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Option Theory & Coal-fired Power Generation

Option Theory & Coal-fired Power Generation. Donald C Rorke (Fall 2002). Alternative forms of power generation. Alternative forms of financing. Site selection. Coal prices Exchange rate hedging. Market rates for exported power. Etc.

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Option Theory & Coal-fired Power Generation

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  1. Option Theory & Coal-fired Power Generation Donald C Rorke (Fall 2002)

  2. Alternative forms of power generation. Alternative forms of financing. Site selection. Coal prices Exchange rate hedging. Market rates for exported power. Etc. What considerations can ‘Option Theory’ be applied to with this type of business?

  3. Put Options. • Alternative forms of power generation. • Alternative forms of financing • Site selection. • Why?

  4. Call Options. • Coal prices. • Market rates for exported power. • Exchange rates. • Why?

  5. Volatility of these Options. • Seasonality of market. • Public perceptions. • Transportation. • Labour bargaining units.

  6. Questions?

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