Publication
The Korean Journal of Economic Studies
Study on the Optimal Investment Management of Fuel Cell Power Generator Considering Stochastic Process of Input and Output
Youngsik Nam (Korea University) and Heechan Kang (Incheon National University)Year 2017Vol. 65No. 3
Abstract
To deal with the climate change caused by global warming, the efforts to
reduce greenhouse gases have been continued in the world. In Korea,
Renewable Portfolio Standard has been implemented in the way for the
large-scale power plants to expand the use of renewable energy. This study
analyzes an economic feasibility of an investment on a fuel cell power plant
which is widely used as a distributed resource. Specifically, this study
constructs a real option model, where a stochastic process of electricity price
and liquefied natural gas price are explicitly considered. For the empirical
analysis, we collect the data on POSCO ENERGY, which is a representative
fuel cell power company in Korea. The paper also provides a sensitivity
analysis on the discount rate and the weight of Renewable Energy Certificate.
The result shows that, when the uncertainty associated with the operation of
fuel cell power plant is considered, the investment on power generator has an
economic feasibility under the conditional circumstance.