In this issue of Energy Market Insights, “Valuing Fossil Fuel Generation Assets in a Green Economy,” the authors outline the stochastic model that NERA has developed to help investors gain insights into the critical valuation issues surrounding fossil fuel generation plants, using a case study based in the Pennsylvania-Jersey-Maryland  region of the US. The introduction of environmental policies in many jurisdictions world-wide raises a number of new questions with respect to valuing conventional fossil fuel plants. The authors’ analysis demonstrates how to move beyond an implicit acknowledgement that these changes will have material impacts on profitability, to an explicit quantification of the key risks.

Click here to read more of NERA’s Energy Market Insights.