Switching outputs in a bioenergy cogeneration project: A real options approach

摘要: Abstract Environmental concerns have stimulated the search for economically feasible renewable energy projects. One such alternative is use of biomass generation, which has increasingly been focus interest. Traditional valuation methods, on other hand, fail to capture value embedded options that exist in many these projects, may lead non-optimal investment decisions. In this article we analyze feasibility installing a cogeneration unit an industrial plant Brazil order extract from residue currently discarded, can be used thermal and electric generation. The also allows firm flexibility optimally choose between increase production or generation surplus sale short term market, once additional interconnection grid made. We model uncertainty over future prices as mean reverting process with jumps seasonality bundle European under real approach. results indicate warranted option switch outputs adds significant project, suggests sustainable case.