@inproceedings{706a3786df7b4f2abe0c2739386b31b4,
title = "A real option based approach for generation investment decision-making and generation capacity adequacy analysis",
abstract = "The deregulation of power industry brings not only more uncertainties and risks for investors in making generation investment decisions, but also a new challenge to governments or regulators for designing an effective market mechanism to ensure adequate generation capacity and hence reliable electricity supply. Provided that the load growth uncertainty is the major source of uncertainty, a new methodological framework for generation investment decision-making is presented based on the well-developed real option approach (ROA), with competition for generation investment from other investors taken into account. A mathematical model is developed and a solution is presented for this purpose. Finally, the proposed method is illustrated by a numerical example. The effects of different market mechanisms on generation investment incentives and hence the generation capacity adequacy are also investigated in a quantitative way.",
keywords = "Capacity payment, Energy-only market, Generation capacity adequacy, Installed capacity market, Real option",
author = "Yong Wang and Fushuan Wen and Chung, \{C. Y.\} and Xiaochu Luo and Ruilin Xu",
year = "2006",
month = oct,
doi = "10.1109/ICPST.2006.321489",
language = "English",
isbn = "1424401119",
series = "2006 International Conference on Power System Technology, POWERCON2006",
publisher = "Institute of Electrical and Electronics Engineers Inc.",
booktitle = "2006 International Conference on Power System Technology, POWERCON2006",
note = "2006 International Conference on Power System Technology, POWERCON2006 ; Conference date: 22-10-2006 Through 26-10-2006",
}
