Real Options and Energy Management: Using Options Methodology to Enhance Capital Budgeting Decisions

by Ehud I. Ronn

A multi-author title that focuses on both the fundamentals of real options, and the practical approaches for their application in the energy industry The volume is designed to specifically aid valuation and investment decision-making within the energy industry. It brings together the leading practitioners, consultants and academics from the energy sector who present real option approaches and techniques, such as the diagrammatical approach, to help the industry move away from the climate of uncertainty in the market. It provides case studies and examples of the use of real options in the industry to demonstrate how the latest techniques can be applied to power generation, fuel supply and demand issues, and strategic as well as environmental issues in the energy sector. Additionally, it includes the fundamentals of real option pricing and modelling, such as option valuation, modelling approaches, and optimisation. It emphasises applications of theory to practical situations with worked examples that enable the reader to adopt them in their own projects.

744 pages, Paperback

First published January 8, 2003