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Financial Engineering For Energy System Capital Budgeting, Chin-Chuen Teoh

Dissertations and Theses

The United State energy industry is experiencing a major paradigm shift. This conventional vertically integrated energy industry is gradually transformed to a competitive market environment—a deregulated energy market. The market and regulatory frameworks are expected to continue to evolve in the future. Market participants are emphasizing more on profit maximization as returns on investment are no longer guaranteed. Therefore, risk management and capital budgeting play critical roles in energy system planning. Planning always involves uncertainties. When there are uncertainties, there are risks involve. This dissertation concentrates on the application of Real Options Analysis, ROA, especially lattice method, to energy system …