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Article
Publication date: 5 June 2017

Alexander von Selasinsky, Daniel Kurt Josef Schubert, Thomas Meyer and Dominik Möst

The paper aims to analyse whether experiencing a supply interruption affects the valuation of security of electricity supply.

Abstract

Purpose

The paper aims to analyse whether experiencing a supply interruption affects the valuation of security of electricity supply.

Design/methodology/approach

A blackout in Munich, Germany, in November 2012 is utilised as a natural experiment by conducting a contingent valuation survey around two months after the event. The characteristics of the supply interruption allow for distinguishing between households that were affected by the blackout and those who were not. This provides the opportunity to compare the willingness to pay (WTP) for avoiding and the willingness to accept (WTA) for enduring a supply interruption between affected and non-affected Munich households.

Findings

The results show that households who were affected by the outage had a higher WTP for avoiding a hypothetical supply interruption. Although affected households also had a higher WTA for enduring an outage, the WTA-differences between the two groups are not statistically significant. Furthermore, the results indicate that experience with power outages can increase the perceived relevance of the policy objective “security” at the expense of the objective “environmental sustainability”.

Originality/value

The paper contributes to the literature in three general respects. First, the assessment of the relationship between outage experience and the valuation of supply security is based on a natural experiment which avoids most of the shortcomings of previous studies. Second, the paper uses both the WTP and the WTA measure to approximate the valuation of supply security and discusses the differences in their outcomes. Third, these monetary valuations are complemented and compared with general attitudes towards a reliable electricity system.

Details

International Journal of Energy Sector Management, vol. 11 no. 2
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 5 June 2017

Hasan Alma and Mehmet Baha Karan

This paper is aimed to evaluate recently privatized 18 electricity distribution and retail companies, using the data and conditions at the time they were privatized. The…

Abstract

Purpose

This paper is aimed to evaluate recently privatized 18 electricity distribution and retail companies, using the data and conditions at the time they were privatized. The main hypothesis of the study is that most of the privatized companies in this research are underpriced similar to previous experiences in developed and emerging economies.

Design/methodology/approach

Values of the companies are calculated considering the formal procedures of Turkish energy authorities. These companies are valued under the base, moderate and extreme scenarios created from different sets of assumptions considering conditions and existing data at the time they were privatized. Discounted cash flows (DCF) methodology is used in the estimations. The market prices obtained in their privatization tenders are compared with those theoretically calculated values (intrinsic prices).

Findings

The findings reject the hypothesis and indicate an overpricing in general in the privatizations of Turkey. Even the extreme scenario which gives the highest intrinsic values supports the findings.

Research limitations/implications

Research is limited with 18 regional electricity distribution company in Turkey.

Originality/value

The paper is one of the initial empirical studies on the valuation of energy companies using DCF methodology in an emerging market.

Details

International Journal of Energy Sector Management, vol. 11 no. 2
Type: Research Article
ISSN: 1750-6220

Keywords

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Article
Publication date: 3 May 2016

Paul Simshauser, Leonard Smith, Patrick Whish-Wilson and Tim Nelson

The purpose of this article is to analyse electricity supply in the Solomon Islands face extraordinarily expensive electricity tariffs – currently set at 96 c/kWh – making…

Abstract

Purpose

The purpose of this article is to analyse electricity supply in the Solomon Islands face extraordinarily expensive electricity tariffs – currently set at 96 c/kWh – making them amongst the highest in the world. Power is supplied by a fleet of diesel generators reliant on imported liquid fuels. In this article, the authors model the 14,100 kW power system on the island of Guadalcanal and demonstrate that by investing in a combination of hydroelectric and solar photovoltaic generating capacity, power system costs and reliability can be improved marginally. However, when the authors model a 3-Party Covenant (3PC) Financing structure involving a credit wrap by the Commonwealth of Australia, electricity production costs fall by 50 per cent, thus resulting in meaningful increases in consumer welfare.

Design/methodology/approach

This study’s approach uses an integrated levelised cost of electricity model and dynamic partial equilibrium power system model. Doing so enables the authors to quickly analyse the rich blend of fixed, variable and sunk costs of generating technology options. The authors also focus on the cost of capital that is likely to be achieved under various policy settings.

Findings

The authors find that a 3PC Financing policy can substantially reduce the production costs associated with capital-intensive power projects in an unrated sovereign nation. Such a policy and associated prescriptions are not specific to the Solomon Islands or power generation. The conceptual framework and associated financial logic that underpins the initiative can be generalised to other “user pays” infrastructure projects and to other developing nations. The broad applicability of 3PC financing means that it is not country specific, project specific or asset class specific.

Research Limitations/implications

It is important to note that the analysis in this paper has a number of limitations in that the authors do not deal with rural electrification or distribution network costs. The focus of this paper is to identify policy interventions that are capable of making profound changes to the cost and the reliability of wholesale electricity production.

Originality/value

The focus of this paper is to identify a policy intervention capable of making profound changes to the cost and the reliability of wholesale electricity production. While there is nothing novel associated with a 3PC Financing per se, the authors are unaware of its direct use as a form of delivering foreign aid. A 3PC Financing has the effect of shifting the source of aid funding from fiscal account surplus/deficit (i.e. cash outlays) to balance sheet (i.e. credit wrap). However, this is not a “magic pudding” – 3PC Financing creates an asset-backed contingent liability and will have the effect of reducing the donor country’s own debt capacity by a commensurate amount, holding the nation’s credit rating constant.

Details

Journal of Financial Economic Policy, vol. 8 no. 2
Type: Research Article
ISSN: 1757-6385

Keywords

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Article
Publication date: 6 May 2014

Paul Simshauser and Jude Ariyaratnam

This paper aims to present a multi-period dynamic power project financing model to produce pragmatic estimates of benchmark wholesale power prices based on the principles…

Abstract

Purpose

This paper aims to present a multi-period dynamic power project financing model to produce pragmatic estimates of benchmark wholesale power prices based on the principles of normal profit. This, in turn, can guide policymakers as to whether price spikes or bidding above marginal cost in wholesale electricity markets warrants any investigation at all. One of the seemingly complex areas associated with energy-only wholesale electricity pools is at what point market power abuse is present on the supply side. It should not be this way. If a theoretically robust measure of normal profit exists, identification of potential market power abuse is straightforward. Such a definition readily exists and can be traced back to the ground-breaking work of financial economists in the 1960s.

Design/methodology/approach

Using a multi-period dynamic power project model, the authors produce pragmatic and theoretically robust measures of normal profit for project financed plant and plant financed on balance sheet. These model results are then integrated into a static partial equilibrium model of a power system. The model results are in turn used to guide policymaking on generator bidding in energy-only power markets.

Findings

Under conditions of perfect plant availability and divisibility with no transmission constraints, energy-only markets result in clearing prices which are not economically viable in the long run. Bidding must, therefore, deviate from strict short-run marginal cost at some stage. To distinguish between quasi-contributions to substantial sunk costs and market power abuse, a pragmatic and robust measure of normal profit is required.

Originality/value

This article finds policymakers can be guided by an ex-post analysis of base energy prices against pragmatic estimates for the long-run marginal cost of the base plant, and an ex-ante analysis of call option prices along the forward curve against pragmatic estimates of the carrying cost of the peaking plant.

Details

Journal of Financial Economic Policy, vol. 6 no. 2
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 1 January 1947

IT is unfortunate that the date of the 17th Salon de l'Aeronautique made it impossible to include a review of it in the December issue of AIRCRAFT ENGINEERING, although…

Abstract

IT is unfortunate that the date of the 17th Salon de l'Aeronautique made it impossible to include a review of it in the December issue of AIRCRAFT ENGINEERING, although perhaps its consideration in retrospect may be of rather greater value.

Details

Aircraft Engineering and Aerospace Technology, vol. 19 no. 1
Type: Research Article
ISSN: 0002-2667

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Article
Publication date: 25 February 2014

Yusen Xu and Xiaofang Hua

With the development of economic globalization and the growth of cross-border technology flow, the internationalization of innovation has become an important strategy for…

Abstract

Purpose

With the development of economic globalization and the growth of cross-border technology flow, the internationalization of innovation has become an important strategy for enterprises in global competition for both investment optimization and technological advancement. The purpose of this paper is to reveal the research evolution in internationalization of innovation, investigate the hot spot transformation, and predict the future research trends.

Design/methodology/approach

The main research approaches in this study are literature co-citation analysis and keyword co-occurrence analysis. Co-citation is applied as a semantic similarity measure for related papers that makes use of citation relationships. Co-occurrence frequency analysis of keywords is also carried out to reveal the hot spots in research of internationalization of innovation. With the data downloaded from Web of Science, Citespace was used as a tool of scientometrics to visualize the node papers, knowledge mapping and keyword co-occurrence ranking in different stages of research evolution. The literature being analyzed in this study come from paper collection by searching the titles, abstracts and keywords, for terms that include “international innovation”, “international R&D”, “international technology”, “globalizational innovation”, “globalizational R&D”, “globalizational technology”, “multinational innovation”, “multinational R&D” and “multinational technology”.

Findings

The investigation reveals that there are two distinct stages in research evolution of the internationalization of innovation. The direction of innovation diffusion has turned from “one-way trickle down from developed countries” to “two-way interaction between developed countries and emerging countries”. Meanwhile, the research hotspots have been transformed since 2000 from “detail and operation-focused” to “profound and strategy-focused”.

Originality/value

The paper gives an insight into the internationalization of innovation field using literature from the Web of Science as an illustration.

Details

Journal of Science and Technology Policy Management, vol. 5 no. 1
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 24 August 2020

Jason D. Lloyd and David W. Oakley

The purpose of this study is to evaluate the increase in suicide rates for Kansas residents, as well as quantify the difference in suicide rates between men and women…

Abstract

Purpose

The purpose of this study is to evaluate the increase in suicide rates for Kansas residents, as well as quantify the difference in suicide rates between men and women across the State of Kansas.

Design/methodology/approach

To evaluate increases in suicide rates, a joinpoint regression analysis was conducted to calculate the annual percentage change in suicide rates. To evaluate differences between sex characteristics, a one-way analysis of variance was conducted.

Findings

Results of a joinpoint regression analysis found that the annual percentage change in the suicide rates of Kansas did increase significantly between 2009 and 2018. Furthermore, the rate of suicide increase among women was greater than the suicide rate increases of men.

Originality/value

The value of this study provides context to the suicide literature that could allow for better local and statewide policy decisions.

Details

Journal of Public Mental Health, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5729

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Article
Publication date: 30 September 2020

Martin Loosemore, George Denny-Smith, Jo Barraket, Robyn Keast, Daniel Chamberlain, Kristy Muir, Abigail Powell, Dave Higgon and Jo Osborne

Social procurement policies are an emerging policy instrument being used by governments around the world to leverage infrastructure and construction spending to address…

Abstract

Purpose

Social procurement policies are an emerging policy instrument being used by governments around the world to leverage infrastructure and construction spending to address intractable social problems in the communities they represent. The relational nature of social procurement policies requires construction firms to develop new collaborative partnerships with organisations from the government, not-for-profit and community sectors. The aim of this paper is to address the paucity of research into the risks and opportunities of entering into these new cross-sector partnerships from the perspectives of the stakeholders involved and how this affects collaborative potential and social value outcomes for intended beneficiaries.

Design/methodology/approach

This case study research is based on a unique collaborative intermediary called Connectivity Centre created by an international contractor to coordinate its social procurement strategies. The findings draw on a thematic analysis of qualitative data from focus groups with 35 stakeholders from the construction, government, not-for-profit, social enterprise, education and employment sectors.

Findings

Findings indicate that potentially enormous opportunities which social procurement offers are being undermined by stakeholder nervousness about policy design, stability and implementation, poor risk management, information asymmetries, perverse incentives, candidate supply constraints, scepticism, traditional recruitment practices and industry capacity constraints. While these risks can be mitigated through collaborative initiatives like Connectivity Centres, this depends on new “relational” skills, knowledge and competencies which do not currently exist in construction. In conclusion, when social procurement policy requirements are excessive and imposed top-down, with little understanding of the construction industry's compliance capacity, intended social outcomes of these policies are unlikely to be achieved.

Originality/value

This research draws on theories of cross-sector collaboration developed in the realm of public sector management to address the lack of research into how the new cross-sector partnerships encouraged by emerging social procurement policies work in the construction industry. Contributing to the emerging literature on cross-sector collaboration, the findings expose the many challenges of working in cross-sector partnerships in highly transitionary project-based environments like construction.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 18 September 2017

George Denny-Smith and Martin Loosemore

The purpose of this paper is to explore the barriers to entry for Indigenous businesses into the Australian construction industry.

Abstract

Purpose

The purpose of this paper is to explore the barriers to entry for Indigenous businesses into the Australian construction industry.

Design/methodology/approach

A national survey was conducted with 33 Indigenous businesses operating in the Australian construction industry.

Findings

The findings show that Indigenous enterprises face similar challenges to many small non-Indigenous enterprises wishing to enter the industry. These include adjusting to unique construction industry cultures and practices, breaking into existing business networks and building social capital and being under-cut by industry incumbents and competitors when tendering for projects. These barriers are similar to those faced by other non-Indigenous social enterprises, although Indigenous enterprises do appear to experience relatively greater difficulty in starting-up their businesses and in securing sufficient capital, finance and assistance to enable them to scale-up and tender for normal work packages at a competitive price.

Research limitations/implications

The results are limited to Australian Indigenous businesses. The survey does not allow a comparison of non-Indigenous and Indigenous businesses, although comparison of results with existing non-Indigenous research into small to medium-sized firms in construction does allow some tentative insights. These need to be explored further.

Practical implications

These results indicate that there are significant barriers to be addressed within the Australian construction industry if government indigenous procurement policies are to achieve their stated aims of increasing the number of Indigenous firms in the industry. The results also have important implications for Indigenous businesses and for non-Indigenous firms operating in the Australian construction industry.

Social implications

This is an important gap in knowledge to address if countries like Australia are to redress the significant inequalities in income and health suffered by Indigenous populations.

Originality/value

In countries like Australia, with significant Indigenous populations, governments are seeking to address persistent disadvantage by using new social procurement initiatives to create quasi construction markets for Indigenous enterprises to participate in the construction industry. While there is an emerging body of research into the barriers facing mainstream small to medium-sized enterprises and, to a lesser extent, social enterprises in construction, the barriers to entry facing Indigenous construction enterprises have been largely ignored.

Details

Engineering, Construction and Architectural Management, vol. 24 no. 5
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 18 January 2016

Graeme Bowles and James Morgan

The purpose of this paper is to understand the factors relating to the implementation of a new procurement initiative that affect performance and value for money (VFM)…

Abstract

Purpose

The purpose of this paper is to understand the factors relating to the implementation of a new procurement initiative that affect performance and value for money (VFM). The study is based on a four-year research project carried out on behalf of the Scottish Government to monitor and evaluate the performance and efficiency of a bulk procurement vehicle for social housing.

Design/methodology/approach

The researchers had a brief to monitor and evaluate the implementation of the procurement process and its influence on cost and efficiency targets. The study employed a mixed method approach with annual rounds of qualitative and quantitative data collection from project stakeholders including the contractors, consultants, clients and sponsor. Confidential semi-structured interviews were conducted on conclusion of the project to gauge views on how well the procurement process worked from the various perspectives and to reflect on the influence of the process on VFM.

Findings

The procurement programme failed to achieve the capital cost and efficiency savings targets quantified at the outset and on this measure alone VFM was not demonstrated, although there were a number of reported benefits. A major factor was the extent of process and behavioural change required from the project team and, although a procurement consultant was engaged to facilitate this, the theoretical benefits of “best practice” were not realized. The picture was further complicated by rapidly changing economic conditions experienced, and debate about the robustness of original cost savings targets.

Research limitations/implications

The findings and conclusions are of relevance and interest to clients and construction organisations undergoing change through adopting novel procurement processes.

Originality/value

The empirical nature of the study provides a comprehensive evidence base for the performance of a collaborative procurement programme and an understanding of the potential difficulties in attaining the theoretical benefits of procurement innovation.

Details

Engineering, Construction and Architectural Management, vol. 23 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

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