This empirical study examines investment behavior in small hydropower investments under uncertain electricity prices and revenues from selling so-called green certificates. We assess 73 small hydropower projects granted a license to build from the Norwegian authorities. The license is considered an American call option with infinite lifetime. To examine the investment behavior, we conduct a survey to recreate the available information on the date of investment decision. We apply a net present value approach and a real options value approach to the small hydropower projects by using two scenarios; with and without green certificates. Our data does not support that a real options approach explains investor behavior better than a net present value approach.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:ntnu-15052 |
| Date | January 2011 |
| Creators | Gravdehaug, Guro, Remmen, Ragnhild |
| Publisher | Norges teknisk-naturvitenskapelige universitet, Institutt for industriell økonomi og teknologiledelse, Norges teknisk-naturvitenskapelige universitet, Institutt for industriell økonomi og teknologiledelse, Institutt for industriell økonomi og teknologiledelse |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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