Abstract
I provide a novel theoretical approach to value wind energy investments. It allows to adjust for a number of risk parameters, including wind speeds, electricity price forecasts, discount rates, and uncertainty in subsidies. I use this approach to model wind energy investments under two different subsidy schemes in Denmark through a numerical Monte Carlo simulation. Moreover, I model wind energy investments under the assumption of a subsidy-free asset class. I compare the three systems and expose them to various sources of uncertainty through which I provide more clarity on which risk parameters matter most to wind energy investors and how the three systems compare to each other.
Original language | English |
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Publication date | 2020 |
Publication status | Published - 2020 |
Event | The 80th Annual Meeting of American Finance Association. AFA 2020 - San Diego, United States Duration: 3 Jan 2020 → 5 Jan 2020 Conference number: 80 https://afajof.org/annual-meeting/ |
Conference
Conference | The 80th Annual Meeting of American Finance Association. AFA 2020 |
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Number | 80 |
Country/Territory | United States |
City | San Diego |
Period | 03/01/2020 → 05/01/2020 |
Internet address |
Keywords
- Energy finance
- Valuation
- Project finance
- Subsidies