![]() ![]() Furthermore, the findings provide policymakers and project planners with valuable insights into key aspects of RE project and policy design. tive action, also known as real options, into the valuation problem.2 Consistent with option pric. The concept of real options arises from financial options. The results give a comprehensive picture of existing research on the topic, thus providing researchers with a solid foundation for further study and indications of directions for future development. approach for economic valuation of projects under uncertainty 12. Particular attention is given to RO in project and policy design. This study describes the research focus, trends and design found in contemporary academic literature devoted to RE valuation with a RO approach. The currently most used valuation methods (Discounted Cash Flow. ![]() The variety of different frameworks and models adopted as well as a lack of aggregated analysis of the field suggest a need for a critical review of RO methodology and design in RE assessment. In this work we are going to introduce the Real Options Analysis method for project valuation. In the remaining cases, the RO approach is used as a method for analyzing the effects of policy support for RE investment. Research has demonstrated the potential for real options to enhance project value by managing uncertainty through investment, structuring and design. To take account of the high-risk profile and irreversibility of RE investments, researchers have resorted to sophisticated real options (RO) approaches that enable flexibility to be incorporated into project design in the face of an uncertain environment. The key application area of the real option approach is investment project valuation, and the greatest part of the research utilizes RO for project (62) and R&D (6) appraisal (Fig. In light of intensive development of the renewable energy (RE) sector, a growing number of academic papers address the complexity of RE investment planning and valuation. ![]()
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