Power plant investment appraisal : electric industry and economic growth nexus

Awarding institution
  • University of Strathclyde
Date of award
  • 2012
Thesis identifier
  • T13263
Qualification Level
Qualification Name
Department, School or Faculty
  • Electric power industries are undergoing restructuring around the world. Under deregulation, the non-utility, independent power producers (IPP) are allowed to invest in the power system. Each year, many new investments in different types of power plants are proposed by generators all over the world. However, investment in generation projects involves large amounts of capital with a long payback period, comparable with the lifetime of the plant. Moreover, macroscopic situation of electrical industry and economic environment also need to be taken into account. Therefore, how to make an investment decision is a complex problem. This thesis considers the power plant investment issues in UK and China from microscopic and macroscopic viewpoint. The microscopic viewpoint focuses on investment appraisal approaches, different types of generation technologies, and levelised cost of generation. The macroscopic viewpoint focuses on investment environment in UK and China, such as the relationship among electricity consumption, installed capacity and GDP. The thesis begins by presenting the current situation of electricity generation in UK and China. It continues to introduce some classic and practical investment theories and project analysis tools. Then, the applications of these approaches on the investment of eight types of electricity generation technologies in the UK and pulverised coal plant in China are given. The analysis results show evidences for several investment advices on microscopic viewpoint. These advices could help investors to more clearly make their investment decision on different types of power plant. From macroscopic viewpoint, the relationship among electricity consumption, economic growth and installed capacity in the UK and China are found by applying econometric approaches. The forecast of electricity consumption and GDP of China are also given. After this, the thesis takes into account the differences of economic growth and environment in different regions of China, and classifies China's provinces into four parts: Northeast, Coastal, Central and West. The relationship between electricity consumption and economic growth in China are determined based on provincial data and panel time series approaches. These results can help investors to fully understand the electric industry investment environment of China, which lead to some policy suggestions.
Resource Type
Date Created
  • 2012
Former identifier
  • 948168
Embargo Note
  • The electronic version of this thesis is currently under moratorium due to a licensing issue. If you are the author of this thesis, please contact the Library to resolve this issue.