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Projected Business Risk of Regulatory Change on Wind Power Project: Case of Spain

Sisodia, Gyanendra Singh and Soares, Isabel and Ferreira, Paula and Banerji, Sanjay and Prasad, Rajiv (2015) Projected Business Risk of Regulatory Change on Wind Power Project: Case of Spain. Energy Procedia, 79 . pp. 1054-1060. ISSN 1876-6102

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Regulatory uncertainties have often posed a business risk to renewable energy investors. Energy regulations in Spain were recently revised in June 2014. The objective of this study is to analyze the 50 MW wind power project under revised framework. The project is evaluated using NPV with risk and real options method through Monte Carlo simulations. As a part of this study, five scenarios were evaluated. The base scenario, “Business As Usual (BAU)” consist of recent framework that was into place, just before the new regulation was announced. The other scenarios (including newly introduced framework) were compared to the BAU. We have focused on “delay” option for the current scope. The overall results of the study suggest a negative NPV under the revised framework, with significantly higher delay value. From the results, it is advisable to delay the project. The paper presents the policy implications under scenarios selected in the papers. The article also presents the policy implication for developing countries. The study also served as the learning for developing nations from European Union states.

Item Type: Journal Article
Additional Information: 2015 International Conference on Alternative Energy in Developing Countries and Emerging Economies
Subjects: H Social Sciences > HC Economic History and Conditions
T Technology > T Technology (General)
Divisions: Faculty of Business and Economics (FBE) > Graduate School of Business
Depositing User: Fulori Nainoca - Waqairagata
Date Deposited: 20 May 2016 04:09
Last Modified: 20 May 2016 04:09

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