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dc.contributor.author
Madlener, Reinhard
dc.contributor.author
Wickart, Marcel
dc.date.accessioned
2017-06-11T07:57:15Z
dc.date.available
2017-06-11T07:57:15Z
dc.date.issued
2006
dc.identifier.uri
http://hdl.handle.net/20.500.11850/83621
dc.description.abstract
In this paper we develop an economic model that explains the decision-making problem under uncertainty of an industrial ¯rm that wants to invest in a process technology. More specifically, the decision is between making an irreversible investment in a combined heat-and-power production (cogeneration) system, or to invest in a conventional heat-only generation system (steam boiler) and to purchase all electricity from the grid. In our model we include the main economic and technical variables of the investment decision process. We also account for the risk and uncertainty inherent in volatile energy Prices that can greatly a®ect the valuation of the investment project. The dynamic stochastic model presented allows us to simultaneously determine the optimal technology choice and investment timing. We apply the theoretical model and illustrate our main findings with a numerical example that is based on realistic cost values for industrial oil- or gas-¯red cogeneration and heat-only generation in Switzerland. We also briefly discuss expected effects of a CO2 tax on the investment decision.
dc.language.iso
de
dc.publisher
CEPE, Centre for Energy Policy and Economics, Swiss Federal Institute of Technology
dc.subject
Cogeneration
dc.subject
Irreversible Investment
dc.subject
Risk
dc.subject
Uncertainty
dc.subject
Real options
dc.title
Optimal Technology Choice and Investment Timing
dc.type
Working Paper
ethz.title.subtitle
A Stochastic Model of Industrial Cogeneration vs. Heat-Only Production
ethz.journal.title
CEPE Working Paper
ethz.journal.volume
37
ethz.size
28 p.
ethz.notes
First version December 2004, Revised version December 2006.
ethz.identifier.nebis
004298743
ethz.publication.place
Zürich
ethz.publication.status
published
ethz.leitzahl
03533 - Jochem, Eberhard
ethz.leitzahl.certified
03533 - Jochem, Eberhard
ethz.date.deposited
2017-06-11T07:58:53Z
ethz.source
ECIT
ethz.identifier.importid
imp593651dc0a80c41687
ethz.ecitpid
pub:131954
ethz.eth
yes
ethz.availability
Metadata only
ethz.rosetta.installDate
2017-07-14T21:09:51Z
ethz.rosetta.lastUpdated
2018-11-02T14:31:05Z
ethz.rosetta.versionExported
true
ethz.COinS
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