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

Shamshul Bahar Yaakob, Junzo Watada

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


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
Publication statusPublished - 2010
Externally publishedYes


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

ASJC Scopus subject areas

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


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