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The energy sector is characterized by high capital requirements and market uncertainties. Traditional Discounted Cash Flow (DCF) and Net Present Value (NPV) methods fall short in modeling managerial flexibility for renewable energy investments, often underestimating project value. Real options theory addresses this by offering an analytical framework to measure flexibilities such as deferral. This article examines how a geothermal power plant (GPP) investment project with a negative NPV can become economically feasible through real options analysis. While the traditional NPV was found to be -654.394.201 TL, the inclusion of the deferral option increased the Expanded Net Present Value (ENPV) to +374.012.236 TL. The findings demonstrate that the real options approach provides a flexible investment evaluation by incorporating uncertainty and timing.
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