engleski

Monte Carlo simulation as a method of project risk analysis – a case of a virtual power plant investment

Monte Carlo simulation is often used in the energy sector as an effective method for analysing risks of projects or future scenarios. Thus, in the growing desire for green energy, different scenarios of potential energy production have been analysed in this chapter referring to a large virtual power plant project as part of the electric power system consisting of production, transmission and supply of electricity. The concept of virtual power plant represents a group of combined distributed energy sources that are managed jointly by a central control unit and provide one production capacity towards the electric power grid, thus enabling less variability in planned production. The profitability analysis of the virtual power plant project is conducted by using methods of capital budgeting like the net present value, internal rate of return, payback period and discounted payback period. In the context of risk analysis and its significance for project efficiency, a Monte Carlo simulation is used to evaluate the impact of different risk factors and facilitate the creation of an efficient project risk management strategy.

capital budgeting, risk assessment, investments in energy sector

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