The Staged Decision Model of Key Grid Project: Based on the Real Option Theory

Wei Hu; Kang Ren Huang; Zhi Yan Liu; Min Du

doi:10.4028/www.scientific.net/AMR.1008-1009.827

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HomeAdvanced Materials ResearchAdvanced Materials Research Vols. 1008-1009The Staged Decision Model of Key Grid Project:...

The Staged Decision Model of Key Grid Project: Based on the Real Option Theory

Abstract:

With the continuous development of electric power construction and electricity market reform, power grid investment are facing more and more uncertainties. As to the Key Project investment evaluation for grid, single stage evaluation model is too simple to make an appropriate decision, which overlooked the option value of the investment project. Therefore, in view of the periodical characteristics of investment decision-making process of the grid company’s key project, this article based on the real option analysis methods, and divide the power grid’s key projects into multiple stage according to time sequence, to evaluate each stage’s option value, and to determine the overall value of the grid company’s key investment projects, which has also provided an new train of thought for the assessment of risk investment projects.

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Periodical:

Advanced Materials Research (Volumes 1008-1009)

Pages:

827-830

DOI:

https://doi.org/10.4028/www.scientific.net/AMR.1008-1009.827

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Online since:

August 2014

Authors:

Wei Hu, Kang Ren Huang, Zhi Yan Liu, Min Du

Keywords:

Decision Model, Key Grid Investment Project, Overall Value, Real Option Theory

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References

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