气候变化领域集成服务门户(CCPortal): Enhancing the evaluation of Energy Investments by supplementing traditional discounted cash flow with Energy Return on Investment analysis

CCPortal

DOI	10.1016/j.enpol.2022.112953
	Enhancing the evaluation of Energy Investments by supplementing traditional discounted cash flow with Energy Return on Investment analysis
	Oosterom, Jan-Pieter; Hall, Charles A. S.
发表日期	2022
ISSN	0301-4215
EISSN	1873-6777
卷号	168 页码:13
英文摘要	Energy companies, like companies more generally, routinely have to make investment decisions by comparing alternative investment projects. In the face of the uncertainty of the current energy transition, traditional economic tools, such as discounted cash flow (DCF) analysis, that depend on long term cash forecasting, offer limited, deterministic and potentially misleading insights. Additionally there are many pressures on companies to expand decision making criteria to ESG (Environmental, Social and Governance) considerations. But these are often qualitative with no clear standards, leaving investors often forced to make significant investments based on poorly understood, at times misleading and even self-defeating considerations. We explore the application of Biophysical Economics (BPE), an approach to economics based on the natural sciences, as an alternative to provide an additional lens that cuts through the uncertainty and political pressures to help companies navigate this uncertainty and make more robust long term investment decisions. The most immediately useful tool within BPE is the concept of Energy Return on Energy Invested (EROI). Specifically we compare an investment case for oil companies, one in oil sands vs. one in microbial-enhanced oil recovery, applying the two methodologies in parallel. Results from a traditional economic perspective weakly favor the oil sands, whereas biophysical economics strongly favors the microbial case due to is significantly lower energy requirement to produce the energy that it yields. A close examination indicates that EROI can be used effectively and practically next to DCF to provide better insights and identify cases that are fundamentally less sustainable for society.
学科领域	Economics; Energy & Fuels; Environmental Sciences; Environmental Studies
语种	英语
WOS研究方向	Business & Economics ; Energy & Fuels ; Environmental Sciences & Ecology
WOS记录号	WOS:000816030900001
来源期刊	ENERGY POLICY
文献类型	期刊论文
条目标识符	http://gcip.llas.ac.cn/handle/2XKMVOVA/272197
作者单位	Royal Dutch Shell; State University of New York (SUNY) System; State University of New York (SUNY) College of Environmental Science & Forestry
推荐引用方式 GB/T 7714	Oosterom, Jan-Pieter,Hall, Charles A. S.. Enhancing the evaluation of Energy Investments by supplementing traditional discounted cash flow with Energy Return on Investment analysis[J],2022,168:13.
APA	Oosterom, Jan-Pieter,&Hall, Charles A. S..(2022).Enhancing the evaluation of Energy Investments by supplementing traditional discounted cash flow with Energy Return on Investment analysis.ENERGY POLICY,168,13.
MLA	Oosterom, Jan-Pieter,et al."Enhancing the evaluation of Energy Investments by supplementing traditional discounted cash flow with Energy Return on Investment analysis".ENERGY POLICY 168(2022):13.