This paper investigates the potential of owning renewable energy technologies to mitigate risk faced by the electric utility industry. It considers the effect of market structure on the plant ownership decision and how the attributes of renewable energy technologies can help to manage risk. Explicit consideration is given to the renewable energy technology's attributes of fuel costs, environmental costs, modularity, lead time, location flexibility, availability, initial capital costs, and

more »

... ment reversibility. It concludes that renewable energy technologies, particularly the modular technologies such as photovoltaics and wind, have the potential to provide decision makers with physical risk-management investments.