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Valuation of A Green & Yellow Hydrogen Plant In Brazil
The objective of this article is to propose a Real Options approach to the specific situation that will very probably develop in Brazil in the new few years with a significant green energy surplus and give to Green Hydrogen (GH2) producers an opportunity or real option to get access to GH2 production on a massive scale at a competitive price and steady supply. One possible outcome of such a scenario is the regulator exempting this GH2 production of the so-called Wire Cost (TUST) as it is intended not for consumption but for renewable storage through GYH2 production. We model the gains expected to be obtained by H2 producers through two spark-spreads as switch options.