EXAIOSGlossary › Tipping distance (Kippdistanz)
Definition

Tipping distance (Kippdistanz)

How far the assumptions may deteriorate before a GO turns into a NO-GO.

Explanation

The tipping distance quantifies how robust an investment decision is: how much movement in power prices, interest rates or utilisation the project absorbs before it stops paying off. A wide tipping distance means a robust GO.

How it differs

Where a sensitivity analysis produces a table, the tipping distance condenses the risk into one number a decision can be made on.