Study Of Economic Evaluation For Grid Investment Based On Real Option Method

The power industry is closely related to our lives and the national production. It can be divided into two parts:power generation and transmission-distribution generation. Paying much attention to generation, less attention to transmission, and no attention to use are problems for a long time in China. The construction of gird With the acceleration of power construction, the problems of lower transmission capacity which caused by grid construction not marching with generation building become significantly. The investment of grid faces very complex external environment, therefore, there are many uncertain situations which will hence more flexibility concerning the investment for decision-maker. However, it has become more and more difficult to evaluate the real value of capital investment opportunities correctly due to the flaws of the ignorance on operation flexibility and strategic influence of the conventional investment decision methodology based on classic present value. At the same time as a result of the complex external environment, future situation can not be expected very accurate, so it is necessary to introduce the concept of fuzzy number. For all of these reasons, it is very urgent and necessary to start the applied research on the grid construction investment decision based on the fuzzy physical option.In this paper, first studies the characteristics of grid construction projects and its classification, and then introduce the external environment which grid faces. And then the author summarized features of external environment, which provides theoretical basis for following evaluation methods selection. Second, analyze methods of evaluation, in which pay more attention to real options approach. Then compare between the net present value method which is the classic method of the traditional approaches and real options method based on the characters of grid construction investment. In this step the limitations of traditional decision-making methods are exposed, and the superiority of real option are highlighted. Finally, introduce the fuzzy concept into the real option method in this paper which can solve the uncertain problems which bring by the complex external environment. Then use the fuzzy real option approach on the grid project case. The results show that the real option approach is good at reflecting real situation, and fuzzy real option can make results more accurate.With the deep research on the investment decision methodology of network construction project, this thesis proposed fuzzy physical option method in grid evaluation, by which we can assess the real value of the grid construction project investment, to provide effective support to investment decision maker.