{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,3,20]],"date-time":"2026-03-20T15:18:57Z","timestamp":1774019937994,"version":"3.50.1"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":24,"publisher":"Elsevier BV","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>The increasing uncertainty associated with electrification and supply-chain volatility challenges the deterministic valuation of flexibility services (FS) in distribution network planning. While counterfactual framework, previously developed by the authors, assess FS as substitutes for capital reinforcement using discounted cash-flow methods, they do not capture the strategic value of deferring sunk investments under uncertainty. This paper extends the deterministic counterfactual valuation by modelling flexibility as a real option embedded in the deferral decision. Building on the Cox-Ross-Rubinstein binomial model, this framework quantifies the additional value arising from uncertainty in both demand growth and investment costs, while preserving economic consistency through a no-arbitrage condition. An illustrative use case based on a real-world flexibility example shows that incorporating the option premium increases the flexibility value by 33% relative to the deterministic benchmark. The results demonstrate that flexibility generates not only reliability benefits but also intertemporal value by improving investment timing under uncertainty. The proposed framework provides a transparent and regulatorily consistent basis for integrating FS into distribution network planning.<\/jats:p>","DOI":"10.2139\/ssrn.6446220","type":"posted-content","created":{"date-parts":[[2026,3,20]],"date-time":"2026-03-20T13:49:00Z","timestamp":1774014540000},"source":"Crossref","is-referenced-by-count":0,"title":["Unlocking Flexibility Value Under Uncertainty: A Real Options Approach to Distribution Network Planning \u200b"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0009-0008-2356-5967","authenticated-orcid":true,"given":"Ricardo  Galhardas","family":"Messias","sequence":"first","affiliation":[]},{"ORCID":"https:\/\/orcid.org\/0000-0001-5472-7617","authenticated-orcid":true,"given":"Pedro  MS","family":"Carvalho","sequence":"additional","affiliation":[]},{"ORCID":"https:\/\/orcid.org\/0000-0002-1110-6586","authenticated-orcid":true,"given":"Jorge","family":"Sousa","sequence":"additional","affiliation":[]}],"member":"78","reference":[{"key":"ref1","author":"Ec","year":"2025","journal-title":"European Grids Package"},{"key":"ref2","doi-asserted-by":"crossref","first-page":"331","DOI":"10.1016\/j.epsr.2016.03.017","article-title":"Economic benefits of integrating Active Demand in distribution network planning: A Spanish case study","volume":"136","author":"M Vall\ufffds","year":"2016","journal-title":"Electr. 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