Contribution to investment analysis methods: An assessment of ANEEL's reserve energy auctions
Cash flow discounted. Real options theory. Renewable energies. Reserve energy auctions.
In a scenario of international concern to face the climate change by reducing carbon emissions, especially from fossil fuels, investment in renewable energies has been a way adopted in many countries. However, as every investment requires the analysis of its viability, it is necessary to use appropriate methodologies for this purpose. In this sense, there is a great dichotomy among financial scholars about what is the investment analysis model that brings the most effective information to the entrepreneurs. For some, discounted cash flow (DCF) is the most appropriate. For others, the real options theory (ROT) is considered the method that best assists the entrepreneurs in making their decisions. Besides some approaches say to exist a complementarity between the DCF and the ROT. Given the above, this study supports the thesis that, although complementary, ROT and DCF have divergent views when applied to a renewable energy investment project, depending on its propensity for success or failure. The main objective of this thesis is to contribute to the theoretical advancement of investment analysis methods by empirically evaluating their effective application to real data from 244 renewable energy projects from ANEEL's reserve energy auctions held between 2011 and 2015. This thesis is composed of three studies. The first aims at identifying the characteristics that effectively differentiate the ROT from the DCF. The second one aims at estimating the most important factors for making a wind power and photovoltaic project more likely to be successful in its implementation. Finally, the third one proposes to develop a statistical model capable of estimating the probability of a wind and photovoltaic project entering commercial activity. The contribution from this thesis can provide the entrepreneur with better decision making regarding his/her investment projects.