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dc.contributor.authorSendstad, Lars Hegnes
dc.contributor.authorChronopoulos, Michail
dc.identifier.citationEnergy Policy. 2019, 1-17.nb_NO
dc.description.abstractAlthough innovation and support schemes are among the main forces that drive investment in renewable energy (RE) technologies, both involve considerable uncertainty. We develop a real options framework to analyse the impact of technological, policy and electricity price uncertainty on the decision to invest sequentially in successively improved versions of a RE technology. Technological uncertainty is reflected in the random arrival of innovations, and policy uncertainty in the likely provision or retraction of a subsidy that takes the form of a fixed premium on top of the electricity price. We show that greater likelihood of subsidy retraction (provision) lowers (raises) the incentive to invest, and, by comparing a stepwise to a lumpy investment strategy, we show how an embedded option to adopt an improved technology version mitigates the impact of subsidy retraction on investment timing. Specifically, we show how stepwise investment facilitates earlier technology adoption compared to lumpy investment, and that, under stepwise investment, technological uncertainty accelerates technology adoption, thus further offsetting the incentive to delay investment in the light of subsidy retraction.nb_NO
dc.rightsNavngivelse 4.0 Internasjonal*
dc.titleSequential investment in renewable energy technologies under policy uncertaintynb_NO
dc.typeJournal articlenb_NO
dc.typePeer reviewednb_NO
dc.source.journalEnergy Policynb_NO
dc.description.localcodeThis is an open access article distributed under the terms of the Creative Commons CC-BY license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.nb_NO
cristin.unitnameInstitutt for industriell økonomi og teknologiledelse

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Navngivelse 4.0 Internasjonal
Except where otherwise noted, this item's license is described as Navngivelse 4.0 Internasjonal