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Research Papers

Assessment of Offshore Wind Energy Projects in Denmark. A Comparative Study With Onshore Projects Based on Regulatory Real Options

[+] Author and Article Information
José Balibrea Iniesta

Department of Civil Engineering,
Polytechnic University of Cartagena,
Ctra. de La Fuensanta, 19, Bajo B,
Murcia 30012, Spain
e-mail: jose.balibrea@balini.es

Manuel Monjas Barroso

Department of Finance,
Autonomous University of Madrid,
Ciudad Universitaria de Cantoblanco,
Madrid 28049, Spain
e-mail: manuel.monjas@uam.es

1Corresponding author.

Contributed by the Solar Energy Division of ASME for publication in the JOURNAL OF SOLAR ENERGY ENGINEERING: INCLUDING WIND ENERGY AND BUILDING ENERGY CONSERVATION. Manuscript received February 12, 2014; final manuscript received March 20, 2015; published online June 4, 2015. Assoc. Editor: Yves Gagnon.

J. Sol. Energy Eng 137(4), 041009 (Aug 01, 2015) (13 pages) Paper No: SOL-14-1063; doi: 10.1115/1.4030656 History: Received February 12, 2014; Revised March 20, 2015; Online June 04, 2015

There is a gap in the literature on the assessment of renewable energy projects regarding the role of regulatory real options (RROs) that do not depend entirely on the project promoter and yet affect the value of the project. This paper provides a methodology for evaluating investments in offshore wind generation in Denmark, based on the use of this type of options. The main results show that these RROs held by the administration, decrease the value of these renewable generation projects in Denmark. This confirms previous research for onshore generation in the same country.

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Figures

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Fig. 1

Simulation example of investment cost evolution

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Fig. 2

Simulated evolution of the average cost of investment

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Fig. 3

Example of simulated evolution of the daily market electricity prices

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Fig. 4

Simulated evolution of electricity prices

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Fig. 5

Simulated evolution of the electricity market sale prices

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Fig. 6

Simulation example for the evolution of the CPI in Denmark

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Fig. 7

CPI evolution in Denmark

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Fig. 8

Example of a simulation for the annual electric output of a wind farm plant

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Fig. 9

Evolution of the average electric energy output production of the wind farm park

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Fig. 10

Probability density function for NPV with market prices plus a premium without limits on production

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Fig. 11

Probability density function for NPV with market prices plus a premium with limits on production

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Fig. 12

Probability density function for NPV with market prices plus premium without limits on production

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Fig. 13

Probability density function for NPV with public incentives with limits on production

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Fig. 14

Probability density function NPV at market prices without public incentives

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