Industrial and Manufacturing Systems Engineering
Journal or Book Title
The Engineering Economist
In recent years, there has been a substantial increase in renewable power production sites. However, such sites operated in the 1980s were often abandoned in the 1990s and their remnants are still visible. Hence, it is highly desirable to understand the exit and entry decisions of such sites. Toward this goal, we formulate and analyze models for such decisions regarding a single site from a real options perspective when the operation and maintenance costs follow a geometric Brownian motion and derive policy implications. An extensive numerical example for a wind farm illustrates some of the key features of this study.
Institute of Industrial Engineers
Min, Kyung J.; Lou, Chenlu; and Wang, Chung-Hsiao, "An Exit and Entry Study of Renewable Power Producers: A Real Options Approach" (2012). Industrial and Manufacturing Systems Engineering Publications. 107.