Addressing flexibility during process and infrastructure systems conceptual design: Real options perspective.

In highly complex and dynamic designs such as energy and industrial infrastructure designs, designers may not practically (within the available time limit), be able to assess all the uncertainties with all the needed precision required for optimal design decision analysis that could lead to flexible design outputs. Consequently, practical and realistic approaches are still needed for addressing such residual uncertainties early in the conceptual design phase of these interconnected and interdependent infrastructure systems networks. In this paper, the place of real-option analysis, which incorporates uncertainty in a theoretically consistent manner, in exploitatively handling these uncertainties during the infrastructure systems design, is addressed. We surmise that the adoption of the real options approach early in the conceptual design process can offer to the designer, extra degrees of freedom of systematically considering and designing system elements with the ability of reacting swiftly to the varying technical, economic and institutional dynamics of infrastructure systems.