A modell of socially optimal hydro reservoir usage - yelding socially optimal outcomes in nordic electricity markets

An extensive electricity transmission network facilitates electricity trading between Finland, Sweden, Norway and Denmark. Currently most of the area's power generation is traded at NordPool, where the trading volumes have steadily increased since the early 1990's, when the exchange was founded. The Nordic electricity is expected to follow the current trend and further integrate with the other European electricity markets. Hydro power is the source for roughly a half of the supply in the Nordic electricity market and most of the hydro is generated in Norway. The dominating role of hydro power distinguishes the Nordic electricity market from most of the other market places. Production of hydro power varies mainly due to hydro reservoirs and demand for electricity. Hydro reservoirs are affected by water inflows that differ each year. The hydro reservoirs explain remarkably the behaviour of the Nordic electricity markets. Therefore among others, Kauppi and Liski (2008) have developed a model that analyzes the behaviour of the markets using hydro reservoirs as explanatory factors. Their model includes, for example, welfare loss due to socially suboptimal hydro reservoir usage, socially optimal electricity price, hydro reservoir storage and thermal reservoir storage; that are referred as outcomes. However, the model does not explain the real market condition but rather an ideal situation. In the model the market is controlled by one agent, i.e. one agent controls all the power generation reserves; it is referred to as a socially optimal strategy. Article by Kauppi and Liski (2008) includes an assumption where an individual agent has a certain fraction of market power, e.g. 20 % or 30 %. In order to maintain the focus of this thesis, this part of their paper is omitted. The goal of this thesis is two-fold. Firstly we expand the results from the socially optimal strategy for years 2006-08, as the earlier study finishes in 2005. The second objective is to improve on the methods from the previous study. This thesis results several outcomes (SPOT-price and welfare loss, etc.) due to socially optimal actions. Welfare loss is interesting as it describes the inefficiency of the market. SPOT-price is an important output for the market participants as it often has an effect on end users' electricity bills. Another function is to modify and try to improve the model by means of using more accurate input data, e.g. by considering pollution trade rights effect on input data. After modifications to the model, new welfare losses are calculated and compared with the same results before the modifications. The hydro reservoir has the higher explanatory significance in the model followed by thermal power. In Nordic markets, thermal power reserves are mostly nuclear power and other thermal sources (coal, natural gas, oil, peat). It can be argued that hydro and thermal reservoirs determine electricity supply. Roughly speaking, the model takes into account electricity demand and supply, and several parameters related to them (water inflow, oil price, etc.), yielding finally the socially optimal outcomes. The author of this thesis is not aware of any similar model being tested before. There have been some other studies that are close to the Kauppi and Liski (2008) model, but those have a somewhat different focus. For example, a specific feature in the model is the focus on long-run capacity usage that differs from the previous studies on short-run market power. The closest study to the model is from California's wholesale electricity markets that, however, uses different methodology. Work is constructed as follows.

An optimal local approximation algorithm for max-min linear programs

In a max-min LP, the objective is to maximise ω subject to Ax ≤ 1, Cx ≥ ω1, and x ≥ 0 for nonnegative matrices A and C. We present a local algorithm (constant-time distributed algorithm) for approximating max-min LPs. The approximation ratio of our algorithm is the best possible for any local algorithm; there is a matching unconditional lower bound.

Optimal Use of Treatment Modalities and Treatment Results of Osteosarcoma and Soft Tissue Sarcomas

Soft tissue sarcomas are malignant tumours of mesenchymal origin. Because of infiltrative growth pattern, simple enucleation of the tumour causes a high rate of local recurrence. Instead, these tumours should be resected with a rim of normal tissue around the tumour. Data on the adequate margin width are scarce. At Helsinki University Central Hospital (HUCH) a multidisciplinary treatment group started in 1987. Surgical resection with a wide margin (2.5 cm) is the primary aim. In case of narrower margin radiation therapy is necessary. The role of adjuvant chemotherapy remains unclear. Our aims were to study local control by the surgical margin and to develop a new prognostic tool to aid decision-making on which patients should receive adjuvant chemotherapy. Patients with soft tissue sarcoma of the extremity or the trunk wall referred to HUCH during 1987-2002 form material in Studies I and II. External validation material comes from the Lund university sarcoma registry. The smallest surgical margin of at least 2.5 centimetres yielded local control of 89 per cent at five years. Amputation rate was 9 per cent. The proposed prognostic model with necrosis, vascular invasion, size on a continuous scale, depth, location and grade worked well both in Helsinki material and in the validation material, and it also showed good calibration. Based on the present study, we recommend the smallest surgical margin of 2-3 centimetres in soft tissue sarcoma irrespective of grade. Improvement in local control was present but modest in margins wider than 1 centimetre. In cases where gaining a wider margin would lead to a considerable loss of function, smaller margin is to be considered combined to radiation therapy. Patients treated with inadequate margins should be offered radiation therapy irrespective of tumour grade. Our new prognostic model to estimate 10-year survival probability in patients with soft tissue sarcoma of the extremities or trunk wall showed good dicscrimination and calibration. For time being the prognostic model is available for scientific use and further validations. In the future, the model may aid in clinical decision-making. For operable osteosarcoma, neoadjuvant multidrug chemotherapy followed by delayed surgery and multidrug adjuvant chemotherapy is the treatment of choice. Overall survival rates at five years are approximately 75 per cent in modern trials with classical osteosarcoma. All patients diagnosed and reported to the Finnish Cancer Registry with osteosarcoma in Finland during 1971-2005 form the material in Studies III and IV. Limb-salvage rate increased from 23 per cent to 78 per cent during 1971-2005. The 10-year sarcoma-specific survival for the whole study population improved from 32 per cent to 62 per cent. It was 75 per cent for patients with a local high-grade osteosarcoma of the extremity diagnosed during 1991-2005. This study outlines the improved prognosis of osteosarcoma patients in Finland with modern chemotherapy. The 10-year survival rates are good also in an international scale. Nonetheless, their limb-salvage rate remains inferior to those seen for highly selected patient series. Overall, the centralisation of osteosarcoma treatment would most likely improve both survival and limb-salvage rates even further.

Optimal multispecies fishery management in the Baltic Sea: A bioeconomic analysis

The aim of the thesis is to assess the fishery of Baltic cod, herring and sprat by simulation over 50 years time period. We form a bioeconomic multispecies model for the species. We include species interactions into the model because especially cod and sprat stocks have significant effects on each other. We model the development of population dynamics, catches and profits of the fishery with current fishing mortalities, as well as with the optimal profit maximizing fishing mortalities. Thus, we see how the fishery would develop with current mortalities, and how the fishery should be developed in order to yield maximal profits. Especially cod stock has been quite low recently and by optimizing the fishing mortality it could get recovered. In addition, we assess what would happen to the fisheries of the species if more favourable environmental conditions for cod recruitment dominate in the Baltic Sea. The results may yield new information for the fisheries management. According to the results the fishery of Baltic cod, herring and sprat are not at the most profitable level. The fishing mortalities of each species should be lower in order to maximize the profits. By fishing mortality optimizing the net present value would be almost three times higher in the simulation period. The lower fishing mortality of cod would result in a cod stock recovery. If the environmental conditions in the Baltic Sea improved, cod stock would recover even without a decrease in the fishing mortality. Then the increased cod stock would restrict herring and sprat stock remarkably, and harvesting of these species would not be as profitable anymore.