, Yessenia; Duque, Diego Fernando Manotas; Ramírez Malule, Howard

doi:10.1007/978-3-031-00856-6_2

Cited by 1 publication

(3 citation statements)

References 27 publications

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“…Each must be accompanied by managerial decisions on the option of contributing cash to the project. These phases were adapted for exploration, drilling, construction, and operation (Martí nez et al, 2022), meeting the specific requirements for geothermal sources.…”

Section: Framework For Investment Decision In Geothermal Projects In ...mentioning

confidence: 99%

“…In the design phase, available information is increased and refined to clarify its scope. This phase was adjusted and identified as drilling, and is closely related to the design of the geothermal plant (Martí nez et al, 2022).…”

Section: Compound Option Modelmentioning

confidence: 99%

“…In Step 1, investment parameters are defined at their respective times. Investments in the exploration and drilling phases amounted to BRL 22,635,496.98 and BRL 28,671,629.51,corresponding to 15% and 19% of the costs of implementing geothermal plants in , respectively (Irena, 2021Martí nez, Duque, & Ramí rez, 2022).…”

Section: Ro Analysismentioning

confidence: 99%

See 2 more Smart Citations

Real Options Analysis for Investment Decisions in Geothermal Energy

Becker,

Andrade de Lima,

Weber

2023

IJEF

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Geothermal renewable energy can contribute to the reduction of greenhouse gas emissions. However, difficulties have been encountered during its development. It is characterized by high-risk investment and irreversibility, whereas traditional investment analysis techniques have limited applications. As a tool for evaluating energy investments, the real options theory allows flexibility to be incorporated into project design in the face of an uncertain environment and has demonstrated the ability to add economic value to investments. Based on simulations of a geothermal project implemented in Brazil in a real-options framework specifically adapted for the analysis of geothermal investments, this study demonstrates that the tool is efficient in adding economic value to the analysis. In addition, it provides a comprehensive view of the project, identifying the managerial flexibilities and uncertainties that influence profits the most. This model is expected to encourage researchers and investors to evaluate geothermal energy projects in Brazil.

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Section: Framework For Investment Decision In Geothermal Projects In ...mentioning

confidence: 99%

Section: Compound Option Modelmentioning

confidence: 99%