Value assessment of power generation project by UNPV method considering scale effects

Power generation project may face a big risk because of the large amount of investment money. Therefore, it is necessary to develop a new method to evaluate the risks for the investment. We have already proposed two new asset evaluation methods. One is the method using a net present value based on utility indifference pricing (UNPV method) and the other is probit model which simplifies UNPV method. In this paper, we propose UNPV method considering the scale effect. A conventional UNPV method evaluates a power generation project per 1kW. Therefore, it takes no consideration of the scale risk. By considering the scale effect, we can calculate optimal investment scale and maximum allowable scale. We apply it to the project of photovoltaic system and show the effectiveness of the new method.