Investing in Time-to-Build Projects With Uncertain Revenues and Costs: A Real Options Approach

Lagging public-sector investment in infrastructure and the deregulation of many industries mean that the private sector has to make decisions under multiple sources of uncertainty. We analyze such investment decisions by accounting for both multiple sources of uncertainty and the time-to-build aspect. The latter feature arises in the energy and transportation sectors, because investors can decide the rate at which the project is completed. Furthermore, two explicit sources of uncertainty represent the discounted cash inflows and outflows of the completed project. We use a finite-difference scheme to solve numerically the option value and the optimal investment threshold. Somewhat counterintuitively, with a relatively long time to build, a reduction in the growth rate of the discounted operating cost may actually lower the investment threshold. This is contrary to the outcome when the stepwise aspect is ignored in a model with uncertain price and cost. Hence, research and development efforts to enhance emerging technologies may be more relevant for infrastructure projects with long lead times

How Much Is Enough? Optimal Support Payments in a Renewable-Rich Power System

The large-scale deployment of intermittent renewable energy sources may cause substantial power imbalance. Together with the transmission grid congestion caused by the remoteness of these sources from load centers, this creates a need for fast-adjusting conventional capacity such as gas-fired plants. However, these plants have become unprofitable because of lower power prices due to the zero marginal costs of renewables. Consequently, policymakers are proposing new measures for mitigating balancing costs and securing supply. In this paper, we take the perspective of the regulator to assess the effectiveness of support payments to flexible generators. Using data on the German power system, we implement a bi-level programming model, which shows that such payments for gas-fired plants in southern Germany reduce balancing costs and can be used as part of policy to integrate renewable energy

Market Power with Combined Heat and Power Production in the Nordic Energy System

The trend toward increasing energy efficiency and variable renewable energy (VRE) production has implications for combined heat and power (CHP) plants, which operate in both the price-driven power market and the district heating (DH) sector. Since CHP will be important in VRE integration, we develop a complementarity model to analyze CHP producers' roles in integrated markets. We use a Nordic case study to gain insights into (i) the effect of the link between CHP and DH on market power and (ii) market power's impact on operations in the DH sector. The results indicate that (i) the link of CHP to DH supply can increase market power and (ii) market power can induce shifts in DH production from heat-only to CHP

Market Impacts of Energy Storage in a Transmission-Constrained Power System

—Environmental concerns have motivated governments in the European Union and elsewhere to set ambitious targets for generation from renewable energy (RE) technologies and to offer subsidies for their adoption along with priority grid access. However, because RE technologies like solar and wind power are intermittent, their penetration places greater strain on existing conventional power plants that need to ramp up more often. In turn, energy storage technologies, e.g., pumped hydro storage or compressed air storage, are proposed to offset the intermittency of RE technologies and to facilitate their integration into the grid. We assess the economic and environmental consequences of storage via a complementarity model of a stylized Western European power system with market power, representation of the transmission grid, and uncertainty in RE output. Although storage helps to reduce congestion and ramping costs, it may actually increase greenhouse gas emissions from conventional power plants in a perfectly competitive setting. Conversely, strategic use of storage by producers renders it less effective at curbing both congestion and ramping costs, while having no net overall impact on emissions

Does Renewable Energy Generation Decrease the Volatility of Electricity Prices? An Analysis of Denmark and Germany

Although variable renewable energy (VRE) technologies with zero marginal costs decrease electricity prices, the literature is inconclusive about how the resulting shift in the supply curves impacts price volatility. Because the flexibility to respond to high peak and low off-peak prices is crucial for demand-response applications and may compensate for the losses of conventional generators caused by lower average prices, there is a need to understand how the penetration of VRE affects volatility. In this paper, we build distributed lag models with Danish and German data to estimate the impact of VRE generation on electricity price volatility. We find that in Denmark wind power decreases the daily volatility of prices by flattening the hourly price profile, but in Germany it increases the volatility because it has a stronger impact on off-peak prices. Our analysis suggests that access to flexible generation capacity and wind power generation patterns contribute to these differing impacts. Meanwhile, solar power decreases price volatility in Germany. By contrast, the weekly volatility of prices increases in both areas due to the intermittency of VRE. Thus, policy measures for facilitating the integration of VRE should be tailored to such region-specific patterns

Fostering breakthrough technologies -- How do optimal funding decisions depend on evaluation accuracy?

There is a growing interest in fostering breakthrough technologies that offer exceptionally high value to society. However, when starting technology projects, it is impossible to know which of them have the potential to lead to breakthroughs. Therefore, organizations have adopted funding policies in which on-going projects are subjected to interim evaluations based on which some projects may be abandoned to release resources for seizing new opportunities. In this paper, we study which funding policies are optimal when the objective is either (i) to maximize the expected value of the project portfolio, or (ii) to maximize the expected number of exceptionally excellent projects that may lead to breakthrough technologies. We show that the optimal policy for funding exceptionally excellent projects is to start a large number of projects and abandon a high proportion of them later, whereas the optimal policy for maximizing the expected value of the project portfolio is to grant long-term funding to a smaller set of projects based on initial evaluation. Furthermore, we show how the trade-off between these two objectives depends on the initial project evaluation accuracy and the rate at which this accuracy improves. Our results suggest that this trade-off is particularly significant when the initial project evaluations are very uncertain but become more accurate soon after the projects have been launched. In such a setting, policies that seek to maximize the expected portfolio value may fail to promote breakthrough technologies

Nonlinear vortex light beams supported and stabilized by dissipation

We describe nonlinear Bessel vortex beams as localized and stationary solutions with embedded vorticity to the nonlinear Schr\"odinger equation with a dissipative term that accounts for the multi-photon absorption processes taking place at high enough powers in common optical media. In these beams, power and orbital angular momentum are permanently transferred to matter in the inner, nonlinear rings, at the same time that they are refueled by spiral inward currents of energy and angular momentum coming from the outer linear rings, acting as an intrinsic reservoir. Unlike vortex solitons and dissipative vortex solitons, the existence of these vortex beams does not critically depend on the precise form of the dispersive nonlinearities, as Kerr self-focusing or self-defocusing, and do not require a balancing gain. They have been shown to play a prominent role in "tubular" filamentation experiments with powerful, vortex-carrying Bessel beams, where they act as attractors in the beam propagation dynamics. Nonlinear Bessel vortex beams provide indeed a new solution to the problem of the stable propagation of ring-shaped vortex light beams in homogeneous self-focusing Kerr media. A stability analysis demonstrates that there exist nonlinear Bessel vortex beams with single or multiple vorticity that are stable against azimuthal breakup and collapse, and that the mechanism that renders these vortexes stable is dissipation. The stability properties of nonlinear Bessel vortex beams explain the experimental observations in the tubular filamentation experiments.Comment: Chapter of boo

Genome-Wide Association Study Implicates Atrial Natriuretic Peptide Rather Than B-Type Natriuretic Peptide in the Regulation of Blood Pressure in the General Population

Background—Cardiomyocytes secrete atrial natriuretic peptide (ANP) and B-type natriuretic peptide (BNP) in response to mechanical stretching, making them useful clinical biomarkers of cardiac stress. Both human and animal studies indicate a role for ANP as a regulator of blood pressure with conflicting results for BNP.Methods and Results—We used genome-wide association analysis (n=6296) to study the effects of genetic variants on circulating natriuretic peptide concentrations and compared the impact of natriuretic peptide–associated genetic variants on blood pressure (n=27 059). Eight independent genetic variants in 2 known (NPPA-NPPB and POC1B-GALNT4) and 1 novel locus (PPP3CC) associated with midregional proANP (MR-proANP), BNP, aminoterminal proBNP (NT-proBNP), or BNP:NT-proBNP ratio. The NPPA-NPPB locus containing the adjacent genes encoding ANP and BNP harbored 4 independent cis variants with effects specific to either midregional proANP or BNP and a rare missense single nucleotide polymorphism in NT-proBNP seriously altering its measurement. Variants near the calcineurin catalytic subunit gamma gene PPP3CC and the polypeptide N-acetylgalactosaminyltransferase 4 gene GALNT4 associated with BNP:NT-proBNP ratio but not with BNP or midregional proANP, suggesting effects on the post-translational regulation of proBNP. Out of the 8 individual variants, only those correlated with midregional proANP had a statistically significant albeit weak impact on blood pressure. The combined effect of these 3 single nucleotide polymorphisms also associated with hypertension risk (P=8.2×10−4).Conclusions—Common genetic differences affecting the circulating concentration of ANP associated with blood pressure, whereas those affecting BNP did not, highlighting the blood pressure–lowering effect of ANP in the general population.</div

Central European Vaccination Advisory Group (CEVAG) guidance statement on recommendations for influenza vaccination in children

<p>Abstract</p> <p>Background</p> <p>Influenza vaccination in infants and children with existing health complications is current practice in many countries, but healthy children are also susceptible to influenza, sometimes with complications. The under-recognised burden of disease in young children is greater than in elderly populations and the number of paediatric influenza cases reported does not reflect the actual frequency of influenza.</p> <p>Discussion</p> <p>Vaccination of healthy children is not widespread in Europe despite clear demonstration of the benefits of vaccination in reducing the large health and economic burden of influenza. Universal vaccination of infants and children also provides indirect protection in other high-risk groups in the community. This paper contains the Central European Vaccination Advisory Group (CEVAG) guidance statement on recommendations for the vaccination of infants and children against influenza. The aim of CEVAG is to encourage the efficient and safe use of vaccines to prevent and control infectious diseases.</p> <p>Summary</p> <p>CEVAG recommends the introduction of universal influenza vaccination for all children from the age of 6 months. Special attention is needed for children up to 60 months of age as they are at greatest risk. Individual countries should decide on how best to implement this recommendation based on their circumstances.</p

Flexible prey handling, preference and a novel capture technique in invasive, sub-adult Chinese mitten crabs

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