Preprint Article Version 1 This version not peer reviewed

Small Scale Hydroelectric Power Plants in Norway. Some Microeconomic and Environmental Considerations

Version 1 : Received: 4 May 2017 / Approved: 5 May 2017 / Online: 5 May 2017 (05:32:02 CEST)

A peer-reviewed article of this Preprint also exists.

Idsø, J. Small Scale Hydroelectric Power Plants in Norway. Some Microeconomic and Environmental Considerations. Sustainability 2017, 9, 1117. Idsø, J. Small Scale Hydroelectric Power Plants in Norway. Some Microeconomic and Environmental Considerations. Sustainability 2017, 9, 1117.

Journal reference: Sustainability 2017, 9, 1117
DOI: 10.3390/su9071117

Abstract

The development of small scale hydroelectric power plants in Norway is determined by natural conditions, policies, attitudes and property rights. The owner of the river is the central decision maker. It is he who decides whether he will develop the power plant himself, Whether he wants to enter into a contract with an external investor and let him develop the power plant, whether he will sell his property rights or postpone the decisions. All available choices will involve risk. In order for him to make the best choice he must find the certainty equivalent to each of the choices and choose the one with the highest certainty equivalent. This is the first time the utility theory of John von Neumann and Oskar Morgenstern has been applied to decision makers in the hydro power industry in Norway.

Subject Areas

small scale hydroelectric power; neumann-mortenstern utility theory; environmental effects of hydro power; hydropower and risk

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