# Evaluation of Investments in Wind Energy Projects, under Uncertainty. State of the Art Review
## 4 Results Analysis
### Studies with a Real Options Approach, Based on the Ends and Purposes of Its Application  
This article focuses on conducting a comprehensive analysis on the application of the real options approach to assess the feasibility of investments in wind energy generation projects. One of the main advantages is that it includes, by evaluating flexibility, the adjustments that the decision-maker must make when faced with uncertainty [127, 128]. Flexibility creates the possibility of having a range of alternatives, such as: (i) The option to postpone or defer an investment when future prospects are uncertain. It gives the holder the possibility to invest now, or to wait and acquire more information in order to assess the future conditions of the market. In the case of wind energy, it would mean postponing the construction and operation of a wind turbine until demand and prices for the technology are favorable. (ii) The option to modify the operating scale, or expanding the contract, shutting down and restarting, depending on whether market conditions turn favorable or unfavorable. A wind power plant can be expanded, downsized, even closed, depending on market conditions. (iii) The option to quit when the company observes that market conditions are becoming unfavorable. Wind energy projects are subject to changes in regulations, market conditions, and technology. (iv) The option to change, which gives the flexibility to enter and exit depending on market conditions being more favorable, important for the survival of the company. Companies have the option of deciding whether to use the land for agricultural production or to use it for wind power generation. (v) The option to grow, consisting of acquiring or developing a capacity, in anticipation, that will serve to better take advantage of future growth opportunities [58, 76]. (vi) The compound option, when, at the end of an investment stage, it is possible to decide whether to stop or defer the start of the next stage. That is, the underlying asset becomes the next option [129]. Of the 97 studies included in Table 2, 31 use real options to evaluate investment in wind systems. Initially, an analysis was made based on the purposes of its application, finding various trends which were grouped into seven categories:  
(1) Evaluation of wind energy generation project or investment, (2) Evaluation of energy auctions, portfolios, and energy market investments, (3) Evaluation of renewable energy technologies, (4) Evaluation of the impact of regulatory policies on wind energy projects, (5) Evaluation of wind energy systems, (6) Evaluation of wind resources, and (7) Evaluation of design, size, and location of wind farm projects, shown in Table 3.  
In Figure 3, the purposes of the studies evaluated using the options approach are observed. \begin{table}
\begin{tabular}{l l} \hline \hline
**Purpose** & **Authors (Years)** \\ \hline Evaluation of wind energy generation project or investment & [31, 56, 72, 75, 77, 99, 100, 106, 117, 119, 123, 124, 125]. \\ Evaluation of energy auctions, portfolios, and energy market investments & [31, 57, 58, 86, 106, 108, 122, 126]. \\ Evaluation of renewable energy technologies & [32, 58, 76]. \\ Evaluation of the impact of regulatory policies on wind energy projects & [32, 55, 73, 74, 91, 92, 107, 111, 126]. \\ Evaluation of wind energy systems & [86, 109, 114]. \\ Evaluation of wind resources & [116]. \\ Evaluation of design, size, and location of wind farm projects & [109, 116]. \\ \hline \hline \end{tabular} Source: the authors.  
\end{table} 
Table 3: Investigations according to the purpose of the application in the framework of the real options approach. The evaluation of wind energy generation project or investment includes research aimed at optimally evaluating investments from the perspective of the decentralized generation of energy or the viability of projects for the construction of wind farms, is the one of greatest interest by researchers, with the participation of 13 studies.