This book examines what lies behind the uncertainties surrounding the fuel and power markets. Exploring the role of renewables and how they potentially disrupt or create opportunities, it challenges widely accepted wisdoms in investment. The author asks questions such as: Are “business as usual” strategies that favour fossil fuels the best route to future prosperity? What prospects do firms face when their competitors diversify into renewables? Why do generous subsidies to renewables often fail to achieve wide-scale deployment? Illustrating how real options and option games reasoning yield vastly different insights from those gained from NPVs, Energy Investments offers case studies and simulations to demonstrate how firms can benefit from the methods it showcases. “Ricardo Barcelona addresses the thornier issues of energy strategy. In this book he moves from the certainties assured by financial modelling to explore the tough questions that astute practitioners ask themselves – why do things never turn out as they were projected? Is energy strategy always going to be a tale of unfulfilled promises? His research findings and his insights make a must read for anyone in this field.” (Patrick H. “Paddy” Miller, Author, Innovation as Usual , Hong Kong) “The book offers rigour, depth, and relevance in tackling approaches that prove sustainable and transformational for business and society.” (Juan Miranda, Managing General Director, Asian Development Bank) “The book is timely in that it provides good insights on how to address the uncertainty and volatility facing today's energy markets. A good read for anyone involved in the energy sector.” (Stephen A. Paradies, Board Director, Union Bank, and former Chief Financial Officer, AboitizEquity Ventures, Philippines) “Containing original insights into the financing and economics of the energy industry, this book should be read by those working in and studying the future of the energy sector.” (David Parker, Emeritus Professor of Economics, Cranfield University School of Management, and former member, Competition Commission, United Kingdom) “The energy industry is at a crossroad. The paradigm is changing although the uncertainty around new technology and lack of clear orientation from policy and regulatory perspectives makes firms’ decision-making more complex. It also raises some expectations in our society that may not be delivered in the medium-term. Ricardo’s book offers a rigorous platform to better frame some energy decisions –both at the policy and the company levels - and offer consistent answers to this very relevant societal challenge.” (Jordi Canals, Dean Emeritus and Professor of IESE Business School, Spain/United States) “Shifting European Union policy, falling energy prices, and increased costs of production are cocktails that do not bode well for fossil fuel-based energy supplies. Renewables subsidies add to energy prices that burden citizens and industry. These circumstances push energy managers and policy-makers to seek innovative solutions to producing energy and financing investments. This book is a thoughtful contribution into addressing these issues – and resolving these dilemmas.” (Krzysztof Tchórzewski, Minister of Energy, Government of Poland) “Barcelona has performed the Herculean task of integrating several literature streams into a sound framework for energy finance practitioners. The idea of applying dynamic tools from modern finance theory to energy economics and policy is commendable.” (Dr Tarik Driouchi, Reader in Financial Management, King's College London, United Kingdom) “The author questions the accepted wisdoms of capital budgeting, propose an alternative, and made real options and option games as analytical tools accessible to managers. Real life cases illustrate the simplicity and power of the ideas behind the proposed framework.” (Bernardo M. Villegas, Co-founder, University of Asia and the Pacific, and former member, Constitutional Commission, Metro Manila, Philippines) “The book is of interest to policy makers, as it is one of the few available resources that has a practical take in clarifying how the energy business interacts within dynamic policy and market environments such as Indonesia. As policy makers, we have to pursue policies that seek to uplift our people's wellbeing. The Coal-Geothermal swap idea that Barcelona and Antonie de Wilde offer could pave the way to meeting Indonesia's energy needs, satisfies our Constitution's Article 33 that ensures our people benefits from our natural resources, while satisfying our environmental targets under COP 21.” (Dr Ir Montty Girianna, Deputy Minister in the Coordinating Ministry for Energy andMining, Government of Indonesia, Jakarta, Indonesia) “Instructive and timely, the book is a pragmatic and thoughtful read for energy practitioners and policy-makers at a time when uncertainty in the industry is certain.” (Raphael P. M. Lotilla, Independent Director, Trans-Asia Petrole