The value of an operating electricity production unit
In this paper we develop an equilibrium-based net present value model of an operating electricity production unit whose supply is given by a stochastic, mean-reverting process. The price process for electricity is derived from an underlying pair of stochastic, aggregate supply and demand processes that are also mean-reverting, while the instantaneous supply and demand functions are iso-elastic. The model is illustrated by a set of experimental data.
Publisert i 2001
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