Academic literature on the topic 'Weighted average cost of capacity'
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Journal articles on the topic "Weighted average cost of capacity"
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DAI, MEIFENG, DANDAN YE, JIE HOU, and XINGYI LI. "SCALING OF AVERAGE WEIGHTED RECEIVING TIME ON DOUBLE-WEIGHTED KOCH NETWORKS." Fractals 23, no. 02 (May 28, 2015): 1550011. http://dx.doi.org/10.1142/s0218348x15500115.
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In this paper, we introduce a model of the double-weighted Koch networks based on actual road networks depending on the two weight factors w,r ∈ (0, 1]. The double weights represent the capacity-flowing weight and the cost-traveling weight, respectively. Denote by [Formula: see text] the capacity-flowing weight connecting the nodes i and j, and denote by [Formula: see text] the cost-traveling weight connecting the nodes i and j. Let [Formula: see text] be related to the weight factor w, and let [Formula: see text] be related to the weight factor r. This paper assumes that the walker, at each step, starting from its current node, moves to any of its neighbors with probability proportional to the capacity-flowing weight of edge linking them. The weighted time for two adjacency nodes is the cost-traveling weight connecting the two nodes. We define the average weighted receiving time (AWRT) on the double-weighted Koch networks. The obtained result displays that in the large network, the AWRT grows as power-law function of the network order with the exponent, represented by θ(w,r) = ½ log2(1 + 3wr). We show that the AWRT exhibits a sublinear or linear dependence on network order. Thus, the double-weighted Koch networks are more efficient than classic Koch networks in receiving information.
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Huo, Jia-Zhen, Yan-Ting Hou, Feng Chu, and Jun-Kai He. "A Combined Average-Case and Worst-Case Analysis for an Integrated Hub Location and Revenue Management Problem." Discrete Dynamics in Nature and Society 2019 (March 12, 2019): 1–13. http://dx.doi.org/10.1155/2019/8651728.
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This paper investigates joint decisions on airline network design and capacity allocation by integrating an uncapacitated single allocation p-hub median location problem into a revenue management problem. For the situation in which uncertain demand can be captured by a finite set of scenarios, we extend this integrated problem with average profit maximization to a combined average-case and worst-case analysis of this integration. We formulate this problem as a two-stage stochastic programming framework to maximize the profit, including the cost of installing the hubs and a weighted sum of average and worst case transportation cost and the revenue from tickets over all scenarios. This model can give flexible decisions by putting the emphasis on the importance of average and worst case profits. To solve this problem, a genetic algorithm is applied. Computational results demonstrate the outperformance of the proposed formulation.
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Chen, Ming-xia, Han Zhang, and Xu-yong Li. "Application of Artificial Bee Colony Algorithm for timing of Road Entrance Signal." MATEC Web of Conferences 232 (2018): 03004. http://dx.doi.org/10.1051/matecconf/201823203004.
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Aiming at the problem of signal timing at road intersections, this paper uses the artificial bee colony algorithm to optimize the road model of single point multi phase intersection. In this paper, the cost function is the weighted sum of the average delay time, the average number and the capacity. Using the artificial bee colony algorithm to optimize the signal timing of a typical crossroad, and using MATLAB experimental platform to simulate, it shows that the artificial bee algorithm can enhance the road traffic efficiency.
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Elmorsy, Louay, Tatiana Morosuk, and George Tsatsaronis. "Exergy-Based Analysis and Optimization of an Integrated Solar Combined-Cycle Power Plant." Entropy 22, no. 6 (June 13, 2020): 655. http://dx.doi.org/10.3390/e22060655.
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The transition towards higher shares of electricity generation from renewable energy sources is shown to be significantly slower in developing countries with low-cost fossil fuel resources. Integrating conventional power plants with concentrated solar power may facilitate the transition towards a more sustainable power production. In this paper, a novel natural gas-fired integrated solar combined-cycle power plant was proposed, evaluated, and optimized with exergy-based methods. The proposed system utilizes the advantages of combined-cycle power plants, direct steam generation, and linear Fresnel collectors to provide 475 MW baseload power in Aswan, Egypt. The proposed system is found to reach exergetic efficiencies of 50.7% and 58.1% for day and night operations, respectively. In economic analysis, a weighted average levelized cost of electricity of 40.0 $/MWh based on the number of day and night operation hours is identified. In exergoeconomic analysis, the costs of thermodynamic inefficiencies were identified and compared to the component cost rates. Different measures for component cost reduction and performance enhancement were identified and applied. Using iterative exergoeconomic optimization, the levelized cost of electricity is reduced to a weighted average of 39.2 $/MWh and a specific investment cost of 1088 $/kW. Finally, the proposed system is found to be competitive with existing integrated solar combined-cycle plants, while allowing a significantly higher solar share of 17% of the installed capacity.
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Ivanenko, N. P., and P. V. Tarasenko. "Cost of hydrogen production with using the share of electricity from a wind power plant in Ukraine." Problems of General Energy 2021, no. 1 (March 24, 2021): 45–51. http://dx.doi.org/10.15407/pge2021.01.045.
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To ensure the balance reliability of regimes of UES functioning, it was necessary to apply restrictions on generation from renewable energy sources (RES). In this regard, a number of amendments was made in 2020 to the Law of Ukraine "On the Electricity Market" dated April 13, 2017 No. 2019-VIII, which provide for reduction of the rates of the "green" tariff for renewable energy projects. CJSC NEC "Ukrenergo" predicts limitation of electricity production from renewable sources against the background of their growing capacity and falling consumption – up to 1 billion kW∙h. The total volume of electricity production from renewable energy sources in 2019 was about 4.5 billion kW∙h. One of the most efficient ways to use excessive electricity is producing hydrogen. Hydrogen has been successfully used as a raw material for many years. The total estimated value of the hydrogen feedstock market is $ 115 billion, and it is expected only to grow, reaching $ 155 billion by 2022. Hydrogen is widely used at present in various industries and sectors. It should be noted separately that the use of hydrogen instead of natural gas does not lead to increasing greenhouse gas emissions and favors the decarbonization of economy. In addition, the by-product of electrolysis is purified oxygen, which is currently relevant. The cost of hydrogen generated with the use of renewable electricity is typically $ 2.5–6.6 / kg of hydrogen. The most well-known technological options for producing hydrogen from RES are water electrolysis and steam reforming of biomethane / biogas with or without carbon capture and use / storage. The purpose of this paper was to estimate the weighted average cost of hydrogen in Ukraine at the expense of RES electricity, in particular, produced by a wind power plant with using water electrolysis. We developed an algorithm for calculating the weighted average cost of hydrogen production using wind power plants for the conditions of Ukraine, taking into account the determination of installed capacities of the battery, electrolyzer, and distiller. According to the calculation results, the weighted average cost of hydrogen production was about US $ 5.1 / kg of hydrogen. Keywords: hydrogen production, renewable energy sources, wind farm, weighted average cost. mathematical model, storage, electrolyzer
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Hou, Yan-Ting, Jia-Zhen Huo, and Feng Chu. "An Integrated Problem of p-Hub Location and Revenue Management with Multiple Capacity Levels under Disruptions." Journal of Advanced Transportation 2019 (April 1, 2019): 1–14. http://dx.doi.org/10.1155/2019/1812543.
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This paper considers an integrated hub location and revenue management problem in which a set of capacities is available from which one can be chosen for each hub and the disruption is considered in a star-star shaped airline network. We propose a two-stage stochastic programming model to maximize the profit of the network in which the cost of installing the hubs at different levels of capacities, the transportation cost, and the revenue obtained by selling airline tickets are considered. To provide flexible solutions, a hybrid two-stage stochastic programming-robust optimization model is developed by putting relative emphasis on a weighted sum of profit maximization. Furthermore, a sample average approximation approach is used for solving the stochastic programming formulation and a genetic algorithm approach is applied for both formulations. Numerical experiments are conducted to verify the mathematical formulations and compare the performance of the used approaches.
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Serri, Laura, Lisa Colle, Bruno Vitali, and Tullia Bonomi. "Floating Offshore Wind Farms in Italy beyond 2030 and beyond 2060: Preliminary Results of a Techno-Economic Assessment." Applied Sciences 10, no. 24 (December 13, 2020): 8899. http://dx.doi.org/10.3390/app10248899.
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At the end of 2019, 10.5 GW of wind capacity was installed in Italy, all onshore. The National Integrated Climate and Energy Plan sets a target of 18.4 GW of onshore wind capacity and 0.9 GW of offshore wind capacity by 2030. Significant exploitation of offshore wind resources in Italy is expected after 2030, using floating wind turbines, suitable for water depths greater than 50 m. This technology is at the demonstration phase at present. Results of a preliminary techno-economic assessment of floating wind plants in Italian marine areas in a medium (2030) and long-term (2060) scenario are presented. In 2030, a reference park with 10 MW wind turbines will be defined, and parametric costs, depending on distance from shore, were assessed. In 2060, possible wind resource variations due to climate change, and cost reductions due to large diffusion of the technology were considered in three case studies. The economic model used was the simple Levelized Cost of Energy (sLCoE). Different values of Weighted Average Cost of Capital (WACC) were considered too. The results show LCoEs comparable to the ones expected for the sector in 2030. In 2060, even in the more pessimistic scenario, wind resource decreases will be abundantly compensated by expected cost reductions.
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Wang, Xin, Feng Chen, Tao Zhang, Ning Qin, and Zhong-Yuan Jiang. "A new routing strategy limited by heterogeneous link bandwidth." Modern Physics Letters B 32, no. 24 (August 27, 2018): 1850292. http://dx.doi.org/10.1142/s0217984918502925.
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Traffic capacity of a network is very vital to a variety of complex networks, such as communication networks and road networks, in which the bandwidth of every link is limited or finite. In this work, inspired by the deployment process of nodes and links in real networks, we assume the bandwidth of every link is composed of a constant part and a degree-related one that can be updated iteratively with the network hardware update. We propose a link bandwidth-based routing mechanism to enhance the network traffic capacity. Extensive simulations in both scale-free networks and random networks are done to confirm the effectiveness of our proposed method. Comparing results with the shortest path routing and a weighted routing, our method achieves better network traffic capacity among all used routing strategies without obvious extra cost including the network diameter, average path length and average packet traveling time. Our work studies network routing from a very new perspective and might have potential applications in real network systems such as the communication networks.
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Ghigo, Alberto, Lorenzo Cottura, Riccardo Caradonna, Giovanni Bracco, and Giuliana Mattiazzo. "Platform Optimization and Cost Analysis in a Floating Offshore Wind Farm." Journal of Marine Science and Engineering 8, no. 11 (October 23, 2020): 835. http://dx.doi.org/10.3390/jmse8110835.
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Floating offshore wind represents a new frontier of renewable energies. The absence of a fixed structure allows exploiting wind potential in deep seas, like the Atlantic Ocean and Mediterranean Sea, characterized by high availability and wind potential. However, a floating offshore wind system, which includes an offshore turbine, floating platform, moorings, anchors, and electrical system, requires very high capital investments: one of the most relevant cost items is the floating substructure. This work focuses on the choice of a floating platform that minimizes the global weight, in order to reduce the material cost, but ensuring buoyancy and static stability. Subsequently, the optimized platform is used to define a wind farm located near the island of Pantelleria, Italy in order to meet the island’s electricity needs. A sensitivity analysis to estimate the Levelized Cost Of Energy is presented, analyzing the parameters that influence it most, like Capacity Factor, Weighted Average Capital Cost (WACC) and number of wind turbines.
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Ai, Hua, Jianwei Chai, Jilei Zhang, Shaweta Khanna, and Kayhan Zrar Ghafoor. "Research on the application of search algorithm in computer communication network." Journal of Intelligent Systems 31, no. 1 (January 1, 2022): 1150–59. http://dx.doi.org/10.1515/jisys-2021-0263.
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Abstract This article mitigates the challenges of previously reported literature by reducing the operating cost and improving the performance of network. A genetic algorithm-based tabu search methodology is proposed to solve the link capacity and traffic allocation (CFA) problem in a computer communication network. An efficient modern super-heuristic search method is used to influence the fixed cost, delay cost, and variable cost of a link on the total operating cost in the computer communication network are discussed. The article analyses a large number of computer simulation results to verify the effectiveness of the tabu search algorithm for CFA problems and also improves the quality of solutions significantly compared with traditional Lagrange relaxation and subgradient optimization algorithms. The experimental results show that with the increase of the weighted coefficient of variable cost, the proportion of variable cost in the total cost increases from 10 to 35%. The growth is relatively slow, and the fixed cost is still the main component. In addition, due to the increase in the variable cost, the tabu search algorithm will also choose the link with large luxury to reduce the variable cost, which makes the fixed cost slightly increase, while the network delay cost and average delay slightly decrease. The proposed method, when compared with the genetic algorithm, has more advantages for large-scale or heavy-load networks.
Dissertations / Theses on the topic "Weighted average cost of capacity"
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PILOTO, LUCAS AUGUSTO DE MORAIS. "INTEREST ON EQUITY AND THE WEIGHTED AVERAGE COST OF CAPITAL." PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRO, 2008. http://www.maxwell.vrac.puc-rio.br/Busca_etds.php?strSecao=resultado&nrSeq=12687@1.
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PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRODiversos métodos são utilizados para o cálculo do valor justo de uma empresa. Dentre os métodos mais usados, estão o método do fluxo de caixa descontado, onde os fluxos de caixa estimados da empresa são trazidos a valor presente por uma taxa para se chegar a uma estimativa de valor da empresa. Esta taxa é uma média ponderada do custo de capital próprio e do custo de capital de terceiros, sendo conhecida pela sigla WACC. No Brasil, entretanto, existe uma peculiaridade na legislação que influencia o método de cálculo do WACC: os Juros sobre Capital Próprio (JCP). Criado em 1996, este fator permite que seja distribuído aos acionistas, parte do lucro apurado, como remuneração pela utilização do capital próprio. A legislação brasileira permite que este montante possa ser deduzido da base de cálculo do imposto de renda da pessoa jurídica, de forma equivalente aos juros pagos a terceiros. Tal particularidade da legislação brasileira impacta diretamente no valor do custo médio ponderado de capital e conseqüentemente no valor justo estimado das empresas que se utilizam do JCP. Tendo em vista que o método tradicional de avaliação de empresas não se adapta às empresas brasileiras que utilizam a distribuição de juros sobre capital próprio, surge a necessidade de adaptação da fórmula tradicional de cálculo do WACC para que este considere o benefício fiscal do JCP. Deste modo, este estudo pretende adaptar a fórmula de cálculo do custo médio ponderado de capital para a realidade das empresas brasileiras, além de demonstrar o impacto desta alteração no cálculo do valor estimado de uma empresa atuante no país. O objetivo geral deste trabalho será testar um modelo de cálculo do custo médio ponderado de capital (WACC) ao arcabouço jurídico e contábil brasileiro, considerando para tal, o impacto da utilização dos Juros Sobre Capital Próprio. Como objetivos específicos, temos a adequação da fórmula de cálculo do WACC, incluindo o JCP, o cálculo do valor de uma empresa com o WACC tradicional, o cálculo do valor da mesma empresa com o WACC adaptado e a comparação do valor da empresa apurado nos dois métodos. Para tal, foi utilizado o relatório de avaliação da Aracruz Celulose, realizado por um grande banco de investimento. Esta empresa foi escolhida por distribuir regularmente juros sobre capital próprio. A partir deste relatório, que utilizava a fórmula tradicional do WACC para cálculo do valor justo da empresa, recalculamos o valor justo da ação desta mesma companhia, utilizando a fórmula proposta. Foram comparados então, os valores encontrados pelos dois métodos, onde se verificou que o valor era maior pelo método proposto do que pelo método tradicional. Verificou-se então que a distribuição de juros sobre capital próprio será vantajosa somente nos casos onde a alíquota de imposto de renda da pessoa jurídica for superior à alíquota de imposto de renda do acionista.
Many methods are used to calculate the fair value of a company. Among the methods most commonly used is the method of discounted cash flow, where the expected cash flows of the company are discounted by a rate to find an estimated value of the company. This rate, known by WACC, is a weighted average cost of equity and debt. In Brazil, however, there is a peculiarity in the legislation that affects the method of calculating the WACC: the Interest on Equity (IOE). Created in 1996, this factor allows the distribution of part of the profit discharged to shareholders as payment for the use of equity. The Brazilian law allows that this amount could be deducted from the base for calculating the income tax for the company, equivalent to interest paid to creditors. This peculiarity of Brazilian legislation impacts directly on the value of the weighted average cost of capital and therefore on the estimated fair value of the companies that make use of the IOE. Given that the traditional method of valuation of companies is not perfectly suited to Brazilian companies that use the distribution of interest on equity, it is necessary to adapt the traditional formula for calculating the WACC, considering the tax benefit of the IOE. Thus, this study aims to adapt the formula for calculating the weighted average cost of capital for the reality of Brazilian companies, in addition to demonstrate the impact of this change in calculating the estimated value of an active company in the country. The general objective of this work will test a model for calculating the weighted average cost of capital (WACC) in the Brazilian legal and accounting framework, considering the impact of the use of Interest on Equity. The specific objectives are the adequacy of the formula for calculating the WACC (including the IOE), the calculation of the value of a company with the traditional WACC, the calculation of the value of the same company with the adapted WACC and for last, the comparison of the value of the company found in both methods. To this end, we used the valuation report of Aracruz Celulose, held by a large investment bank. This company was chosen because it distributes interest on equity regularly. From this report, which used the traditional formula for calculating the WACC fair value of the company, we recalculate the fair value of the stock of that company, using the proposed formula. We then compared the values found by both methods, where was found that the value of the company was greater in the method proposed than in the traditional method. It was concluded that the distribution of interest on equity will be advantageous only in cases where the rate of income tax of the company exceeds the rate of income tax of the shareholders.
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COUTO, SUSANA FURQUIM XAVIER. "ESTIMATING THE WEIGHTED AVERAGE COST OF CAPITAL FOR ELECTRICITY DISTRIBUTION COMPANIES IN BRAZIL." PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRO, 2004. http://www.maxwell.vrac.puc-rio.br/Busca_etds.php?strSecao=resultado&nrSeq=6231@1.
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Em uma indústria sujeita à regulamentação, o Custo Médio
Ponderado de Capital -
CMPC é parâmetro fundamental para a determinação da
remuneração justa dos fornecedores
de capital das empresas reguladas (investidores e
credores), bem como para determinar a
tarifa módica para o consumidor dos produtos ou serviços.
Sabendo que as indústrias
reguladas prestam, em geral, serviços básicos e de infra-
estrutura, toda a sociedade é atingida
pelas decisões a respeito desse custo, e sua determinação
é parte importante das atividades do
regulador. A teoria que suporta o conceito do CMPC
remonta ao final da década de 50 e se
encontra consagrada nos meios acadêmicos, empresariais e
normativos. Entretanto, a
metodologia para a determinação dos seus componentes
prospectivos, ou seja, a determinação
de qual será o CMPC no futuro, encontra divergências
entre os principais autores e apresenta
dificuldades operacionais. Essas dificuldades aumentam em
um mercado de capitais pequeno
quando comparado a outros países e em um ambiente
político com uma curta história de
estabilidade. O objetivo do presente trabalho é discutir
a metodologia empregada pela
Agência Nacional de Energia Elétrica - ANEEL para
determinar o CMPC para empresas de
distribuição de energia elétrica no Brasil à luz das
melhores práticas e do conhecimento
teórico sobre o tema.In regulated industries, estimating the weighted average cost of capital (CMPC) is important to the regulatory framework in order to establish both the fair return to the capital providers (investors and creditors) of the regulated companies, as well the reasonable price of goods or services for the customers. The regulated industries provide, in general, basic or infrastructure services and, as the whole society is affected by decisions about this cost, the determination of such is an important part of the regulators activities. The theoretical foundations supporting the concept of the weighted average cost of capital (CMPC) date back to the 1950 s and are solidly established in the academic and business circles, as well as in the regulating entities. The methodologies applied to estimate the expected weighted average cost of capital (CMPC) in future years generate, however, some controversy among the authors. In addition, difficulties exist in gathering the necessary data, especially in emerging markets with small capital markets and a short history of political stability. The objective of this dissertation is to analyze the methodology employed by Agência Nacional de Energia Elétrica - ANEEL (Brazilian National Agency for Electricity - the country s regulator of electricity generation, transmission and distribution) in the calculation of the weighted average cost of capital (CMPC) used in the tariff review process for the electricity distribution companies.
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ROCHA, RENATO DE ALMEIDA. "CALCULUS OF THE WEIGHTED AVERAGE COST OF CAPITAL OF THE BRAZILIAN ELECTRICITY DISTRIBUTION SECTOR WITH NATIONAL ECONOMY DATA AND APT MODEL." PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRO, 2009. http://www.maxwell.vrac.puc-rio.br/Busca_etds.php?strSecao=resultado&nrSeq=14713@1.
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PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIROA ANEEL efetua o cálculo do custo médio ponderado de capital do setor brasileiro de distribuição de energia elétrica (WACC Regulatório) e o insere nas tarifas, a partir de dados da economia norte-americana por entender que os dados da economia brasileira não apresentam séries consistentes. Com relação ao cálculo do custo do capital próprio, a ANEEL o define utilizando o modelo CAPM. Uma vez que os resultados obtidos a partir de dados da economia norte-americana, para refletirem a realidade brasileira, carecem de ajustes posteriores, além da limitação do uso do CAPM que apenas correlaciona o desempenho do setor com o mercado; a proposta apresentada neste trabalho é de calcular o custo médio ponderado de capital do setor através de dados da economia brasileira, e no caso do custo do capital próprio utilizar o modelo APT para sua estimação, correlacionando o desempenho do setor com as variáveis macroeconômicas que mais o impactam. Os resultados indicam que já é possível trabalhar com dados da economia brasileira e que o custo médio ponderado de capital estimado para o setor em estudo, feito pela ANEEL pode estar subestimado, uma vez que, por partir de dados da economia norte-americana pode acabar por não captar plenamente alguns riscos que o modelo APT capta partindo de dados da economia brasileira.
ANEEL calculates the weighted average cost of capital of the Brazilian electric energy distribution sector (Regulatory WACC) based on American economic data, as it understands that the data from the Brazilian economy does not present consistent series. In the case of the cost of equity, ANEEL uses the CAPM model and inserts the results into the tariffs. Due to the fact that, the results obtained from the American economy in order to reflect the Brazilian reality need further adjustments, aside from the limitation of CAPM which correlates the performance of the sector exclusively with the market; we calculate the average cost of capital of the sector with Brazilian economic data. In the case of the cost of equity, we use the APT model to correlate the performance of the sector with the macroeconomics variables that have greatest impacts. The results indicate that it’s already possible to work with Brazilian economic data and that the average cost of capital of the sector as calculated by ANEEL might be underestimated, due to the use of American economic data that may not completely capture some risks that the APT model with Brazilian data captures.
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Šusták, Tomáš. "Ocenenie Volkswagen Group." Master's thesis, Vysoká škola ekonomická v Praze, 2010. http://www.nusl.cz/ntk/nusl-73122.
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Objective of the thesis is determination of Volkswagen Group's equity intrinsic value. Basic starting point of the analysis is seggregation of consolidated financial statements into financial and production division, which are valuated separately. The production division is valuated using both enterprise discounted cashflow and discounted economic profit analysis. Equity cashflow valuation is used to derive value of the financial division. Results of valuation implied by income approach are then compared with market multiples valuation.
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Heidari, Shayan. "Economic Modelling of Floating Offshore Wind Power : Calculation of Levelized Cost of Energy." Thesis, Mälardalens högskola, Industriell ekonomi och organisation, 2017. http://urn.kb.se/resolve?urn=urn:nbn:se:mdh:diva-36130.
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Floating offshore wind power is a relatively new technology that enables wind turbines to float above the sea level, tied by anchors at the seabed. The purpose of this work is to develop an economic model for the technology in order to calculate the total cost of a planned wind farm. Cost data are retrieved from reports and academic journals available online. Based on these data, a model in Microsoft Excel is developed which calculates the Levelized cost of energy (LCOE) for floating wind power plants as a function of several input values. As an addition to this model, financing offshore projects are described using literature study and by doing interviews with three major companies, currently investing in offshore wind. As a result, the model allows the user to calculate Capital expenditures, Operating expenditures and LCOE for projects at any given size and at any given site. The current LCOE for a large floating offshore wind farm is indicated to be in the range of 138-147 £/MWh. The outline from interviews was that today there is no shortage of capital for funding wind projects. However, in order to attract capital, the governmental regulatory of that market has to be suitable since it has a crucial impact on price risks of a project.
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Veselý, Martin. "Aviation industry in global perspective." Master's thesis, Vysoká škola ekonomická v Praze, 2015. http://www.nusl.cz/ntk/nusl-201997.
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The hypothesis claims that full service carriers (FSCs) will be forced to change their operating models. Additionally, the trends which form aviation market of the future are explored. The investigation is based on a financial assessment of ten important airlines incorporated in four different regions across the globe, between 2005 and 2014. According to the findings the trend of liberalization will continue, thus FSCs will continue losing market share to low cost carriers (LCCs) and as such, they will be made to change the way they operate in order to survive. The future aviation market is defined by a reshuffle of demand towards emerging countries, further rationalization of operating models and consolidation.
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Rodrigues, António Manuel Modesto. "O custo de capital para projetos de investimento em energia eólica e solar em Cabo Verde." Master's thesis, Universidade de Évora, 2020. http://hdl.handle.net/10174/28941.
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O presente trabalho tem como objetivo geral definir uma metodologia de cálculo e, posteriormente, estimar o custo médio ponderado de capital para os potenciais investidores em projetos renováveis, em Cabo Verde.
A estimativa do custo de capital foi efetuada através da metodologia WACC-CAPM. Os betas do CAPM foram calculados utilizando o método quantitativo denominado regressão linear simples pelo método dos mínimos quadrados. Adicionalmente, os prémios de risco foram apurados através do método de pesquisa documental, adotando-se os valores propostos para os mesmos em literatura credível.
O custo de capital alheio foi estimado com base em dados do mercado financeiro cabo-verdiano, utilizando o método de pesquisa documental.
O custo médio ponderado de capital após impostos foi estimado em 9,07% em termos nominais. Incorpora um debt to equity ratio de 233%, permitindo uma taxa de remuneração de 15,89% para os acionistas e de 6,15% para os credores; The cost of capital for wind and solar investment projects in Cabo Verde
Abstract:
The overall goal of the present work is to define a calculation methodology and, subsequently, estimate the weighted average cost of capital for potential investors in renewable projects, in Cape Verde.
The cost of capital was estimated using the WACC-CAPM methodology. CAPM betas were calculated using the quantitative method called simple linear regression using the least squares method. Additionally, the risk premiums were determined using the documentary research method, adopting the values proposed for them in credible literature.
The cost of debt was estimated based on data from the Cape Verdean financial market, using the documentary research method.
The weighted average cost of capital after taxes was estimated at 9.07% in nominal terms. It incorporates a debt to equity ratio of 233%, allowing a remuneration rate of 15.89% for shareholders and 6.15% for creditors.
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Fernandes, Miguel dos Santos. "Equity Research - Portucel." Master's thesis, Instituto Superior de Economia e Gestão, 2013. http://hdl.handle.net/10400.5/6501.
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Mestrado em FinançasA definição do melhor método de avaliação de empresas tem sido alvo de debate nos últimos anos. O trabalho aqui desenvolvido foca-se na avaliação da empresa Portucel – Empresa Produtora de Pasta e Papel, e pretende chegar a um modelo de avaliação que seja o mais adequado às suas características. Este objectivo é cumprido através de um estudo que inclui duas componentes. Por um lado, é realizada uma revisão de literatura baseada no conjunto de informações e estudos recolhidos a partir de publicações e artigos científicos sobre a avaliação de empresas; por outro, é feita uma análise fundamental aprofundada da empresa que se debruça sobre uma visão da situação energética nacional e sobre um estudo global da indústria da madeira, da pasta e do papel. Com base nos dados resultantes, a avaliação é realizada a partir do método Discounted Cash Flow, seguida de uma análise de sensibilidade às variáveis chave para a criação de valor da empresa. Esta análise é posteriormente complementada pelo método dos múltiplos, permitindo um estudo comparativo entre a empresa e as suas principais concorrentes. O processo aqui descrito resulta finalmente numa recomendação de compra, sustentada pela análise dos resultados obtidos através da comparação entre o Price Target definido e o valor de mercado da Portucel.
Over the last few years, the definition of the best valuation method has been the subject of debate. This paper seeks to perform a firm-valuation analysis of Portucel – Pulp and Paper Company, which implies choosing the most adequate valuation technique considering the company’s specificities. This goal is achieved through two study components. On one hand, we conduct a literature review on equity valuation that is based on surveys and data collection from articles and papers on this matter; on the other, we perform a solid fundamental analysis of the target company including an overview of both the national energy program and the wood-based industry. The valuation is finally carried out using the Discounted Cash Flow method, followed by a sensitivity analysis on the key variables that contribute to the company’s value creation. This analysis is then combined with the Multiples method, allowing a comparative study of the company and its main competitors. The process results in a buy recommendation, also sustained by the outcomes of the comparison between the Price Target and Portucel’s market value.
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Tomáš, Milan. "Určování hodnoty podniku." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2021. http://www.nusl.cz/ntk/nusl-444249.
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This diploma thesis deals with the determination of the value of company Reda a.s. to 31.12.2019, by using income-based method. The first part of thesis defines the theoretical assumptions and procedure for determining the value of company. The analytical part contains a strategic analysis, financial analysis, prognosis of value generators and the compilation of a financial plan. At the end of the diploma thesis, the value of the company is determined using the discounted cash flow method.
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Svitaňová, Mária. "Určení hodnoty podniku Environchem." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2011. http://www.nusl.cz/ntk/nusl-222852.
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This thesis contains business valuation of company CHEMOSVIT ENVIRONCHEM, a.s. based on income approach. The first part discusses theoretical concepts and methods of valuation. The second part includes strategic, financial and SWOT analysis, financial plan and income based discounted cash flow valuation. In conclusion, the valuation statement as at 31.4.2011 is reported.
Books on the topic "Weighted average cost of capacity"
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Leuchtgens, Philip. Vor- und Nachteile des Weighted Average Cost of Capital-Verfahrens. GRIN Verlag GmbH, 2013.
Find full textBook chapters on the topic "Weighted average cost of capacity"
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Yashin, Sergey N., Egor V. Koshelev, Natalya A. Yagunova, Victor P. Kuznetsov, and Elena V. Romanovskaya. "The Weighted Average Cost of Capital for the Analysis of Innovative Projects Integrated into the Company." In Economic Issues of Social Entrepreneurship, 103–11. Cham: Springer International Publishing, 2021. http://dx.doi.org/10.1007/978-3-030-77291-8_10.
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A. Alagbada, Samuel. "100 MW Wind Turbine Power Plant." In Renewable Energy - Recent Advances [Working Title]. IntechOpen, 2022. http://dx.doi.org/10.5772/intechopen.107067.
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Wind power production has increased by a hundredfold during the last 20 years and represents roughly 3% of the total global electricity production. In recent years, technological changes in wind turbine configurations have enabled higher capacity factors for wind turbines. The results from the studies showed that wind as a source of energy for Växjö could be explored in order to achieve the goal of energy sufficiency and as well as sustaining the greenest city status in Europe. The simulation showed that 100 MW electricity could be generated from the wind sources with respect to the available data via global wind metrological data, literature, RETScreen Expert software., LCOE and IRR analysis tools. In addition, the Internal rate of return (IRR) of 8.7% which is good enough considering the proposed energy tax, energy security and environmental benefit cost ratio as well as reduced global weighted-average levelized cost of electricity (LCOE) from wind power technology make it more attractive for investor-Växjö municipality.
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"Weighted Average Cost of Capital." In Valuation for M&A, 169–79. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2018. http://dx.doi.org/10.1002/9781119437413.ch9.
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"Weighted Average Cost of Capital." In Valuation for M&A, 163–72. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2015. http://dx.doi.org/10.1002/9781119200154.ch10.
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"Weighted Average Cost of Capital." In Practitioner's Complete Guide to M&As, 130–36. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2015. http://dx.doi.org/10.1002/9781119200864.ch37.
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"Capital Structure: Weighted Average Cost of Capital (WACC)." In An Introduction to Accounting and Managerial Finance, 193–221. WORLD SCIENTIFIC, 2010. http://dx.doi.org/10.1142/9789814273831_0011.
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"Corporation tax, leverage and the weighted average cost of capital." In The Cost of Capital, 153–80. Cambridge University Press, 2005. http://dx.doi.org/10.1017/cbo9781139171335.008.
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"Appendix F: Derivation of Weighted Average Cost of Capital." In Accounting and Valuation Guide, 159–60. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2017. http://dx.doi.org/10.1002/9781119448600.app6.
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"Appendix 17.6: Estimating the Weighted Average Cost of Capital for the ABC Corporation." In From Innovation to Cash Flows, 1–5. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2011. http://dx.doi.org/10.1002/9781118273166.app15.
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O’Donnell, Owen, and Tom Van Ourti. "Rank-dependent equity weights." In Distributional Cost-Effectiveness Analysis, edited by Owen O’Donnell and Tom Van Ourti, 237–52. Oxford University Press, 2020. http://dx.doi.org/10.1093/med/9780198838197.003.0012.
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This chapter explains how to evaluate the distributional consequences of health programmes by comparing inequality penalized measures of population health. The approach taken is founded on use of rank-dependent social welfare functions (SWFs) that evaluate population health outcomes in terms of equity-weighted average health, using weights that depend only on rank in the distribution of health. The underlying ethical principles and resource allocation implications are compared with those of the level-dependent welfare function approach introduced in the next chapter. Conditions under which quantitative results derived from a rank-dependent SWF are consistent with the preference ordering of programmes established by dominance analysis are identified. The approach is easily extended to allow for aversion to health inequality in relation to an equity-relevant variable, such as socioeconomic status.
Conference papers on the topic "Weighted average cost of capacity"
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Hauffe, Richard, Constantine Samaras, and Jeremy J. Michalek. "Plug-In Hybrid Vehicle Simulation: How Battery Weight and Charging Patterns Impact Cost, Fuel Consumption, and CO2 Emissions." In ASME 2008 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference. ASMEDC, 2008. http://dx.doi.org/10.1115/detc2008-50027.
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Plug-in hybrid electric vehicle (PHEV) technology is receiving attention as an approach to reducing U.S. dependency on foreign oil and emissions of greenhouse gases (GHG) from the transportation sector. Because plug-in vehicles require large batteries for energy storage, battery weight can have a significant impact on vehicle performance: Additional storage capacity increases the range that a PHEV can travel on electricity from the grid; however, the associated increased weight causes reduced efficiency in transforming electricity and gasoline into miles driven. We examine vehicle simulation models for PHEVs and identify trends in fuel consumption, operating costs, and GHG emissions as battery capacity is increased. We find that PHEVs with large battery capacity consume less gasoline than small capacity PHEVs when charged every 200 miles or less. When charged frequently, small capacity PHEVs are less expensive to operate and release fewer GHGs, but medium and large capacity PHEVs are more efficient for drivers that charge every 25–100 miles. While statistics on average commute length suggest that frequent charges are possible, answering the question of which PHEV designs will best help to achieve national goals will require a realistic understanding of likely consumer driving and charging behavior as well as future trends in electricity generation.
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Lilly, Patrick, and George Simons. "California’s Self-Generation Incentive Program Nonresidential PV Systems: Measured System Performance and Actual Costs." In ASME 2006 Power Conference. ASMEDC, 2006. http://dx.doi.org/10.1115/power2006-88228.
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More than two hundred sixty grid-tied photovoltaic (PV) systems sized 30 kW to 1.1 MW installed in California during 2002 through 2004 received partial funding through the Self-Generation Incentive Program (SGIP). The SGIP is administered statewide by PG&E, SCE, SoCalGas, and the San Diego Regional Energy Office. The incentive is structured as a one-time capacity based payment made at the time of system completion. The first PV system incentive was paid in Summer 2002. Through the end of 2004, a total of 269 PV systems had received financial support through the program. The cumulative generation capacity of these systems exceeded 30 MW and corresponded to $101 million of incentives paid. While originally slated to run through 2004, recently the program was modified and extended through the end of 2007. PV systems participating in the program are being monitored to support evaluation of the program. These data have been used to assess impacts of the Program on peak demand and energy consumption. These data have also been incorporated into the Program’s cost-effectiveness assessment. Well over one-half of the PV systems have already been subject to metering yielding 15-minute interval generator output data. The cumulative size of the directly monitored PV systems currently exceeds 33 MW as of late 2005. In 2004, the statewide California Independent System Operator (ISO) electrical system peak occurred on September 8 during the 16th hour (from 3 to 4 PM PDT). During this hour the electrical demand for the California ISO reached 45,562 MW. On this day, there were 235 PV systems funded under the SGIP installed and operating; interval-metered data are available for 107 of these projects. The resulting estimate of peak demand impact coincident with the ISO peak load totals 9,938 kW. The estimated peak demand impact corresponds to 0.39 kW per 1.0 kWRebated of PV system size and is based on rebated capacity. Those unfamiliar with PV system size ratings and PV system operating characteristics may be surprised that the overall weighted-average peak demand impact was not substantially higher at this hour and time of year. To help put this result in perspective, it can be compared to a simple engineering estimate of peak power output based on published information regarding PV system performance. First, we begin with 1 kW [basis: rebated size] of horizontal PV system capacity. For purposes of determining rebates, PV system sizes are calculated as the product of cumulative estimated module DC power output under PTC conditions and inverter maximum DC to AC conversion efficiency. Factors such as manufacturing tolerance, soiling, module mismatch, temperature effects, and wiring losses may result in actual full-sun power output levels of about 0.76 kW/kWRebated. When the 3 to 4 PM angle of incidence effects for the month of September are included the expected output value drops significantly further. The peak-day operating characteristics of the 107 PV projects for which peak-day interval-metered data were available are summarized in the box plot of Figure 4. System sizes were used to normalize power output values prior to plotting summary statistics of PV output profiles for individual projects. The normalized values represent PV power output per unit of system size. Treatment in this manner enables direct comparison of the power output characteristics of PV systems of varying sizes. The vertically oriented boxes represent ranges within which 75% of project-specific values lie. The vertical lines represent the total range (i.e., maximum and minimum) of project-specific values. The energy production of the group of metered PV systems varied according to season. In Figure 7, normalized energy production by month is illustrated (on the right axis). These values represent the monthly average capacity factor for the on-line PV system capacity. As expected, normalized energy production levels reach their maximum values in the summer season and decrease towards the winter season as the intensity and duration of incident solar radiation falls off, coupled with increased incidence of storms and other weather disturbances off the Pacific Ocean, which affect the availability of solar radiation upon the PV modules.
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Hindle, Ed, Robert Van Stone, Chris Brogan, John Vandike, Ken Dale, and Nathan Gibson. "A Prognostic and Diagnostic Approach to Engine Health Management." In ASME Turbo Expo 2006: Power for Land, Sea, and Air. ASMEDC, 2006. http://dx.doi.org/10.1115/gt2006-90614.
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A serious operational cost trend threatens the future technical preeminence of the United States DoD. Increasing readiness costs are severely impacting acquisition of new aircraft, which translates to an increase in the average age of the United States Air Force, Navy and Army aircraft fleet. As time marches on, this undesirable trend will become more and more difficult to overcome. It would be unwise to expect congress to increase the defense budget in the near future to overcome this dilemma. Hence, as the current aircraft fleets continue to age this problem will only get worse. A revolutionary paradigm shift must take place to reverse the aircraft sustainment demand for funding. Prognosis based asset management can go a long way towards reversing the operating cost trend. When applied to aircraft engines, prognosis based asset management may allow the services to reach cost of ownership entitlement as well as achieve significant safety and readiness improvements. This revolutionary change in engine management will employ condition (or state) based component lifing and inspections (verses the current hard time inspections limits). Instead of operating to fixed intervals, based on engine health, the component will dictate when the optimal inspection should occur. In other words, a sensor will determine when the engine needs to be inspected. This includes all nondestructive evaluation, borescope activities, component replacement and depot maintenance work. The concept of engine health management (EHM) has been an interesting topic for several years. The Navy explored prognosis and mechanical diagnostics in the early 70’s for the F-8 and A-7 applications (1). Various limitations such as engine controller, storage, limited computing capacity / capabilities have prevented this from moving forward. Significant advances in both computing power and sensor technology now make it possible to obtain real time engine information and to make EHM a reality on an engine-by-engine basis. Obtaining flight-by-flight usage parameter information will provide the foundation for robust diagnostics as well as engine prognostics and allow real time fault tree analysis and near real time damage accumulation calculations. Once this information is available, engine prognosis can provide predictive capability for the health of engine components, appropriate inspection intervals and maintenance activities providing a substantial long-range cost avoidance opportunity for the DoD sustainment budget. Current fleet management capability is constrained by uncertainty in the current state of the individual aircraft engines. The ability to sense or measure the damage state of an individual part is limited at best. Further, specific part operational severity is not captured with the current lifing process, hence many components are not operating to their life entitlement because the life is based on fleet weighted average missions. Unlike the fixed interval inspections currently being performed, precise assessment is required for condition-based lifing. The key considerations in this new assessment process are 1) the fidelity of the analysis tools and 2) the definition of the boundary conditions (or environmental conditions used by the analysis tools) 3) improved understanding of diagnostics and engine faults and a better troubleshooting tool.
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Al-Sabaa, Ahmed, Hany Gamal, and Salaheldin Elkatatny. "Generation of a Complete Profile for Porosity Log While Drilling Complex Lithology by Employing the Artificial Intelligence." In SPE Symposium: Artificial Intelligence - Towards a Resilient and Efficient Energy Industry. SPE, 2021. http://dx.doi.org/10.2118/208642-ms.
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Abstract The formation porosity of drilled rock is an important parameter that determines the formation storage capacity. The common industrial technique for rock porosity acquisition is through the downhole logging tool. Usually logging while drilling, or wireline porosity logging provides a complete porosity log for the section of interest, however, the operational constraints for the logging tool might preclude the logging job, in addition to the job cost. The objective of this study is to provide an intelligent prediction model to predict the porosity from the drilling parameters. Artificial neural network (ANN) is a tool of artificial intelligence (AI) and it was employed in this study to build the porosity prediction model based on the drilling parameters as the weight on bit (WOB), drill string rotating-speed (RS), drilling torque (T), stand-pipe pressure (SPP), mud pumping rate (Q). The novel contribution of this study is to provide a rock porosity model for complex lithology formations using drilling parameters in real-time. The model was built using 2,700 data points from well (A) with 74:26 training to testing ratio. Many sensitivity analyses were performed to optimize the ANN model. The model was validated using unseen data set (1,000 data points) of Well (B), which is located in the same field and drilled across the same complex lithology. The results showed the high performance for the model either for training and testing or validation processes. The overall accuracy for the model was determined in terms of correlation coefficient (R) and average absolute percentage error (AAPE). Overall, R was higher than 0.91 and AAPE was less than 6.1 % for the model building and validation. Predicting the rock porosity while drilling in real-time will save the logging cost, and besides, will provide a guide for the formation storage capacity and interpretation analysis.
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Xu, Yuning, Lianxin Yang, Ken Chen, Jiwen Zhang, and Chenglong Fu. "Energetics of Load Carriage by Bamboo Carrying Poles." In ASME 2019 International Mechanical Engineering Congress and Exposition. American Society of Mechanical Engineers, 2019. http://dx.doi.org/10.1115/imece2019-10584.
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Abstract Unlike western conventions of rigid body attachments (e.g. backpack), carriers in Asia prefer to use bamboo poles, an ancient, ingenious, elastically-suspended equipment, especially when carrying heavy loads. As an elastically-suspended equipment, bamboo pole might have some potential benefits including reducing peak shoulder forces as well as saving metabolic transport cost, but certain skills should be needed for loading. Experienced carriers routinely carry loads exceeding their own body mass (Mb) for a long distance, while novices might hurt themselves. However, no skillful bamboo pole carriers’ performance or loading with heavy load has not been reported as far as we know. We set out to determine the loads capability and distances carried by skillful carriers, measure their metabolic cost for carrying the loads, and observe whether their natural walking speed changed as a function of load. In this paper, we compared the skillful carriers’ energy expenditure on carrying loads in both normal bamboo pole on shoulder and typical backpacks with hip support. Both carrying postures were normal, just as what subjects used in their daily life. The O2 consumption and CO2 production were measured in 13 subjects while standing or walking with loads. All subjects were asked to carry loads ranging from 0 kg to their load capacity in two loading type, while walking on a 1-meter wide nearly circular level track at their preferred speed. These speeds were record by cameras placed beside the track. Experimental results show that bamboo pole perform better under heavy load: 1. Loading by bamboo pole helped carriers to load 16% body weight heavier than by backpack on average. 2. With the load increasing, the walking speed loading by backpack would decrease from 1.3m/s (0kg) to 1.1m/s (load capacity), however loading by bamboo pole would slightly increase. 3. The rate of energy consumptions both increase with load increasing. Bamboo pole require more metabolic consumption than backpack with same load. 4. Since natural walking speed by bamboo pole faster than by backpack, the cost of transport by bamboo pole would be more economic than by backpack while the load is 50kg or more.
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Wang, Ming-xia, Yue Xu, and Xiao-feng Liu. "Analysis of the cost variance with moving weighted average method in logistics." In 2011 IEEE 18th International Conference on Industrial Engineering and Engineering Management. IEEE, 2011. http://dx.doi.org/10.1109/icieem.2011.6035179.
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Lastras-Montano, L. A., M. M. Franceschini, and T. Mittelholzer. "The capacity of the uniform noise rewritable channel with average cost." In 2010 IEEE International Symposium on Information Theory - ISIT. IEEE, 2010. http://dx.doi.org/10.1109/isit.2010.5513251.
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Khan, Hafiz Owais Ahmad, Muhammad Usman Tahir, Aleena Ahmad, and Naveed Arsh. "Reduction in Weighted Average Cost of Generation by Utilizing ToU Pricing Models: A Study from Pakistan." In 2022 11th International Conference on Renewable Energy Research and Application (ICRERA). IEEE, 2022. http://dx.doi.org/10.1109/icrera55966.2022.9922789.
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Zhang, Hongbao, Baoping Lu, Lulu Liao, Hongzhi Bao, Zhifa Wang, Xutian Hou, Amol Mulunjkar, and Xin Jin. "Combining Machine Learning and Classic Drilling Theories to Improve Rate of Penetration Prediction." In SPE/IADC Middle East Drilling Technology Conference and Exhibition. SPE, 2021. http://dx.doi.org/10.2118/202202-ms.
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Abstract Theoretically, rate of penetration (ROP) model is the basic to drilling parameters design, ROP improvement tools selection and drill time & cost estimation. Currently, ROP modelling is mainly conducted by two approaches: equation-based approach and machine learning approach, and machine learning performs better because of the capacity in high-dimensional and non-linear process modelling. However, in deep or deviated wells, the ROP prediction accuracy of machine learning is always unsatisfied mainly because the energy loss along the wellbore and drill string is non-negligible and it's difficult to consider the effect of wellbore geometry in machine learning models by pure data-driven methods. Therefore, it's necessary to develop robust ROP modelling method for different scenarios. In the paper, the performance of several equation-based methods and machine learning methods are evaluated by data from 82 wells, the technical features and applicable scopes of different methods are analysed. A new machine learning based ROP modelling method suitable for different well path types was proposed. Integrated data processing pipeline was designed to dealing with data noises, data missing, and discrete variables. ROP effecting factors were analysed, including mechanical parameters, hydraulic parameters, bit characteristics, rock properties, wellbore geometry, etc. Several new features were created by classic drilling theories, such as downhole weight on bit (DWOB), hydraulic impact force, formation heterogeneity index, etc. to improve the efficiency of learning from data. A random forest model was trained by cross validation and hyperparameters optimization methods. Field test results shows that the model could predict the ROP in different hole sections (vertical, deviated and horizontal) and different drilling modes (sliding and rotating drilling) and the average accuracy meets the requirement of well planning. A novel data processing and feature engineering workflow was designed according the characteristics of ROP modelling in different well path types. An integrated data-driven ROP modelling and optimization software was developed, including functions of mechanical specific energy analysis, bit wear analysis and predict, 2D & 3D ROP sensitivity analysis, offset wells benchmark, ROP prediction, drilling parameters constraints analysis, cost per meter prediction, etc. and providing quantitative evidences for drilling parameters optimization, drilling tools selection and well time estimation.
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Liu, Jiayun. "Application of Weighted Average Cost of Capital in European Market, Based on 2017 Great Portland Estate Plc (GPE)." In 2018 International Conference on Management, Economics, Education and Social Sciences (MEESS 2018). Paris, France: Atlantis Press, 2018. http://dx.doi.org/10.2991/meess-18.2018.48.
Full textReports on the topic "Weighted average cost of capacity"
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Pelletier, Austin, Amanda Hohner, Idil Deniz Akin, Indranil Chowdhury, Richard Watts, Xianming Shi, Brendan Dutmer, and James Mueller. Bench-scale Electrochemical Treatment of Co-contaminated Clayey Soil. Illinois Center for Transportation, June 2021. http://dx.doi.org/10.36501/0197-9191/21-018.
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Industrial soil contamination is frequently unearthed by transportation agencies during construction within the right-of-way. As a result, transportation agencies may experience construction delays. Soils co-contaminated with high-molecular-weight polycyclic aromatic hydrocarbons (HMW-PAHs) and metals are commonly encountered in Illinois and exhibit recalcitrance towards conventional treatment technologies. This issue is exacerbated in the fine-grained soils common to Illinois, where low-permeability and immense sorption capacity increase treatment complexity, cost, and duration. Contaminated sites are spatially and temporally restrictive and require rapid in situ treatments, whereas conventional soil remediation requires 1 to 3 years on average. Consequently, transportation agencies typically pursue excavation and off-site disposal for expediency. However, this solution is expensive, so a comparatively expeditious and affordable treatment alternative is needed to combat the increasing cost of hazardous waste disposal. The objective of this work was to develop an accelerated in situ treatment approach adaptable for use at any construction site to cost-effectively remove HMW-PAHs and metals from clayey soil. It was hypothesized that an in situ electrochemical treatment which augments electrokinetics with H2O2 could remediate both HMW-PAHs and metals in less than a month. Bench-scale reactors resemblant of field-scale in situ electrokinetic systems were designed and fabricated to assess the electrochemical treatment of clayey soils contaminated with HMW-PAHs and metals. Pyrene, chromium, and manganese were used as model contaminants, spiked into kaolinite as a model clay. Electrokinetics were imposed by a low-intensity electrical field distributed by graphite rods. Electrolytic H2O2 systems were leveraged to distribute electrical current and facilitate contaminant removal. Average contaminant removals of 100%, 42.3%, and 4.5% were achieved for pyrene, manganese, and chromium, respectively. Successful development of this bench-scale treatment approach will serve to guide transportation agencies in field-scale implementation. The results from this work signify that electrochemical systems that leverage eco-friendly oxidant addition can replace excavation and disposal as a means of addressing clayey soils co-contaminated with HMW-PAHs and metals.
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Ricciulli-Marín, Diana. The Fiscal Cost of Conflict: Evidence from La Violencia in Colombia. Banco de la República de Colombia, December 2020. http://dx.doi.org/10.32468/chee.53.
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This paper studies the effect of internal conflict on local fiscal capacity using evidence from Colombia’s political conflict in the mid-20th century, better known as La Violencia. Following a difference-in-differences strategy, I find that internal conflict has negative long-term consequences in local fiscal capacity. More precisely, municipalities affected by La Violencia experienced an average reduction of 10.3% in their tax revenue and a fall of 2.8 percentage points on their ratio of taxes to total revenue. Effects lasted for more than a decade and are only partially explained by a population and economic activity downturn. These results are consistent with previous evidence indicating a negative effect of violence on tax collection efficiency at the local level.
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Akinleye, Taiwo, Idil Deniz Akin, Amanda Hohner, Indranil Chowdhury, Richards Watts, Xianming Shi, Brendan Dutmer, James Mueller, and Will Moody. Evaluation of Electrochemical Treatment for Removal of Arsenic and Manganese from Field Soil. Illinois Center for Transportation, June 2021. http://dx.doi.org/10.36501/0197-9191/21-019.
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Soils containing inorganic compounds are frequently encountered by transportation agencies during construction within the right-of-way, and they pose a threat to human health and the environment. As a result, construction activities may experience project delays and increased costs associated with management of inorganic compounds containing soils required to meet environmental regulations. Recalcitrance of metal-contaminated soils toward conventional treatment technologies is exacerbated in clay or organic content-rich fine-grained soils with low permeability and high sorption capacity because of increased treatment complexity, cost, and duration. The objective of this study was to develop an accelerated in situ electrochemical treatment approach to extract inorganic compounds from fine-grained soils, with the treatment time comparable to excavation and off-site disposal. Three reactor experiments were conducted on samples collected from two borehole locations from a field site in Illinois that contained arsenic (As)(~7.4 mg/kg) and manganese (Mn)(~700 mg/kg). A combination of hydrogen peroxide (H2O2) and/or citrate buffer solution was used to treat the soils. A low-intensity electrical field was applied to soil samples using a bench-scale reactor that resembles field-scale in situ electrochemical systems. For the treatment using 10% H2O2 and citrate buffer solution, average removal of 23% and 8% were achieved for Mn and As, respectively. With 4% H2O2 and citrate buffer, 39% and 24% removal were achieved for Mn and As; while using only citrate buffer as the electrolyte, 49% and 9% removal were achieved for Mn and As, respectively. All chemical regimes adopted in this study reduced the inorganic compound concentrations to below the maximum allowable concentration for Illinois as specified by the Illinois Environmental Protection Agency. The results from this work indicate that electrochemical systems that leverage low concentrations of hydrogen peroxide and citrate buffer can be effective for remediating soils containing manganese and arsenic.
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Monetary Policy Report - April 2022. Banco de la República, June 2022. http://dx.doi.org/10.32468/inf-pol-mont-eng.tr2-2022.
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Macroeconomic summary Annual inflation continued to rise in the first quarter (8.5%) and again outpaced both market expectations and the technical staff’s projections. Inflation in major consumer price index (CPI) baskets has accelerated year-to-date, rising in March at an annual rate above 3%. Food prices (25.4%) continued to contribute most to rising inflation, mainly affected by a deterioration in external supply and rising costs of agricultural inputs. Increases in transportation prices and in some utility rates (energy and gas) can explain the acceleration in regulated items prices (8.3%). For its part, the increase in inflation excluding food and regulated items (4.5%) would be the result of shocks in supply and external costs that have been more persistent than expected, the effects of indexation, accumulated inflationary pressures from the exchange rate, and a faster-than-anticipated tightening of excess productive capacity. Within the basket excluding food and regulated items, external inflationary pressures have meaningfully impacted on goods prices (6.4%), which have been accelerating since the last quarter of 2021. Annual growth in services prices (3.8%) above the target rate is due primarily to food away from home (14.1%), which was affected by significant increases in food and utilities prices and by a rise in the legal monthly minimum wage. Housing rentals and other services prices also increased, though at rates below 3%. Forecast and expected inflation have increased and remain above the target rate, partly due to external pressures (prices and costs) that have been more persistent than projected in the January report (Graphs 1.1 and 1.2). Russia’s invasion of Ukraine accentuated inflationary pressures, particularly on international prices for certain agricultural goods and inputs, energy, and oil. The current inflation projection assumes international food prices will increase through the middle of this year, then remain high and relatively stable for the remainder of 2022. Recovery in the perishable food supply is forecast to be less dynamic than previously anticipated due to high agricultural input prices. Oil prices should begin to recede starting in the second half of the year, but from higher levels than those presented in the previous report. Given the above, higher forecast inflation could accentuate indexation effects and increase inflation expectations. The reversion of a rebate on value-added tax (VAT) applied to cleaning and hygiene products, alongside the end of Colombia’s COVID-19 health emergency, could increase the prices of those goods. The elimination of excess productive capacity on the forecast horizon, with an output gap close to zero and somewhat higher than projected in January, is another factor to consider. As a consequence, annual inflation is expected to remain at high levels through June. Inflation should then decline, though at a slower pace than projected in the previous report. The adjustment process of the monetary policy rate wouldcontribute to pushing inflation and its expectations toward the target on the forecast horizon. Year-end inflation for 2022 is expected to be around 7.1%, declining to 4.8% in 2023. Economic activity again outperformed expectations. The technical staff’s growth forecast for 2022 has been revised upward from 4.3% to 5% (Graph 1.3). Output increased more than expected in annual terms in the fourth quarter of 2021 (10.7%), driven by domestic demand that came primarily because of private consumption above pre-pandemic levels. Investment also registered a significant recovery without returning to 2019 levels and with mixed performance by component. The trade deficit increased, with significant growth in imports similar to that for exports. The economic tracking indicator (ISE) for January and February suggested that firstquarter output would be higher than previously expected and that the positive demand shock observed at the end of 2021 could be fading slower than anticipated. Imports in consumer goods, retail sales figures, real restaurant and hotel income, and credit card purchases suggest that household spending continues to be dynamic, with levels similar to those registered at the end of 2021. Project launch and housing starts figures and capital goods import data suggest that investment also continues to recover but would remain below pre-pandemic levels. Consumption growth is expected to decelerate over the year from high levels reached over the last two quarters. This would come amid tighter domestic and external financial conditions, the exhaustion of suppressed demand, and a deterioration of available household income due to increased inflation. Investment is expected to continue to recover, while the trade deficit should tighten alongside high oil and other export commodity prices. Given all of the above, first-quarter economic growth is now expected to be 7.2% (previously 5.2%) and 5.0% for 2022 as a whole (previously 4.3%). Output growth would continue to moderate in 2023 (2.9%, previously 3.1%), converging similar to long-term rates. The technical staff’s revised projections suggest that the output gap would remain at levels close to zero on the forecast horizon but be tighter than forecast in January (Graph 1.4). These estimates continue to be affected by significant uncertainty associated with geopolitical tensions, external financial conditions, Colombia’s electoral cycle, and the COVID-19 pandemic. External demand is now projected to grow at a slower pace than previously expected amid increased global inflationary pressures, high oil prices, and tighter international financial conditions than forecast in January. The Russian invasion of Ukraine and its inflationary effects on prices for oil and certain agricultural goods and inputs accentuated existing global inflationary pressures originating in supply restrictions and increased international costs. A decline in the supply of Russian oil, low inventory levels, and continued production limits on behalf of the Organization of Petroleum Exporting Countries and its allies (OPEC+) can explain increased projected oil prices for 2022 (USD 100.8/barrel, previously USD 75.3) and 2023 (USD 86.8/barrel, previously USD 71.2). The forecast trajectory for the U.S. Federal Reserve (Fed) interest rate has increased for this and next year to reflect higher real and expected inflation and positive performance in the labormarket and economic activity. The normalization of monetary policy in various developed and emerging market economies, more persistent supply and cost shocks, and outbreaks of COVID-19 in some Asian countries contributed to a reduction in the average growth outlook for Colombia’s trade partners for 2022 (2.8%, previously 3.3%) and 2023 (2.4%, previously 2.6%). In this context, the projected path for Colombia’s risk premium increased, partly due to increased geopolitical global tensions, less expansionary monetary policy in the United States, an increase in perceived risk for emerging markets, and domestic factors such as accumulated macroeconomic imbalances and political uncertainty. Given all the above, external financial conditions are tighter than projected in January report. External forecasts and their impact on Colombia’s macroeconomic scenario continue to be affected by considerable uncertainty, given the unpredictability of both the conflict between Russia and Ukraine and the pandemic. The current macroeconomic scenario, characterized by high real inflation levels, forecast and expected inflation above 3%, and an output gap close to zero, suggests an increased risk of inflation expectations becoming unanchored. This scenario offers very limited space for expansionary monetary policy. Domestic demand has been more dynamic than projected in the January report and excess productive capacity would have tightened more quickly than anticipated. Headline and core inflation rose above expectations, reflecting more persistent and important external shocks on supply and costs. The Russian invasion of Ukraine accentuated supply restrictions and pressures on international costs. This partly explains the increase in the inflation forecast trajectory to levels above the target in the next two years. Inflation expectations increased again and are above 3%. All of this increased the risk of inflation expectations becoming unanchored and could generate indexation effects that move inflation still further from the target rate. This macroeconomic context also implies reduced space for expansionary monetary policy. 1.2 Monetary policy decision Banco de la República’s board of directors (BDBR) continues to adjust its monetary policy. In its meetings both in March and April of 2022, it decided by majority to increase the monetary policy rate by 100 basis points, bringing it to 6.0% (Graph 1.5).
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Monetary Policy Report - July 2022. Banco de la República, October 2022. http://dx.doi.org/10.32468/inf-pol-mont-eng.tr3-2022.
Full textAbstract:
In the second quarter, annual inflation (9.67%), the technical staff’s projections and its expectations continued to increase, remaining above the target. International cost shocks, accentuated by Russia's invasion of Ukraine, have been more persistent than projected, thus contributing to higher inflation. The effects of indexation, higher than estimated excess demand, a tighter labor market, inflation expectations that continue to rise and currently exceed 3%, and the exchange rate pressures add to those described above. High core inflation measures as well as in the producer price index (PPI) across all baskets confirm a significant spread in price increases. Compared to estimates presented in April, the new forecast trajectory for headline and core inflation increased. This was partly the result of greater exchange rate pressure on prices, and a larger output gap, which is expected to remain positive for the remainder of 2022 and which is estimated to close towards yearend 2023. In addition, these trends take into account higher inflation rate indexation, more persistent above-target inflation expectations, a quickening of domestic fuel price increases due to the correction of lags versus the parity price and higher international oil price forecasts. The forecast supposes a good domestic supply of perishable foods, although it also considers that international prices of processed foods will remain high. In terms of the goods sub-basket, the end of the national health emergency implies a reversal of the value-added tax (VAT) refund applied to health and personal hygiene products, resulting in increases in the prices of these goods. Alternatively, the monetary policy adjustment process and the moderation of external shocks would help inflation and its expectations to begin to decrease over time and resume their alignment with the target. Thus, the new projection suggests that inflation could remain high for the second half of 2022, closing at 9.7%. However, it would begin to fall during 2023, closing the year at 5.7%. These forecasts are subject to significant uncertainty, especially regarding the future behavior of external cost shocks, the degree of indexation of nominal contracts and decisions made regarding the domestic price of fuels. Economic activity continues to outperform expectations, and the technical staff’s growth projections for 2022 have been revised upwards from 5% to 6.9%. The new forecasts suggest higher output levels that would continue to exceed the economy’s productive capacity for the remainder of 2022. Economic growth during the first quarter was above that estimated in April, while economic activity indicators for the second quarter suggest that the GDP could be expected to remain high, potentially above that of the first quarter. Domestic demand is expected to maintain a positive dynamic, in particular, due to the household consumption quarterly growth, as suggested by vehicle registrations, retail sales, credit card purchases and consumer loan disbursement figures. A slowdown in the machinery and equipment imports from the levels observed in March contrasts with the positive performance of sales and housing construction licenses, which indicates an investment level similar to that registered for the first three months of the year. International trade data suggests the trade deficit would be reduced as a consequence of import levels that would be lesser than those observed in the first quarter, and stable export levels. For the remainder of the year and 2023, a deceleration in consumption is expected from the high levels seen during the first half of the year, partially as a result of lower repressed demand, tighter domestic financial conditions and household available income deterioration due to increased inflation. Investment is expected to continue its slow recovery while remaining below pre-pandemic levels. The trade deficit is expected to tighten due to projected lower domestic demand dynamics, and high prices of oil and other basic goods exported by the country. Given the above, economic growth in the second quarter of 2022 would be 11.5%, and for 2022 and 2023 an annual growth of 6.9% and 1.1% is expected, respectively. Currently, and for the remainder of 2022, the output gap would be positive and greater than that estimated in April, and prices would be affected by demand pressures. These projections continue to be affected by significant uncertainty associated with global political tensions, the expected adjustment of monetary policy in developed countries, external demand behavior, changes in country risk outlook, and the future developments in domestic fiscal policy, among others. The high inflation levels and respective expectations, which exceed the target of the world's main central banks, largely explain the observed and anticipated increase in their monetary policy interest rates. This environment has tempered the growth forecast for external demand. Disruptions in value chains, rising international food and energy prices, and expansionary monetary and fiscal policies have contributed to the rise in inflation and above-target expectations seen by several of Colombia’s main trading partners. These cost and price shocks, heightened by the effects of Russia's invasion of Ukraine, have been more prevalent than expected and have taken place within a set of output and employment recovery, variables that in some countries currently equal or exceed their projected long-term levels. In response, the U.S. Federal Reserve accelerated the pace of the benchmark interest rate increase and rapidly reduced liquidity levels in the money market. Financial market actors expect this behavior to continue and, consequently, significantly increase their expectations of the average path of the Fed's benchmark interest rate. In this setting, the U.S. dollar appreciated versus the peso in the second quarter and emerging market risk measures increased, a behavior that intensified for Colombia. Given the aforementioned, for the remainder of 2022 and 2023, the Bank's technical staff increased the forecast trajectory for the Fed's interest rate and reduced the country's external demand growth forecast. The projected oil price was revised upward over the forecast horizon, specifically due to greater supply restrictions and the interruption of hydrocarbon trade between the European Union and Russia. Global geopolitical tensions, a tightening of monetary policy in developed economies, the increase in risk perception for emerging markets and the macroeconomic imbalances in the country explain the increase in the projected trajectory of the risk premium, its trend level and the neutral real interest rate1. Uncertainty about external forecasts and their consequent impact on the country's macroeconomic scenario remains high, given the unpredictable evolution of the conflict between Russia and Ukraine, geopolitical tensions, the degree of the global economic slowdown and the effect the response to recent outbreaks of the pandemic in some Asian countries may have on the world economy. This macroeconomic scenario that includes high inflation, inflation forecasts, and expectations above 3% and a positive output gap suggests the need for a contractionary monetary policy that mitigates the risk of the persistent unanchoring of inflation expectations. In contrast to the forecasts of the April report, the increase in the risk premium trend implies a higher neutral real interest rate and a greater prevailing monetary stimulus than previously estimated. For its part, domestic demand has been more dynamic, with a higher observed and expected output level that exceeds the economy’s productive capacity. The surprising accelerations in the headline and core inflation reflect stronger and more persistent external shocks, which, in combination with the strength of aggregate demand, indexation, higher inflation expectations and exchange rate pressures, explain the upward projected inflation trajectory at levels that exceed the target over the next two years. This is corroborated by the inflation expectations of economic analysts and those derived from the public debt market, which continued to climb and currently exceed 3%. All of the above increase the risk of unanchoring inflation expectations and could generate widespread indexation processes that may push inflation away from the target for longer. This new macroeconomic scenario suggests that the interest rate adjustment should continue towards a contractionary monetary policy landscape. 1.2. Monetary policy decision Banco de la República’s Board of Directors (BDBR), at its meetings in June and July 2022, decided to continue adjusting its monetary policy. At its June meeting, the BDBR decided to increase the monetary policy rate by 150 basis points (b.p.) and its July meeting by majority vote, on a 150 b.p. increase thereof at its July meeting. Consequently, the monetary policy interest rate currently stands at 9.0% . 1 The neutral real interest rate refers to the real interest rate level that is neither stimulative nor contractionary for aggregate demand and, therefore, does not generate pressures that lead to the close of the output gap. In a small, open economy like Colombia, this rate depends on the external neutral real interest rate, medium-term components of the country risk premium, and expected depreciation. Box 1: A Weekly Indicator of Economic Activity for Colombia Juan Pablo Cote Carlos Daniel Rojas Nicol Rodriguez Box 2: Common Inflationary Trends in Colombia Carlos D. Rojas-Martínez Nicolás Martínez-Cortés Franky Juliano Galeano-Ramírez Box 3: Shock Decomposition of 2021 Forecast Errors Nicolás Moreno Arias
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Monetary Policy Report - October 2022. Banco de la República Colombia, October 2022. http://dx.doi.org/10.32468/inf-pol-mont-eng.tr4-2022.
Full textAbstract:
1.1 Macroeconomic summary In September, headline inflation (11.4% annually) and the average of core inflation indicators (8.6% annually) continued on a rising trend, and higher increases than expected were recorded. Forecasts increased again, and inflation expectations remained above 3%. Inflationary surprises in the third quarter were significant and widespread, and they are the result of several shocks. On the one hand, international cost and price shocks, which have mainly affected goods and foods, continue to exert upwards pressure on national inflation. In addition to these external supply shocks, domestic supply shocks have also affected foods. On the other hand, the strong recovery of aggregate demand, especially for private consumption and for machinery and equipment, as well as a higher accumulated depreciation of the Colombian peso and its pass-through to domestic prices also explain the rise in inflation. Indexation also contributes, both through the Consumer Price Index (CPI) and through the Producer Price Index (PPI), which continues to have a significant impact on electricity prices and, to a lesser degree, on other public utilities and rent. In comparison with July’s report, the new forecast trajectory for headline and core inflation (excluding food and regulated items) is higher in the forecast horizon, mainly due to exchange rate pressures, higher excess demand, and indexation at higher inflation rates, but it maintains a trend of convergence towards the target. In the case of food, a good domestic supply of perishable foods and some moderation in international processed food prices are still expected. However, the technical staff estimates higher pressures on this group’s prices from labor costs, raw material prices, and exchange rates. In terms of the CPI for regulated items, the new forecast supposes reductions in electricity prices at the end of the year, but the effects of indexation at higher inflation rates and the expected rises in fuel prices would continue to push this CPI group. Therefore, the new projection suggests that, in December, inflation would reach 11.3% and would decrease throughout 2023 and 2024, closing the year at 7.1% and 3.5%, respectively. These forecasts have a high level of uncertainty, due especially to the future behavior of international financial conditions, external price and cost shocks, the persistence of depreciation of the Colombian peso, the pace of adjustment of domestic demand, the indexation degree of nominal contracts, and the decisions that would be made regarding domestic fuel and electricity prices. Economic activity continues to surprise on the upside, and the projection of growth for 2022 rose from 6.9% to 7.9% but lowered for 2023 from 1.1% to 0.5%. Thus, excess demand is higher than estimated in the previous report, and it would diminish in 2023. Economic growth in the second quarterwas higher than estimated in July due to stronger domestic demand, mainly because of private consumption. Economic activity indicators for the third quarter suggest that the GDP would stay at a high level, above its potential, with an annual change of 6.4%, and 0.6% higher than observed in the second quarter. Nevertheless, these numbers reflect deceleration in its quarterly and annual growth. Domestic demand would show similar behavior, with a high value, higher than that of output. This can be explained partly by the strong behavior of private consumption and investment in machinery and equipment. In the third quarter, investment in construction would have continued with mediocre performance, which would still place it at levels lower than those observed before the pandemic. The trade deficit would have widened due to high imports with a stronger trend than that for exports. It is expected that, in the forecast horizon, consumption would decrease from its current high levels, partly as a consequence of tighter domestic financial conditions, lower repressed demand, higher exchange rate pressures on imported goods prices, and the deterioration of actual income due to the rise in inflation. Investment would continue to lag behind, without reaching the levels observed before the pandemic, in a context of high financing costs and high uncertainty. A lower projected behavior in domestic demand and the high levels of prices for oil and other basic goods that the country exports would be reflected in a reduction in the trade deficit. Due to all of this, economic growth for all of 2022, 2023, and 2024 would be 7.9%, 0.5%, and 1.3%, respectively. Expected excess demand (measured via the output gap) is estimated to be higher than contemplated in the previous report; it would diminish in 2023 and could turn negative in 2024. These estimates remain subject to a high degree of uncertainty related to global political tension, a rise in international interest rates, and the effects of this rise on demand and financial conditions abroad. In the domestic context, the evolution of fiscal policy as well as future measures regarding economic policy and their possible effects on macroeconomic imbalances in the country, among others, are factors that generate uncertainty and affect risk premia, the exchange rate, investment, and the country’s economic activity. Interest rates at several of the world’s main central banks continue to rise, some at a pace higher than expected by the market. This is in response to the high levels of inflation and their inflation expectations, which continue to exceed the targets. Thus, global growth projections are still being moderated, risk premia have risen, and the dollar continues to gain strength against other main currencies. International pressures on global inflation have heightened. In the United States, core inflation has not receded, pressured by the behavior of the CPI for services and a tight labor market. Consequently, the U.S. Federal Reserve continued to increase the policy interest rate at a strong pace. This rate is expected to now reach higher levels than projected in the previous quarter. Other developed and emerging economies have also increased their policy interest rates. Thus, international financial conditions have tightened significantly, which reflects in a widespread strengthening of the dollar, increases in worldwide risk premia, and the devaluation of risky assets. Recently, these effects have been stronger in Colombia than in the majority of its peers in the region. Considering all of the aforementioned, the technical staff of the bank increased its assumption regarding the U.S. Federal Reserve’s interest rate, reduced the country’s external demand growth forecast, and raised the projected trajectory for the risk premium. The latter remains elevated at higher levels than its historical average, within a context of high local uncertainty and of extensive financing needs from the foreign sector and the public sector. All of this results in higher inflationary pressures associated to the depreciation of the Colombian peso. The uncertainty regarding external forecasts and its impact on the country remain elevated, given the unforeseeable evolution of the conflict between Russia and Ukraine, of geopolitical tensions, and of the tightening of external financial conditions, among others. A macroeconomic context of high inflation, inflation expectations and forecasts above 3%, and a positive output gap suggests the need for contractionary monetary policy, compatible with the macroeconomic adjustment necessary to eliminate excess demand, mitigate the risk of unanchoring in inflation expectations, and guarantee convergence of inflation at the target. In comparison with the July report forecasts, domestic demand has been more dynamic, with a higher observed output level that surpasses the economy’s productive capacity. Headline and core inflation have registered surprising rises, associated with the effects of domestic and external price shocks that were more persistent than anticipated, with excess demand and indexation processes in some CPI groups. The country’s risk premium and the observed and expected international interest rates increased. As a consequence of this, inflationary pressures from the exchange rate rose, and in this report, the probability of the neutral real interest rate being higher than estimated increased. In general, inflation expectations for all terms and the bank’s technical staff inflation forecast for 2023 increased again and continue to stray from 3%. All of the aforementioned elevated the risk of unanchoring inflation expectations and could heighten widespread indexation processes that push inflation away from the target for a longer time. In this context, it is necessary to consolidate a contractionary monetary policy that tends towards convergence of inflation at the target in the forecast horizon and towards the reduction of excess demand in order to guarantee a sustainable output level trajectory. 1.2 Monetary policy decision In its September and October of 2022 meetings, Banco de la República’s Board of Directors (BDBR) decided to continue adjusting its monetary policy. In September, the BDBR decided by a majority vote to raise the monetary policy interest rate by 100 basis points (bps), and in its October meeting, unanimously, by 100bps. Therefore, the rate is at 11.0%. Boxes 1 Food inflation: a comparison with other countries