Power system equipments investment decision-making under uncertainty: A real options approach

Shamshul Bahar Yaakob, Junzo Watada

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Power supply failures have caused major social losses in the information society in the present age. Such a loss is estimated up to approximately two trillion yen when a large power failure happens in a big city such as Metropolitan Tokyo. Therefore, it is necessary to provide some remedies such as a diagnosis of the power system equipments not only for preventing the system accident of the equipment beforehand from its failures but also for guarding the social cost from increasing. The objective of the paper is to provide the preliminary research on life cycle management. In this paper, net present value (NPV) analysis and real options approach (ROA) are employed in life cycle management in investment and maintenance of power supply systems in order to keep the continuous normal operation under uncertainty.

Original languageEnglish
Pages (from-to)699-708
Number of pages10
JournalSmart Innovation, Systems and Technologies
Volume4
DOIs
Publication statusPublished - 2010
Externally publishedYes

Fingerprint

Life cycle
Decision making
Value engineering
Electric power systems
Accidents
Costs
Uncertainty
Investment decision-making
Power system
Decision making under uncertainty
Real options
Equipment investment
Life cycle management
Information society
Social costs
Value analysis
Tokyo
Net present value
Remedies

Keywords

  • Net present value approach
  • Power system equipments
  • Real options approach

ASJC Scopus subject areas

  • Computer Science(all)
  • Decision Sciences(all)

Cite this

Power system equipments investment decision-making under uncertainty : A real options approach. / Yaakob, Shamshul Bahar; Watada, Junzo.

In: Smart Innovation, Systems and Technologies, Vol. 4, 2010, p. 699-708.

Research output: Contribution to journalArticle

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