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Open AccessArticle

Creating Synergies from Renewable Energy Investments, a Community Success Story from Lolland, Denmark

by Silvia Magnoni and Andrea M. Bassi

Energies 2009, 2(4), 1151-1169; https://doi.org/10.3390/en20401151 - 27 Nov 2009

Cited by 16 | Viewed by 13364

Abstract

The island of Lolland is a showcase example of a remote local community being able to stand up to the challenges of facing environmental and social consequences of climate change while creating economic opportunities. This island has had many years of experience in [...] Read more.

The island of Lolland is a showcase example of a remote local community being able to stand up to the challenges of facing environmental and social consequences of climate change while creating economic opportunities. This island has had many years of experience in implementing renewable energy (RE) projects as a way to combating peripheral poverty and promoting economic growth in a relatively remote area. The development strategy lies within the unique concept of Lolland Community Testing Facilities (CTF), which creates a forum between the private sector, research institutions and local political authorities by exploiting synergies among green investments and providing an international testing and demonstration platform for renewable energy technology and products. The present paper aims at giving an overview of integrated longer term energy planning based on Lolland CTF, its components and main features, while highlighting those critical characteristics that could make the CTF model successful and relevant for RE-based local development worldwide. Full article

(This article belongs to the Special Issue Energy Economics)

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320 KiB

Open AccessArticle

A Proposal of Ecologic Taxes Based on Thermo-Economic Performance of Heat Engine Models

by Marco A. Barranco-Jiménez, Israel Ramos-Gayosso, Marco A. Rosales and Fernando Angulo-Brown

Energies 2009, 2(4), 1042-1056; https://doi.org/10.3390/en20401042 - 10 Nov 2009

Cited by 10 | Viewed by 11512

Abstract

Within the context of Finite-Time Thermodynamics (FTT) a simplified thermal power plant model (the so-called Novikov engine) is analyzed under economical criteria by means of the concepts of profit function and the costs involved in the performance of the power plant. In this [...] Read more.

Within the context of Finite-Time Thermodynamics (FTT) a simplified thermal power plant model (the so-called Novikov engine) is analyzed under economical criteria by means of the concepts of profit function and the costs involved in the performance of the power plant. In this study, two different heat transfer laws are used, the so called Newton’s law of cooling and the Dulong-Petit’s law of cooling. Two FTT optimization criteria for the performance analysis are used: the maximum power regime (MP) and the so-called ecological criterion. This last criterion leads the engine model towards a mode of performance that appreciably diminishes the engine’s wasted energy. In this work, it is shown that the energy-unit price produced under maximum power conditions is cheaper than that produced under maximum ecological (ME) conditions. This was accomplished by using a typical definition of profits function stemming from economics. The MP-regime produces considerably more wasted energy toward the environment, thus the MP energy-unit price is subsidized by nature. Due to this fact, an ecological tax is proposed, which could be a certain function of the price difference between the MP and ME modes of power production. Full article

(This article belongs to the Special Issue Energy Economics)

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438 KiB

Open AccessArticle

A Simple Interpretation of Hubbert’s Model of Resource Exploitation

by Ugo Bardi and Alessandro Lavacchi

Energies 2009, 2(3), 646-661; https://doi.org/10.3390/en20300646 - 13 Aug 2009

Cited by 52 | Viewed by 34818

Abstract

The well known “Hubbert curve” assumes that the production curve of a crude oil in a free market economy is “bell shaped” and symmetric. The model was first applied in the 1950s as a way of forecasting the production of crude oil in [...] Read more.

The well known “Hubbert curve” assumes that the production curve of a crude oil in a free market economy is “bell shaped” and symmetric. The model was first applied in the 1950s as a way of forecasting the production of crude oil in the US lower 48 states. Today, variants of the model are often used for describing the worldwide production of crude oil, which is supposed to reach a global production peak (“peak oil”) and to decline afterwards. The model has also been shown to be generally valid for mineral resources other than crude oil and also for slowly renewable biological resources such as whales. Despite its widespread use, Hubbert’s modelis sometimes criticized for being arbitrary and its underlying assumptions are rarely examined. In the present work, we use a simple model to generate the bell shaped curve curve using the smallest possible number of assumptions, taking also into account the “Energy Return to Energy Invested” (EROI or EROEI) parameter. We show that this model can reproduce several historical cases, even for resources other than crude oil, and provide a useful tool for understanding the general mechanisms of resource exploitation and the future of energy production in the world’s economy. Full article

(This article belongs to the Special Issue Energy Economics)

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306 KiB

Open AccessArticle

Ethanol, Corn, and Soybean Price Relations in a Volatile Vehicle-Fuels Market

by Zibin Zhang, Luanne Lohr, Cesar Escalante and Michael Wetzstein

Energies 2009, 2(2), 320-339; https://doi.org/10.3390/en20200320 - 2 Jun 2009

Cited by 111 | Viewed by 15301

Abstract

The rapid upward shift in ethanol demand has raised concerns about ethanol’s impact on the price level and volatility of agricultural commodities. The popular press attributes much of this volatility in commodity prices to a price bubble in ethanol fuel and recent deflation. [...] Read more.

The rapid upward shift in ethanol demand has raised concerns about ethanol’s impact on the price level and volatility of agricultural commodities. The popular press attributes much of this volatility in commodity prices to a price bubble in ethanol fuel and recent deflation. Market economics predicts not only a softening of demand to high commodity prices but also a positive supply response. This volatility in ethanol and commodity prices are investigated using cointegration, vector error corrections (VECM), and multivariate generalized autoregressive conditional heteroskedascity (MGARCH) models. In terms of derived demand theory, results support ethanol and oil demands as derived demands from vehicle-fuel production. Gasoline prices directly influence the prices of ethanol and oil. However, of greater significance for the fuel versus food security issue, results support the effect of agricultural commodity prices as market signals which restore commodity markets to their equilibriums after a demand or supply event (shock). Such shocks may in the short-run increase agricultural commodity prices, but decentralized freely operating markets will mitigate the persistence of these shocks. Results indicate in recent years there are no long-run relations among fuel (ethanol, oil and gasoline) prices and agricultural commodity (corn and soybean) prices. Full article

(This article belongs to the Special Issue Energy Economics)

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Review

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316 KiB

Open AccessReview

Valuation of Long-Term Investments in Energy Assets under Uncertainty

by Luis M. Abadie

Energies 2009, 2(3), 738-768; https://doi.org/10.3390/en20300738 - 4 Sep 2009

Cited by 18 | Viewed by 10517

Abstract

This paper aims to contribute to the development of valuation models for long-term investments while keeping an eye on market prices. The adopted methodology is rooted on the existence of markets for futures and options on commodities related to energy investments. These markets [...] Read more.

This paper aims to contribute to the development of valuation models for long-term investments while keeping an eye on market prices. The adopted methodology is rooted on the existence of markets for futures and options on commodities related to energy investments. These markets are getting ever-increasingly liquid with ever-longer maturities while trading contracts. We discuss the advantages of this approach relative to other alternatives such as the Net Present Value (NPV) or the Internal Rate of Return (IRR), despite a limited increase in the complexity of the models involved. More specifically, using the valuation methods well-known to energy-finance academics, the paper shows how to: break down an investment into its constituent parts, apply to each of them the corresponding risk premium, value annuities on assets with a deterministic or stochastic behavior, and value the options that are available to its owner, in order to get an overall value of the investment project. It also includes an application to improvement in coal consumption, where futures markets are used to get a numerical estimate of the parameters that are required for valuation. The results are then compared with those from traditional methodologies. Conclusions for this type of investments under uncertainty are derived. Full article

(This article belongs to the Special Issue Energy Economics)

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