This book presents the application of real options approach (ROA) to analyze investment decisions for switching energy sources from fossil fuels to alternative energy. Using the Philippines as a case, the ROA models presented here explore how uncertainties including fossil fuel prices, electricity prices, discount rates, externality, renewable energy (RE) costs, and RE investment growth affect investment decisions that focus on developing countries, particularly to fossil-importing countries.
The book is a collection of academic papers published in peer-reviewed journals. The first paper analyzes investments in various RE sources including wind, solar, hydropower, and geothermal over using coal. The second paper compares investments between RE and nuclear energy considering the risk of nuclear accident. The third paper applies the proposed ROA model with the case of Palawan island and analyzes investment in RE over diesel fuel for electricity generation. The fourth paper focuses on investment drivers that make RE sources as a better option than using fossil fuels.
Casper Boongaling Agaton is a postdoctoral researcher at the Utrecht School of Economics and at the Copernicus Institute of Sustainable Development of Utrecht University in the Netherlands. He finished his PhD in International Development Studies at the Institute of Development Research and Development Policy (IEE) of the Ruhr University of Bochum in Germany. His research interests include sustainability studies, energy investments, resource economics, environmental economics, development studies, educational sciences, and the application of real options analysis in interdisciplinary research.