Analyzing the business case for hydrogen-fuel infrastructure investments with endogenous demand in the Netherlands: A real options approach

This paper explicitly incorporated the impact that realized investments in new transportation infrastructure have on adoption speed in a real option framework for taking sustainable investment decisions under uncertainty and analyzed the consequences of this dependence for optimal business investment strategies. We used a modified Generalized Bass Model to shape the adoption diffusion process and incorporate this approach into an N-fold compound real option framework. We applied the combined model to the case study of the introduction of hydrogen fuel stations for hydrogen cars in the Netherla... Mehr ...

Verfasser: Li, Ye
Kool, Clemens
Engelen, Peter Jan
Dokumenttyp: Artikel
Erscheinungsdatum: 2020
Schlagwörter: Adoption speed / Generalized bass model / Hydrogen infrastructure / Investment uncertainty / Real option model / Scenario analysis / Sustainable energy / Geography / Planning and Development / Renewable Energy / Sustainability and the Environment / Management / Monitoring / Policy and Law / SCI and SSCI Journals
Sprache: Englisch
Permalink: https://search.fid-benelux.de/Record/base-29202867
Datenquelle: BASE; Originalkatalog
Powered By: BASE
Link(s) : https://dspace.library.uu.nl/handle/1874/411407

This paper explicitly incorporated the impact that realized investments in new transportation infrastructure have on adoption speed in a real option framework for taking sustainable investment decisions under uncertainty and analyzed the consequences of this dependence for optimal business investment strategies. We used a modified Generalized Bass Model to shape the adoption diffusion process and incorporate this approach into an N-fold compound real option framework. We applied the combined model to the case study of the introduction of hydrogen fuel stations for hydrogen cars in the Netherlands. We performed a scenario analysis for six different transportation infrastructure investment strategies combined with four different parameterizations. The results show the risk of ignoring the potential interaction between the adoption process and the speed with which the required transportation infrastructure will become available. This may lead to suboptimal decisions with respect to the optimal timing of corporate investment spending, as well as with respect to the assessment of the overall feasibility of the project.