Investment strategy for shallow geothermal resource based on real option model. (February 2019)

• Record Type: Journal Article
• Authors: Siyuan, Chen; Qi, Zhang; Yanyan, Tang; Hailong, Li; Boyu, Liu
• Is Part Of: Energy procedia. Volume 158(2019)
• Page Start: 6118
• Page End: 6125
• Publication Date: 2019-02
• Subjects: Shallow geothermal resource -- real option theory -- investment strategy; Power resources -- Congresses; Power resources -- Periodicals; Power resources; Conference proceedings; Periodicals; 333.7905
• DOI: 10.1016/j.egypro.2019.01.500
• Languages: English
• ISSNs: 1876-6102

Abstract

Abstract: Shallow geothermal resource has been considered as a new and promising form for clean heating in some areas in China, such as Xiong'an New Area. In this paper, a real option model is established to explore the optimal investment timing and investment scale of shallow geothermal resources. According to numerical results, we found that in the reference scenario the critical value of marginal revenue is 4.30 yuan / m 2, and the optimal investment scale is 1.28 million square meters. Simultaneously, the investors are advised to invest after 1.05 years and they will get the unit investment return of 39.34 yuan / m 2 .