TY - JOUR
T1 - The Valuation of Geothermal Power Projects in Indonesia Using Real Options Valuation
AU - Bilqist, Reza A.
AU - Dachyar, M.
AU - Farizal,
N1 - Publisher Copyright:
© 2018 The Authors.
PY - 2018/12/10
Y1 - 2018/12/10
N2 - Geothermal power project should be carefully evaluated, because not only the project is large-scale and high-risk, but also huge investments are needed to make the project profitable. The purpose of this study is to evaluate and analyze the present value of the geothermal power plant projects in Indonesia using net present value and real options valuation approach to obtain better project value that indicates profitable investments. Project value determined based on Net Present Value (NPV). The Monte Carlo Simulation calculated NPV based on discount rate, production volume, and operation and maintenance (O&M) cost. The risk of the project defined with 3 scenarios to obtain NPV and calculate Expected Net Present Value (ENPV). The result of this study showed Real Options Valuation obtained the highest project value indicating a higher return of the project that was previously undervalued using NPV and ENPV. Real Options Valuation approach improved the project value by incorporating scenario analysis and strategic option in the valuation process.
AB - Geothermal power project should be carefully evaluated, because not only the project is large-scale and high-risk, but also huge investments are needed to make the project profitable. The purpose of this study is to evaluate and analyze the present value of the geothermal power plant projects in Indonesia using net present value and real options valuation approach to obtain better project value that indicates profitable investments. Project value determined based on Net Present Value (NPV). The Monte Carlo Simulation calculated NPV based on discount rate, production volume, and operation and maintenance (O&M) cost. The risk of the project defined with 3 scenarios to obtain NPV and calculate Expected Net Present Value (ENPV). The result of this study showed Real Options Valuation obtained the highest project value indicating a higher return of the project that was previously undervalued using NPV and ENPV. Real Options Valuation approach improved the project value by incorporating scenario analysis and strategic option in the valuation process.
UR - http://www.scopus.com/inward/record.url?scp=85059130663&partnerID=8YFLogxK
U2 - 10.1051/matecconf/201824803004
DO - 10.1051/matecconf/201824803004
M3 - Conference article
AN - SCOPUS:85059130663
VL - 248
JO - MATEC Web of Conferences
JF - MATEC Web of Conferences
SN - 2261-236X
M1 - 03004
T2 - 4th Engineering Science and Technology International Conference, ESTIC 2018
Y2 - 28 August 2018 through 29 August 2018
ER -