EconPapers    
Economics at your fingertips  
 

Coal, Renewable, or Nuclear? A Real Options Approach to Energy Investments in the Philippines

Casper Agaton

International Journal of Sustainable Energy and Environmental Research, 2017, vol. 6, issue 2, 50-62

Abstract: The Philippines is making a significant step to become energy independent by developing more sustainable sources of energy. The country sees investments in renewable energy and nuclear energy as promising alternatives to address the country’s problem in energy security. This paper evaluates the comparative attractiveness of either investing in alternative energy sources or continuing the use of coal for electricity generation in the Philippines. Applying the real options approach under coal price uncertainty, this study analyzes investment values and optimal timing of switching technologies from coal to renewable or nuclear energy. It also examines how negative externality and the risk of nuclear accident affect investment decisions. Results identify possible welfare losses from waiting or delaying investing in alternative energy. Negative externality favors investment in nuclear energy over coal, whereas the risk of nuclear accident favors investment in renewable energy.

Keywords: Renewable energy; Nuclear energy; Nuclear accident; Coal prices; Dynamic optimization; Investment under uncertainty (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://archive.conscientiabeam.com/index.php/13/article/view/2121/3046 (application/pdf)
https://archive.conscientiabeam.com/index.php/13/article/view/2121/5385 (text/html)

Related works:
Working Paper: Coal, Renewable, or Nuclear? A Real Options Approach to Energy Investments in the Philippines (2017) Downloads
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:pkp:ijseer:v:6:y:2017:i:2:p:50-62:id:2121

Access Statistics for this article

More articles in International Journal of Sustainable Energy and Environmental Research from Conscientia Beam
Bibliographic data for series maintained by Dim Michael ().

 
Page updated 2022-09-16
Handle: RePEc:pkp:ijseer:v:6:y:2017:i:2:p:50-62:id:2121