Should a Lower Discount Rate Be Used for Evaluating a Tolling Agreement than Used for a Renewable Energy Contract?

C. K. Woo; Brian Horii; Michele Chait; Ira Horowitz

doi:10.1016/j.tej.2008.10.002

Should a Lower Discount Rate Be Used for Evaluating a Tolling Agreement than Used for a Renewable Energy Contract?

C. K. Woo, Brian Horii, Michele Chait, Ira Horowitz

Centre for Sustainable Development Studies

Research output: Contribution to journal › Journal article › peer-review

1 Citation (Scopus)

Abstract

Should a lower discount rate be used for evaluating a tolling agreement than used for a renewable energy contract? The California Energy Commission seems to think so. An analysis suggests that a risk-adjusted discount rate is inappropriate. A correct approach should quantify the effect of risk on a contract's financial performance, thereby providing useful information for decision-making.

Original language	English
Pages (from-to)	35-40
Number of pages	6
Journal	Electricity Journal
Volume	21
Issue number	9
DOIs	https://doi.org/10.1016/j.tej.2008.10.002
Publication status	Published - Nov 2008

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10.1016/j.tej.2008.10.002

Cite this

@article{4a8b052ec31a42e4bfc7da281d0287dd,

title = "Should a Lower Discount Rate Be Used for Evaluating a Tolling Agreement than Used for a Renewable Energy Contract?",

abstract = "Should a lower discount rate be used for evaluating a tolling agreement than used for a renewable energy contract? The California Energy Commission seems to think so. An analysis suggests that a risk-adjusted discount rate is inappropriate. A correct approach should quantify the effect of risk on a contract's financial performance, thereby providing useful information for decision-making.",

author = "Woo, {C. K.} and Brian Horii and Michele Chait and Ira Horowitz",

year = "2008",

month = nov,

doi = "10.1016/j.tej.2008.10.002",

language = "English",

volume = "21",

pages = "35--40",

journal = "Electricity Journal",

issn = "1040-6190",