| ID | 116963 |
| Title Proper | Public policy aid for bioenergy investment |
| Other Title Information | case study of failed plants |
| Language | ENG |
| Author | Gonzalez, Asa O ; Karali, Berna ; Wetzstein, Michael E |
| Publication | 2012. |
| Summary / Abstract (Note) | Recent failures of renewable energy plants have raised concerns regarding government's role in providing credit subsidies and have harmed the long-run development of renewable energy. The major reason for these failures lies in government loan appraisers not having a model that addresses these root causes and instead relying on traditional net present value (NPV) analysis. What is required is a model representing entrepreneurs' investment decision processes when faced with uncertainty, irreversibility, and flexibility that characterize renewable energy investments. The aim is to develop such a model with a real options analysis (ROA) criterion as the foundation. A case study comparing NPV with ROA decisions for 50 and 100 million gallon ethanol plants is used as a basis for future development of a template government loan appraisers can use for evaluating the feasibility of renewable energy investments. |
| `In' analytical Note | Energy Policy Vol. 51; Dec 2012: p. 465-473 |
| Journal Source | Energy Policy Vol. 51; Dec 2012: p. 465-473 |
| Key Words | Ethanol ; Real Options ; Net Present Value |