Tag: R38

RENEWABLE ENERGY PROJECT APPRAISAL USING THE REAL OPTIONS METHODOLOGY

Vasileios PAPADIMITRIOU

Researcher, Department of Regional Development and Planning, University of Thessaly, Volos, Greece

vasil.papadimitriou@gmail.com

Serafeim POLYZOS

Professor, Department of Regional Development and Planning, University of Thessaly, Volos, Greece

spolyzos@uth.gr

Dimitrios TSIOTAS

Assistant Professor, Department of Regional and Economic Development, School of Applied Economics and Social Sciences, Agricultural University of Athens, Amfissa, Greece

tsiotas@aua.gr

Abstract

Renewable energy sources (RES) are characterized as clean forms of energy and come directly or indirectly from the impact of solar energy on the environment. The overall process of planning, designing, constructing, and operating renewable energy projects involves complex uncertainties and risks, which are difficult to analyze and evaluate effectively through traditional investment appraisal methods. Each RES project presents different types of uncertainties, which are categorized as external and internal. The Real Options (RO) theory for evaluating investments in RES projects can provide additional investment options at different stages of the projects, enhancing flexibility and improving the decision-making ability of a company’s management.

This paper summarizes the specifics governing RES projects, the main characteristics of the RO methodology, and an overall framework for its application to RES projects. This framework is used to evaluate an investment in a 500kWp photovoltaic (PV) park in Greece. The uncertainties selected for the analysis of the RO methodology are the electricity sales price and the production from the specific PV project. In addition, the options/rights of the investor that are considered, are to continue or abandon the investment in each phase of the project implementation. The results, based on the current data and have included the possible fluctuation in the values of the two aforementioned uncertainties, show that investing in a PV project of similar size and technology in Greece is advantageous and worth undertaking. The intention to finance a large proportion of the investment by the banks plays an important role in this.

Keywords: project appraisal methods, real options theory, renewable energy projects, risk and uncertainty analysis, construction project management

JEL classification: R3, R5, R38,

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TOOLS OF FORMATION OF THE SYSTEM OF SOCIO-ECONOMIC SECURITY OF TERRITORIAL COMMUNITIES OF THE REGION

Veacheslav SHEBANIN

Rector of the Mykolayiv National Agrarian University, 54020, 9 Georgiy Gongadze Str., Mykolayiv, Ukraine

shebanin8921@tanu.pro

Iurii KORMYSHKIN

Professor at the Department of Public Administration and Administration and International Economy. Mykolayiv National Agrarian University, 54020, 9 Georgy Gongadze Str., Mykolayiv, Ukraine

prof.kormyshkin@tanu.pro

Alona KLIUCHNYK

Head of the Department of Public Administration and Administration and International Economy, Mykolayiv National Agrarian University, 54020, 9 Georgy Gongadze Str., Mykolayiv, Ukraine

a-kluch@nuos.pro

Iryna ALLAKHVERDIYEVA

Graduate Student at the Department of Public Administration and Administration and International Economy, Mykolayiv National Agrarian University, 54020, 9 Georgy Gongadze Str., Mykolayiv, Ukraine

allakhverdiyeva@nuos.pro

Valentyna UMANSKA

Doctoral Student at the Department of Public Administration and Administration and International Economy, Mykolayiv National Agrarian University, 54020, 9 Georgy Gongadze Str., Mykolayiv, Ukraine

vumanska@uohk.com.cn

Abstract

The urgency of the stated subject of this scientific research is conditioned by the need to develop and integrate effective tools for the formation of a system of socio-economic security of territorial communities in a given geographical region, which is essential for the quality of economic development of these regional communities in the short and long term. The purpose of this research work is to study the tools of formation of the system of social and economic security of territorial communities of the region in the current system of social and economic relations in a given geographical region, as well as assessing the effectiveness of the practical application of such instruments in the context of assessing the role and place of these regions in the economic system of the whole State. The basis of the methodological approach in this scientific study is a combination of methods of quantitative and qualitative analysis of the key principles of the system of socio-economic security of territorial communities of the region, as well as tools to ensure this process. In the course of carrying out this scientific study, results have been obtained indicating the need to ensure the socio-economic security of a given region, through the creation of effective tools for the formation of a system of this kind of security, taking into account the specific features of a given region and its role and place in the socio-economic system of the whole state. The results obtained in the course of this scientific research, as well as the conclusions derived therefrom, have significant practical significance for representatives of specific territorial regional communities, whose immediate interests include addressing the socio-economic security of the territorial communities of the region through the use of the necessary effective tools for this task.

Keywords: region, socio-economic security, territorial communities of the region, economic development, development trends of regions, local socio-economic development

JEL classification: R1, R38, R50

 pp. 127-136

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