...How Electricity Prices are affected by Inflation (A case study of Bangladesh) Introduction: Electricity prices are affected by inflation to increase day by day. Electricity price high is one of the greatest parts of our economic condition in our country. Raising electricity prices tend affect to overall consumer price index. If electricity price high it is also affected our household increase, companies usually chose to pass a those costs to their customers. Inflation: In simple language, inflation means rising prices and it shows the increase in cost of living. In economics, inflation is explained as rise in the general level of prices of goods and services in an economy over a period of time. With the rise in price levels a unit of currency will buy fewer goods and services. As a result, the purchasing power of money will be reduced with inflation. In other words the real value of money will be lost day by day along with inflation. Inflation is measured by the Rate of Inflation or Inflation Rate which is the percentage change in a general price index calculated as an annualized figure. Inflation Negative effects: • Decrease in the real value of money. • Unpredictable inflation rates. • Discourage investment and savings. • Add inefficiencies in the market. • Difficulties with budget and long-term planning for companies. • Hidden tax increase. • Demand of rapid wage increase • Causes Hyperinflations. Inflation Positive...
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...the general manager of Luotang Power, a coal-fired power plant located in central China. He should make a presentation to the Board of Directors of his parent company, China Hua Tong Power (HT Power). Tan knew that his company had performed well during that year, both plant availability and fuel economy improved over the previous year but it just didn’t show up in the financial report. Hubei Provincial Power Company (HPPC) was the primary customer of Luotang that had made a contract for a minimum annual purchase of total electricity of 3,000,000MWh every year. However, there had been limited opportunity to sell energy above the contractual minimum, either to HPPC or others. If the amount of sell would be reduced, the contract required that Luotang sell amounts in excess of minimum annual purchase at approximately 65% of regular price. Luotang also made a contract with coal supplier, Pingdingshan. The company had been successful at selling excess electricity to the power plant but over the past 12 months, demand has decreased. This happen because by falling revenues were concentrate by the high debt burden that the project carried, with approximately 80 percent of the initial construction cost being finance by debt. In this case of Luatong...
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...Introduction This case study Luotang Power: Variances Explained is mainly concerned with a study of variances that will show the changes in performance in the company and the external environment that is not within the power plant’s control. The Luotang Power Company (Luotang) is a 600 Mega Watt (MW) coal fired power plant located in the Hubei Province, China. Luotang first started in 1997, when the Provincial Planning Commission, working on behald of the Hubei Provincial Government, had solicited bids from international power developers to finance, design, build, and poerate a 600MW coal-fired power plant. The project was contracted on a Build Operate Transfer (BOT) Basis, that meant that the power plant would be given to the Hubei Provincial Government after 20 years of operation at no cost. Luotang was mainly rural in nature but development quickly increased when the power plant opened. Luotang is wholly owned by an American independent power producer. Luotang’s parent company is known as China Hua Tong Power (HT Power). It’s primary customer is the Hubei Provincial Power Company (HPPC) and their main coal supplier was the Pindingshan Coal Company (Pindingshan). Tan Min Yi has been the general manager of the Luotang Power Company since 2002. In this case study, it talks about how Tan has to make a presentation to the Board of Directors of Luotang’s parent company, that is HT Power about the results received in the 2011 Report of Operations. He is concerned about what...
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...BUSINESS STRATEGIES IN ELECTRICITY MARKETS Asko Vuorinen 1 Electricity markets Traditional electricity markets Competitive electricity markets Capacity markets Benchmarking 2 Traditional electricity markets 3 Market structure House Power plant TRANSMISSION NETWORK DISTRIBUTION NETWORK City Power plant Large building Distributed generation 4 Traditional electricity markets May have monopoly on all levels (UK before liberalisation) May have monopolies on the distribution level only (Nordic countries before liberalisation) Industrial consumers might produce their own electricity 5 Traditional electricity markets National monopoly National monoplies tend to increase their resources (people and capacity) put the all costs to their tariff base The planning is easier and can be made to minimize costs in the long term They tend to build more high investment cost plants, which have low fuel costs (nuclear and hydro) 6 Traditional electricity markets Competition in transmission network level Tends to keep the whole sale prices of electricity lower Tariff = Fc x P + Vc x E Where Fc = fixed costs of power plant (€/kW/month) P = capacity ordered by customer (kW) Vc = variable costs of power plant (€/MWh) E = electrical energy (MWh) 7 Traditional electricity markets competition in transmission network level There can be separate tariffs* for base load, intermediate load and peak load 1)Base load tariff could correspond...
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...Tong Power (“HT Power”), the following week about the most recent results and was concerned about their reaction to the disappointing results.2 Tan knew his company had performed well during the year. Both plant availability3 and fuel economy had improved over the previous year. Additionally the plant’s primary customer, the Hubei Provincial Power Company (“HPPC”), had met its contractual electricity purchase obligations for the year. However, there had been limited opportunity to sell energy above the contractual minimum, either to HPPC or others. Still, Tan felt that these factors were outside his control. His team had performed well—it just didn’t show up in the financial results. The scheduled presentation to the Board was important for two reasons. First, HT Power was considering a 2,000 MW expansion at Luotang. However, on a more personal note for Tan, he had been general manager of Luotang since 2002, and he hoped it would be time for a promotion. He hoped that HT Power would consider him for the company’s Executive Vice President position. He also knew how critical fuel price management was to HT Power’s success but wasn’t completely sure how well his team had managed this aspect of the business during the year. Would HT Power pass 1 One megawatt (MW) is equivalent to 1,000 kilowatts (KW). A one megawatt...
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...living in a home, the type of home environment, habits done that do not waste energy, and the green technologies already in use in ones home. The energy usage in my home is 36% less than the average 3-person home in the United States. My total usage of energy is about 14,978 kilowatt hours per year. For the carbon emissions of my family’s home, it is, in comparison to the average 3-person home in the United States, 27% less. My total emissions is around 15.92 tons of carbon dioxide per year (BP p.l.c, 2013). Although my energy usage and carbon emissions level are below the average American home, the impact my large carbon footprint has on the environment is still a great amount. A carbon footprint can be reduced through the usage of renewable energy sources, such as the most commonly used “green”...
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...The Brazilian electricity sector is many ways at the mercy of ANEEL. ANEEL sets tariffs throughout the country and works in the interest of end users. ANEEL’s tariff review process is very strict and is centered on operational efficiency. Such a focus on operational efficiency and cost reductions has intensified rivalry. Also, government incentives for producers of alternative energy may also contribute to levels of competition within the industry. Finally, lack of product differentiation in the utilities industry as a whole, along with the high fixed costs and exit costs, intensify rivalry. Threat of New Entrants: Low In the electricity market, operating and owning power generation facilities requires large financial outlay and intensive capital to set up and operate hundreds of power plants. Even though utility companies largely draw customers on price, which allows them to utilize price undercutting as an entry strategy, the competitive landscape in which these companies operate is difficult to penetrate, making entry difficult. Threat of Substitutes: Low Technically, there are almost no alternatives to electricity. Thus being said, there are different methods for producing electricity. For power generating companies within Brazil’s electricity industry, alternative forms of producing electricity pose a potential switching cost if the alternative forms eventually become operational norm. Of course, end consumers could turn self sufficient by use of solar power...
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...and Non-Renewable energy 1.2 Primary and Secondary Energy Primary energy sources are those that are either found or stored in nature. Common primary energy sources are coal, oil, natural gas, and biomass (such as wood). Other primary energy sources available include nuclear energy from radioactive substances, thermal energy stored in earth’s interior, and potential energy due to earth’s gravity. The major primary and secondary energy sources are shown in Figure 1.1 Primary energy sources are mostly converted in industrial utilities into secondary energy sources; for example coal, oil or gas converted into steam and electricity. Source Extraction Coal Processing Preparation Primary energy Coal Open or Deep Mines Secondary Energy Steam Thermal Purification Hydro Coke Nuclear Mining Enrichment Power Station Electricity Natural gas Gas Well Treatment Natural gas Thermal Petroleum Oil Well Cracking and Refining LPG Petrol...
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...Professor Jia Wu Group # 9 Yidi Zhang Hui Zhang Sanaz Zarghami Khosravi INTRODUCTION Zhouzhuang Wyndham Grand Plaza is a Chinese five-star luxury hotel, located in Zhouzhuang, a famous tourist resort. Its total area is 34,022 m2. According to a Chinese star hotel report, the average annual electricity consumption of a Chinese star hotel ranges from 100kwh/m2 to 200kwh/m2, ten times as the consumption of a common household. Compared to the population mean, our target hotel consumed about 130.34kwh/m2, which is a comparatively large consumption. The reason why we disregard other resources consumption, like water consumption, is that this hotel has installed facilities as their infrastructures for water use efficiency. The reason why the ballroom (which is mainly for accepting customers, holding banquets and arranging meeting and other versatile functions) is our target objective is that the ballroom has a high utilization rate compared with such like bedrooms and entertainment areas etc. Another reason is that the ballroom takes up the largest space among the single area in the hotel and the solar panels are going to be installed on the roof of the ballroom. As the electricity consumption varies from season to season in that during summers and winters, the peaks of consumption will occur, especially in the summer because the AC systems, including all refrigerating facilities, keep working for 24 hours. Meanwhile, considering different alternatives that may be used as the...
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... 3. Ubaid-ur-Rehman (3778) 4. Junaid Ghayoor Hussain (3780) 5. Muhammad Ansaar (3824) 6. Abdul Sami khan (3825) ABSTRACT Electricity Crisis in Pakistan is one of the severe challenges the country is facing today. Electricity is essential part of our daily life and its outage has severely affected the economy and overall living of ours. Thousands have lost their jobs, businesses; our daily life has become miserable. Pakistan is currently facing upto 18 hours of electricity outage a day, is expected to face more if not dealt with in time. The purpose of this study is to analyze the nature of this crisis and to propose some short-term as well as long-term solutions to this problem. This study is exploratory in nature. We have done our best to conclude and sketch up some recommendations in the light of identified hurdles in the way of implementing the appropriate solution to our problem. Our study finds some major wholes in our system if they are covered up we can not only overcome the deficiency of electricity in our systems but also we can be able to export it to our neighboring countries. The basic flaws that our study identified are related to circular debt, and the inadequate capacity of our electricity production and distribution systems. Also we emphasized on some prospective alternatives to our electricity production that are cheaper and they provide more clean electric energy as compared to fossil fuel run energy plants. INTRODUCTION * Background...
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...manufacture panels that are differentiated both vertically and horizontally, and compete by setting quantities. The equilibrium of the model is consistent with a set of stylized facts that we document, including variation in prices, markups and market shares across firms. We calibrate the model using a new dataset data on prices, costs and shipments of leading solar companies, as well as solar sales in four leading markets. The calibrated model is applied to evaluate the impact of a decline in the price of polysilicon, a key raw material used in the manufacture of solar panels, on the equilibrium price of solar panels. © 2013 Elsevier B.V. All rights reserved. Article history: Received 12 June 2012 Received in revised form 14 May 2013 Accepted 20 May 2013 Available online 14 June 2013 JEL classification: L19 Ł13 O30 Keywords: Photovoltaics Competition Polysilicon 1. Introduction The electricity generation sector is the leading contributor of greenhouse gas emissions. Most plans to stabilize greenhouse gas emissions view solar photovoltaics as an electricity generation technology with potential to replace a sizeable section of fossil fuel generation (see Nakicenovic and Riahi, 2002; Baker and Solak, 2011; Lewis and Nocera, 2006). At present however, electricity from solar photovoltaics constitute a very small fraction of the world...
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...New Project 5% Group of 5 or less Analyze STP and strategy market of your chosen electricity utility company in either Texas or Ohio. Give the market overview before you get into the individual company. Paper and presentation due in 2 weeks. No class next week. http://www.aect.net/texas-electricity/market-structure-overview/ Market overview There are two electricity markets at work in Texas – competitive and fully regulated. 1. ERCOT is a competitive market where separate companies provide generation, transmission and distribution, and generation services. In this type of market, consumers have multiple retail electric providers (REPs) and service plans to choose from. Additionally, the competitive market sets wholesale electric prices, so the risks associated with the cost of construction, operations and maintenance of a power plant are assumed entirely by the generation company and its investors, not by end-use customers. While competitive market forces set wholesale and retail electric prices, the Public Utility Commission of Texas (PUC) still sets the transmission and distribution prices. 2. Fully regulated markets operate outside of ERCOT where a single company provides generation, transmission and distribution, and generation services. In this type of market, the PUC sets the retail electric prices charged to end-use customers. Each of these markets is part of a multi-state electric grid, and each of these electric grids has its own set of regulations. ...
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...Appendix 15 Appendix 1.0 15 Appendix 1.1 16 Appendix 1.2 16 Appendix 1.3 17 Company Background As the major electricity provider serving almost 6 million customers in the Kingdom of Saudi Arabia, SEC is responsible for generation, transmission and distribution of electricity throughout the Kingdom. Wholly owned by shareholders, the SEC also sets the price of electricity sold to consumers and industry under rules set by the Saudi government based on the cost of production, distribution and services. On 05/04/2000, Saudi Electricity Company was established as a Saudi joint stock company. This stipulated the merger of all Saudi electricity companies in the Central, Eastern, Western and Southern Regions in addition to the ten small companies operating in the north of the Kingdom as well as all other electricity operations managed by The General Electricity Corporation, into a single joint stock company which is now known as Saudi Electricity Company. It is a Riyadh-based utility, with 80% state-owned and 20% listed shares. Saudi Electricity Company (SEC) is one of the largest utility companies in the GCC, both by market capitalization ($ 12,572M), and in terms of its installed power generation capacity (40.697GW). The company owns 85% generation and 100% transmission, distribution and retail of electricity in region. It generates 37GW of electricity from 45 oil...
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...Options Theory Applied to Alternative Energy Industry Christina Clowdus Bus: 630 March 20, 2012 Dr. Shaw Introduction In life, you always have options. It is no different in capital investment. In today's unpredictable business world, managers recognize how risky the most valuable investment opportunities often are, and how useful a flexible strategy can be. That's why they want to know all their options. Yet many current financial assessment tools fail to identify what investors can do to capitalize on future uncertain events. “Managerial flexibility to adapt and revise future decisions in order to capitalize on favorable future opportunities or to limit losses has proven vital to long-term corporate success in an uncertain and changing marketplace” (Brennan, M.J. and E.S. Schwartz 1985, p. 15). Utilizing a real options strategy allows businesses to capture the value of managerial flexibility in adapting decisions in response to unexpected market developments. When used as a conceptual tool, real options allow management to characterize and communicate the strategic value of an investment project (Bjerksund, P. and S. Ekern 1990). Traditional methods (e.g. net present value, discounted cash flow) fail to accurately capture the economic value of investments in an environment of widespread uncertainty and rapid change. Using real options theory, managers can more effectively target crucial opportunities to redeploy, delay, modify, or even abandon capital-intensive projects...
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...load profiles * Recommend next steps to undertake as a follow up to this study Table 1 below illustrates current energy demands for our production line. Electricity demand is fairly stable over the calendar year, with peaks as expected during production hours, and a fairly high baseload during off production hours. Only 75% of the heating demand can be met by a cogeneration scheme. Demand in heating (hot water) is only necessary during production hours. Part of the electricity demand is to supply the production line with chilled water. The current chiller plant is electric driven. | Summer | Winter | | Weekday | Weekend | Weekday | Weekend | | Day | Night | Day | Night | Day | Night | Day | Night | Electricity consumption (kWh) | 2,205,072 | 836,654 | 309,605 | 126,821 | 2,194,749 | 813,301 | 343,068 | 137,186 | Fuel consumption (kWh) | 3,024,635 | 1,245,438 | - | - | 3,618,453 | 1,489,951 | - | - | Table 1 - Electricity and Gas consumption over a calendar year Table 2 below illustrates possible cogeneration schemes. As heating (hot water) is only required during production hours, the CHP plant will be installed in primary position, with a conventional boiler meeting electricity demand during off production hours. It would not be economically viable to install a larger CHP plant to meet the entire electricity needs of the production line, as all the heat generated during off production hours would be wasted. | Estimated savings...
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