Investment decision of photovoltaic projects based on stochastic modelling of solar irradiation and shortfall penalties foreseen in centralized-generation auction’s contracts

Leite, Marco Antonio Haikal; Bastian-Pinto, Carlos de Lamare; Dias, Andre de Oliveira; Pradelle, Florian; Filho, Sergio Luiz Pinto Castiñeiras; Frutuoso, Luis Fernando Mendonça; Fernández, Eloi Fernández y

doi:10.1007/s40430-022-03917-w

J Braz. Soc. Mech. Sci. Eng.

2022

DOI: 10.1007/s40430-022-03917-w

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Investment decision of photovoltaic projects based on stochastic modelling of solar irradiation and shortfall penalties foreseen in centralized-generation auction’s contracts

Marco Antonio Haikal Leite

Carlos de Lamare Bastian-Pinto

Andre de Oliveira Dias

et al.

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2024

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Procurement contract design for distributed photovoltaic project considering output risk under asymmetric production effort information

Bai,

Cai

2024

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PurposeDistributed photovoltaic (DPV) projects generally have output risks, and the production effort of the supplier is often private information, so the buyer needs to design the optimal procurement contract to maximise its procurement utility.Design/methodology/approachBased on the principal-agent theory, we design optimal procurement contracts for DPV projects with fixed payments and incentive factors under three situations, i.e. symmetry information, asymmetry information without monitoring and asymmetry information with monitoring. We obtain the optimal production effort and expected utility of the supplier, the expected output and expected utility of the buyer and analyse the value of the information and monitoring.FindingsThe results show that under asymmetric information without monitoring, risk-averse suppliers need to take some risk due to output risk, which reduces the optimal production effort of the supplier and the expected output and expected utility of the buyer. Therefore, when the monitoring cost is below a certain threshold value, the buyer can introduce a procurement contract with monitoring to address the asymmetry information. In addition, under asymmetric information without monitoring, the buyer should choose a supplier with a low-risk aversion.Originality/valueConsidering the output risk of DPV projects, we study the optimal procurement contract design for the buyer under asymmetric information. The results provide some theoretical basis and management insights for the buyer to design optimal procurement contracts in different situations.

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Procurement contract design for distributed photovoltaic project considering output risk under asymmetric production effort information

Bai,

Cai

2024

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Investment decision of photovoltaic projects based on stochastic modelling of solar irradiation and shortfall penalties foreseen in centralized-generation auction’s contracts

Cited by 1 publication

References 26 publications

Procurement contract design for distributed photovoltaic project considering output risk under asymmetric production effort information

Procurement contract design for distributed photovoltaic project considering output risk under asymmetric production effort information

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