Sequential investment in renewable energy technologies under policy uncertainty

Although innovation and support schemes are among the main forces that drive investment in renewable energy (RE) technologies, both involve considerable uncertainty. We develop a real options framework to analyse the impact of technological, policy and electricity price uncertainty on the decision to invest sequentially in successively improved versions of a RE technology. Technological uncertainty is reflected in the random arrival of innovations, and policy uncertainty in the likely provision or retraction of a subsidy that takes the form of a fixed premium on top of the electricity price. We show that greater likelihood of subsidy retraction (provision) lowers (raises) the incentive to invest, and, by comparing a stepwise to a lumpy investment strategy, we show how an embedded option to adopt an improved technology version mitigates the impact of subsidy retraction on investment timing. Specifically, we show how stepwise investment facilitates earlier technology adoption compared to lumpy investment, and that, under stepwise investment, technological uncertainty accelerates technology adoption, thus further offsetting the incentive to delay investment in the light of subsidy retraction

Optimal Risk Adoption and Capacity Investment in Technological Innovations

Technological innovations often formulate new market regimes and create incentives to abandon existing, less attractive ones. However, this decision depends not only on market forces, such as economic and technological uncertainty, but also on attitudes toward risk. Although greater risk aversion typically raises the incentive to postpone investment, the impact of risk aversion becomes more complex when a firm has discretion over both the timing and the size of a project. We develop a utility-based regime-switching framework in order to analyze how a firm with discretion over investment timing and project scale may choose to abandon an existing market regime to enter a new one. Results indicate that greater risk aversion hastens investment in an existing regime by decreasing the amount of installed capacity, but delays its abandonment, thereby hindering the transition to a new one. In contrast, greater demand uncertainty in the new market regime raises the value of the investment opportunity and, in turn, the incentive to abandon the existing regime. Furthermore, we find that uncertainty over the arrival of a technological innovation may accelerate investment in the existing regime and reduce the relative loss in project value in the absence of managerial discretion over project scale

Robustness of common hemodynamic indicators with respect to numerical resolution in 38 middle cerebral artery aneurysms

Background: Using computational fluid dynamics (CFD) to compute the hemodynamics in cerebral aneurysms has received much attention in the last decade. The usability of these methods depends on the quality of the computations, highlighted in recent discussions. The purpose of this study is to investigate the convergence of common hemodynamic indicators with respect to numerical resolution. Methods: 38 middle cerebral artery bifurcation aneurysms were studied at two different resolutions (one comparable to most studies, and one finer). Relevant hemodynamic indicators were collected from two of the most cited studies, and were compared at the two refinements. In addition, correlation to rupture was investigated. Results: Most of the hemodynamic indicators were very well resolved at the coarser resolutions, correlating with the finest resolution with a correlation coefficient >0.95. The oscillatory shear index (OSI) had the lowest correlation coefficient of 0.83. A logarithmic Bland-Altman plot revealed noticeable variations in the proportion of the aneurysm under low shear, as well as in spatial and temporal gradients not captured by the correlation alone. Conclusion: Statistically, hemodynamic indicators agree well across the different resolutions studied here. However, there are clear outliers visible in several of the hemodynamic indicators, which suggests that special care should be taken when considering individual assessment

Interglacial History of a Palaeo-lake and Regional Environment: A Multi-proxy Study of a Permafrost Deposit from Bolshoy Lyakhovsky Island, Arctic Siberia

Chironomid, pollen, and rhizopod records from a permafrost sequence at the Bolshoy Lyakhovsky Island (New Siberian Archipelago) document the evolution of a thermokarst palaeo-lake and environmental conditions in the region during the Last Interglacial (MIS 5e, ca. 130120 ka). Open Poaceae and Artemisia associations dominated vegetation at the beginning of the interglacial period, ca. 130 ka. Rare shrub thickets (Salix, Betula nana, Alnus fruticosa) grew in more protected and wetter places as well. Saalian ice wedges started to melt during this time, resulting in the formation of an initial thermokarst water body. The high percentage of semi-aquatic chironomids suggests that a peatland-pool palaeo-biotope existed at the site, when initial water body started to form. A distinct decrease in semi-aquatic chironomid taxa and an increase in lacustrine ones point to a gradual pooling of water in basin, which could in turn create thaw a permanent pond during the subsequent period. The highest relative abundance of Chironomus and Procladius reflects an existence of unfrozen water remaining under the ice throughout the ice-covered period during the later stage of palaeo-lake development. Chironomid record points to three successive stages during the water body evolution: (1) a peatland pool; (2) a pond (i.e., less deep than the maximum ice-cover thickness); and (3) a shallow lake (i.e., more deep than the maximum ice-cover thickness). The evolutionary trend of palaeo-lake points to intensive thermokarst processes occurring in the region during the Last Interglacial. Shrub tundra communities with Alnus fruticosa, Betula nana dominated the vegetation during the interglacial optimum that is evidenced by pollen record. The climate was relatively moist and warm. The results of this study suggest that quantitative chironomid-based temperature reconstructions from the Arctic thermokarst ponds/lakes may be problematic owing to other key environmental factors, such as prolonged periods of winter anoxia and local hydrological/geomorphological processes, controlling the chironomid assemblage