The Valuation of Alternative Energy Proposals in Stochastic Markets
thesis
posted on 2020-08-19, 20:19 authored by Jerome Combes-Knoke| This paper seeks to provide a general methodology for the valuation of alternative energy proposals in stochastic markets. Assuming that the markets for energy, fuel, and related financial derivatives are efficient and that prices between various fuels and energies are well understood, I will explain the existing theory of how these prices can be modeled as stochastic processes in relation to one another. I then postulate how these stochastic models can be incorporated into a mathematical framework to determine the value of an alternative energy proposal from the standpoint of consumers, investors, and society as a whole. While the mathematics supporting this argument have well been established, their application to proposal valuations as well as policy analysis has not been widely developed leaving most decision makers to rely on oversimplified discrete time models. |
History
Date
2009-05-17Degree
- BS in Economics
