The investment risk analysis of wind power project in China

Cun-bin Li, Gong-shu Lu and Si Wu

Renewable Energy, 2013, vol. 50, issue C, 481-487

Abstract: In the context of a focus exploiting for alternative and renewable energies to reach the emission reduction goal in China, wind power industry serves as a significant development object and also shows vast development space. However, for its investors, project risks and the long-term positive trend are coexistent, due to the joint influence of several factors as the result of Chinese wind power industry circumstance and relative policies and regulations, such as investment in construction period, cost in operation period, electricity connected to grid, feed-in tariff, CDM project income, and government subsidy. To assess the investment risk of wind power project, this paper constructed a process which initially simulated NPV with Monte Carlo method and then analyzed the investment payback period as well as IRR based on it. Next, combining with a specific case in north China, firstly the credibility and accuracy of proposed simulation process were verified, then the NPV was simulated and the investment payback periods as well as IRR were evaluated under different grid-connected ratios in two conditions, namely the project with and without CDM income. The simulation results indicated the proposed case having high investment risk, so afterward general suggestions on mitigating the investment risks of wind power project in China were presented.

Keywords: China; Policy and regulation; Wind power project; Investment risk; Monte Carlo simulation (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148112004338
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:50:y:2013:i:c:p:481-487

DOI: 10.1016/j.renene.2012.07.007

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

More articles in Renewable Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().