Photovoltaic power purchase agreement valuation under real options approach

Felipe Isaza Cuervo, Carlos Andrés Arredondo-Orozco, Gabriela Carolina Marenco-Maldonado

Resultado de la investigación: Contribución a una publicación especializadaArtículo

Resumen

Renewable energies are an alternative to explore new business models in Colombia, especially when the new regulation associated with Law 1715 is considered. In this work the financial feasibility of a power purchase agreement (PPA) that uses photovoltaic energy is analyzed from the perspective of a non-traditional investor. In this paper, the financial feasibility of a PPA business was analyzed considering some of the benefits offered by Law 1715 through the use of discounted cash flows and real option analysis. The results show that tax benefits (included on Law 1715) improve the feasibility of this business models in Colombia, nevertheless, the defer option value suggest the convenience of delaying the investment. This work contributes to the analysis of the effect of the renewable energy policy incentives and the development of new business models based on renewable energies and the analysis of decisions that help include photovoltaic energy in Colombia.

Idioma originalInglés
Páginas96-107
Número de páginas12
Volumen36
Publicación especializadaRenewable Energy Focus
DOI
EstadoPublicada - mar 2021

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