{"title":"Renewable Energy Investments, Support Schemes and the Dirty Option","authors":"Domenico De Giovanni, Elena Iakimova","doi":"10.1002/asmb.2901","DOIUrl":null,"url":null,"abstract":"<p>In a real options framework, we analyze the behavior of a large energy producer who can invest in a portfolio of Renewable Energy Source (RES) and <i>dirty</i> energy source. Competitive fuel prices challenge the investments in RES. Given a budget constraint, the agent allocates the optimal capacities of both energy instalments and selects the optimal investment time. We use the model to compare the effectiveness of classical support schemes such as Feed-in Tariffs or Green Certificate with respect to forms of taxation of dirty technology such as Carbon Taxes or Carbon Permits. This paper proposes a conceptual framework and qualitative analysis to understand which support system enhances the attractiveness of renewable energy investments.</p>","PeriodicalId":55495,"journal":{"name":"Applied Stochastic Models in Business and Industry","volume":"40 6","pages":"1472-1483"},"PeriodicalIF":1.5000,"publicationDate":"2024-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/asmb.2901","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Applied Stochastic Models in Business and Industry","FirstCategoryId":"100","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1002/asmb.2901","RegionNum":4,"RegionCategory":"数学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"MATHEMATICS, INTERDISCIPLINARY APPLICATIONS","Score":null,"Total":0}
引用次数: 0
Abstract
In a real options framework, we analyze the behavior of a large energy producer who can invest in a portfolio of Renewable Energy Source (RES) and dirty energy source. Competitive fuel prices challenge the investments in RES. Given a budget constraint, the agent allocates the optimal capacities of both energy instalments and selects the optimal investment time. We use the model to compare the effectiveness of classical support schemes such as Feed-in Tariffs or Green Certificate with respect to forms of taxation of dirty technology such as Carbon Taxes or Carbon Permits. This paper proposes a conceptual framework and qualitative analysis to understand which support system enhances the attractiveness of renewable energy investments.
期刊介绍：
ASMBI - Applied Stochastic Models in Business and Industry (formerly Applied Stochastic Models and Data Analysis) was first published in 1985, publishing contributions in the interface between stochastic modelling, data analysis and their applications in business, finance, insurance, management and production. In 2007 ASMBI became the official journal of the International Society for Business and Industrial Statistics (www.isbis.org). The main objective is to publish papers, both technical and practical, presenting new results which solve real-life problems or have great potential in doing so. Mathematical rigour, innovative stochastic modelling and sound applications are the key ingredients of papers to be published, after a very selective review process.
The journal is very open to new ideas, like Data Science and Big Data stemming from problems in business and industry or uncertainty quantification in engineering, as well as more traditional ones, like reliability, quality control, design of experiments, managerial processes, supply chains and inventories, insurance, econometrics, financial modelling (provided the papers are related to real problems). The journal is interested also in papers addressing the effects of business and industrial decisions on the environment, healthcare, social life. State-of-the art computational methods are very welcome as well, when combined with sound applications and innovative models.
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