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.

In the Shadow of Freedom : Life on board the oil tanker

The aim of this study was to look at the freedom of ordinary people as they construct it. The scope, however, was limited to contemporary Finnish sailors and their freedom discourses. The study belongs to the field of the anthropology of religions, which is part of comparative religion. Worldview, which is one of the key concepts in comparative religion, provided the broader theoretical basis of the study. The data consisted of 92 interviews with Finnish professional seafarers conducted in 1996, 1999, 2000 and 2005, field journals that were written during two periods of fieldwork in 1996 and 1999-2000, and correspondence with some of the seafarers during 1999-2005. The analysis process incorporated new rhetoric and metaphor theory. The thesis is in three parts. The first part discusses the methodological challenges of this type of ethnography, the second an ethnography of modern Finnish shipworld focuses on work, organization, hierarchy and gender, and the third part discusses the freedom concepts of seafarers. It was found that seafarers use two kinds of freedom discourse. The first is in line with the stereotypical Jack Tar, a free-roving sailor who is not bound to land and its mundane routines, and the second views shipworld as freedom from freedom, meaning one is not responsible for one s own actions because one is not free to make a choice. It was also found that seafarers are well aware of the stereotypical images that are attached to their profession: they not only deny them, but also utilize, reflect on and construct them.

Uncertainty in forest simulators and forest planning systems

The forest simulator is a computerized model for predicting forest growth and future development as well as effects of forest harvests and treatments. The forest planning system is a decision support tool, usually including a forest simulator and an optimisation model, for finding the optimal forest management actions. The information produced by forest simulators and forest planning systems is used for various analytical purposes and in support of decision making. However, the quality and reliability of this information can often be questioned. Natural variation in forest growth and estimation errors in forest inventory, among other things, cause uncertainty in predictions of forest growth and development. This uncertainty stemming from different sources has various undesirable effects. In many cases outcomes of decisions based on uncertain information are something else than desired. The objective of this thesis was to study various sources of uncertainty and their effects in forest simulators and forest planning systems. The study focused on three notable sources of uncertainty: errors in forest growth predictions, errors in forest inventory data, and stochastic fluctuation of timber assortment prices. Effects of uncertainty were studied using two types of forest growth models, individual tree-level models and stand-level models, and with various error simulation methods. New method for simulating more realistic forest inventory errors was introduced and tested. Also, three notable sources of uncertainty were combined and their joint effects on stand-level net present value estimates were simulated. According to the results, the various sources of uncertainty can have distinct effects in different forest growth simulators. The new forest inventory error simulation method proved to produce more realistic errors. The analysis on the joint effects of various sources of uncertainty provided interesting knowledge about uncertainty in forest simulators.

Molecular Biomonitoring during Rhizoremediation of Oil-Contaminated Soil

Rhizoremediation is the use of microbial populations present in the rhizosphere of plants for environmental cleanup. The idea of this work was that bacteria living in the rhizosphere of a nitrogen-fixing leguminous plant, goat's rue (Galega orientalis), could take part in the degradation of harmful monoaromatic hydrocarbons, such as benzene, toluene and xylene (BTEX), from oil-contaminated soils. In addition to chemical (e.g. pollutant concentration) and physical (e.g. soil structure) information, the knowledge of biological aspects (e.g. bacteria and their catabolic genes) is essential when developing the rhizoremediation into controlled and effective bioremediation practice. Therefore, the need for reliable biomonitoring methods is obvious. The main aims of this thesis were to evaluate the symbiotic G. orientalis - Rhizobium galegae system for rhizoremediation of oil-contaminated soils, to develop molecular methods for biomonitoring, and to apply these methods for studying the microbiology of rhizoremediation. In vitro, Galega plants and rhizobia remained viable in m-toluate concentrations up to 3000 mg/l. Plant growth and nodulation were inhibited in 500 mg/l m-toluate, but were restored when plants were transferred to clean medium. In the greenhouse, Galega showed good growth, nodulation and nitrogen fixation, and developed a strong rhizosphere in soils contaminated with oil or spiked with 2000 mg/l m-toluate. The high aromatic tolerance of R. galegae and the viability of Galega plants in oil-polluted soils proved this legume system to be a promising method for the rhizoremediation of oil-contaminated soils. Molecular biomonitoring methods were designed and/or developed further for bacteria and their degradation genes. A combination of genomic fingerprinting ((GTG)5-PCR), taxonomic ribotyping of 16S rRNA genes and partial 16S rRNA gene sequencing were chosen for molecular grouping of culturable, heterogeneous rhizosphere bacteria. PCR primers specific for the xylE gene were designed for TOL plasmid detection. Amplified enzyme-coding DNA restriction analysis (AEDRA) with AluI was used to profile both TOL plasmids (xylE primers) and, in general, aromatics-degrading plasmids (C230 primers). The sensitivity of the direct monitoring of TOL plasmids in soil was enhanced by nested C23O-xylE-PCR. Rhizosphere bacteria were isolated from the greenhouse and field lysimeter experiments. High genetic diversity was observed among the 50 isolated, m-toluate tolerating rhizosphere bacteria in the form of five major lineages of the Bacteria domain. Gram-positive Rhodococcus, Bacillus and Arthrobacter and gram-negative Pseudomonas were the most abundant genera. The inoculum Pseudomonas putida PaW85/pWW0 was not found in the rhizosphere samples. Even if there were no ecological niches available for the bioaugmentation bacterium itself, its conjugative catabolic plasmid might have had some additional value for other bacterial species and thus, for rhizoremediation. Only 10 to 20% of the isolated, m-toluate tolerating bacterial strains were also able to degrade m-toluate. TOL plasmids were a major group of catabolic plasmids among these bacteria. The ability to degrade m-toluate by using enzymes encoded by a TOL plasmid was detected only in species of the genus Pseudomonas, and the best m-toluate degraders were these Pseudomonas species. Strain-specific differences in degradation abilities were found for P.oryzihabitans and P. migulae: some of these strains harbored a TOL plasmid - a new finding observed in this work, indicating putative horizontal plasmid transfer in the rhizosphere. One P. oryzihabitans strain harbored the pWW0 plasmid that had probably conjugated from the bioaugmentation Pseudomonas. Some P. migulae and P. oryzihabitans strains seemed to harbor both the pWW0- and the pDK1-type TOL plasmid. Alternatively, they might have harbored a TOL plasmid with both the pWW0- and the pDK1-type xylE gene. The breakdown of m-toluate by gram-negative bacteria was not restricted to the TOL pathway. Also some gram-positive Rhodococcus erythropolis and Arthrobacter aurescens strains were able to degrade m-toluate in the absence of a TOL plasmid. Three aspects of the rhizosphere effect of G. orientalis were manifested in oil-contaminated soil in the field: 1) G. orientalis and Pseudomonas bioaugmentation increased the amount of rhizosphere bacteria. G. orientalis especially together with Pseudomonas bioaugmentation increased the numbers of m-toluate utilizing and catechol positive bacteria indicating an increase in degradation potential. 2) Also the bacterial diversity, when measured as the amount of ribotypes, was increased in the Galega rhizosphere with or without Pseudomonas bioaugmentation. However, the diversity of m-toluate utilizing bacteria did not significantly increase. At the community level, by using the 16S rRNA gene PCR-DGGE method, the highest diversity of species was also observed in vegetated soils compared with non-vegetated soils. Diversified communities may best guarantee the overall success in rhizoremediation by offering various genetic machineries for catabolic processes. 3) At the end of the experiment, no TOL plasmid could be detected by direct DNA analysis in soil treated with both G. orientalis and Pseudomonas. The detection limit for TOL plasmids was encountered indicating decreased amount of degradation plasmids and thus, the success of rhizoremediation. The use of G. orientalis for rhizoremediation is unique. In this thesis new information was obtained about the rhizosphere effect of Galega orientalis in BTEX contaminated soils. The molecular biomonitoring methods can be applied for several purposes within environmental biotechnology, such as for evaluating the intrinsic biodegradation potential, monitoring the enhanced bioremediation, and estimating the success of bioremediation. Environmental protection by using nature's own resources and thus, acting according to the principle of sustainable development, would be both economically and environmentally beneficial for society. Keywords: molecular biomonitoring, genetic fingerprinting, soil bacteria, bacterial diversity, TOL plasmid, catabolic genes, horizontal gene transfer, rhizoremediation, rhizosphere effect, Galega orientalis, aerobic biodegradation, petroleum hydrocarbons, BTEX

Valuation of reduced eutrophication in the Gulf of Finland : Choice experiment with attention to heterogeneous and discontinuous preferences and respondent uncertainty

Eutrophication of the Baltic Sea is a serious problem. This thesis estimates the benefit to Finns from reduced eutrophication in the Gulf of Finland, the most eutrophied part of the Baltic Sea, by applying the choice experiment method, which belongs to the family of stated preference methods. Because stated preference methods have been subject to criticism, e.g., due to their hypothetical survey context, this thesis contributes to the discussion by studying two anomalies that may lead to biased welfare estimates: respondent uncertainty and preference discontinuity. The former refers to the difficulty of stating one s preferences for an environmental good in a hypothetical context. The latter implies a departure from the continuity assumption of conventional consumer theory, which forms the basis for the method and the analysis. In the three essays of the thesis, discrete choice data are analyzed with the multinomial logit and mixed logit models. On average, Finns are willing to contribute to the water quality improvement. The probability for willingness increases with residential or recreational contact with the gulf, higher than average income, younger than average age, and the absence of dependent children in the household. On average, for Finns the relatively most important characteristic of water quality is water clarity followed by the desire for fewer occurrences of blue-green algae. For future nutrient reduction scenarios, the annual mean household willingness to pay estimates range from 271 to 448 and the aggregate welfare estimates for Finns range from 28 billion to 54 billion euros, depending on the model and the intensity of the reduction. Out of the respondents (N=726), 72.1% state in a follow-up question that they are either Certain or Quite certain about their answer when choosing the preferred alternative in the experiment. Based on the analysis of other follow-up questions and another sample (N=307), 10.4% of the respondents are identified as potentially having discontinuous preferences. In relation to both anomalies, the respondent- and questionnaire-specific variables are found among the underlying causes and a departure from standard analysis may improve the model fit and the efficiency of estimates, depending on the chosen modeling approach. The introduction of uncertainty about the future state of the Gulf increases the acceptance of the valuation scenario which may indicate an increased credibility of a proposed scenario. In conclusion, modeling preference heterogeneity is an essential part of the analysis of discrete choice data. The results regarding uncertainty in stating one s preferences and non-standard choice behavior are promising: accounting for these anomalies in the analysis may improve the precision of the estimates of benefit from reduced eutrophication in the Gulf of Finland.

The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.

Environmental factors and uncertainty in fisheries management in the northern Baltic Sea

The Baltic Sea is a geologically young, large brackish water basin, and few of the species living there have fully adapted to its special conditions. Many of the species live on the edge of their distribution range in terms of one or more environmental variables such as salinity or temperature. Environmental fluctuations are know to cause fluctuations in populations abundance, and this effect is especially strong near the edges of the distribution range, where even small changes in an environmental variable can be critical to the success of a species. This thesis examines which environmental factors are the most important in relation to the success of various commercially exploited fish species in the northern Baltic Sea. It also examines the uncertainties related to fish stocks current and potential status as well as to their relationship with their environment. The aim is to quantify the uncertainties related to fisheries and environmental management, to find potential management strategies that can be used to reduce uncertainty in management results and to develop methodology related to uncertainty estimation in natural resources management. Bayesian statistical methods are utilized due to their ability to treat uncertainty explicitly in all parts of the statistical model. The results show that uncertainty about important parameters of even the most intensively studied fish species such as salmon (Salmo salar L.) and Baltic herring (Clupea harengus membras L.) is large. On the other hand, management approaches that reduce uncertainty can be found. These include utilising information about ecological similarity of fish stocks and species, and using management variables that are directly related to stock parameters that can be measured easily and without extrapolations or assumptions.

Good Lives, Hidden Miseries : An Ethnography of Uncertainty in a Finnish Village

This is an ethnographic study, in the field of medical anthropology, of village life among farmers in southwest Finland. It is based on 12 months of field work conducted 2002-2003 in a coastal village. The study discusses how social and cultural change affects the life of farmers, how they experience it and how they act in order to deal with the it. Using social suffering as a methodological approach the study seeks to investigate how change is related to lived experiences, idioms of distress, and narratives. Its aim has been to draw a locally specific picture of what matters are at stake in the local moral world that these farmers inhabit, and how they emerge as creative actors within it. A central assumption made about change is that it is two-fold; both a constructive force which gives birth to something new, and also a process that brings about uncertainty regarding the future. Uncertainty is understood as an existential condition of human life that demands a response, both causing suffering and transforming it. The possibility for positive outcomes in the future enables one to understand this small suffering of everyday life both as a consequence of social change, which fragments and destroys, and as an answer to it - as something that is positively meaningful. Suffering is seen to engage individuals to ensure continuity, in spite of the odds, and to sustain hope regarding the future. When the fieldwork was initiated Finland had been a member of the European Union for seven years and farmers felt it had substantially impacted on their working conditions. They complained about the restrictions placed on their autonomy and that their knowledge was neither recognised, nor respected by the bureaucrats of the EU system. New regulations require them to work in a manner that is morally unacceptable to them and financial insecurity has become more prominent. All these changes indicate the potential loss of the home and of the ability to ensure continuity of the family farm. Although the study initially focused on getting a general picture of working conditions and the nature of farming life, during the course of the fieldwork there was repeated mention of a perceived high prevalence of cancer in the area. This cancer talk is replete with metaphors that reveal cultural meanings tied to the farming life and the core values of autonomy, endurance and permanence. It also forms the basis of a shared identity and a means of delivering a moral message about the fragmentation of the good life; the loss of control; and the invasion of the foreign. This thesis formed part of the research project Expressions of Suffering. Ethnographies of Illness Experiences in Contemporary Finnish Contexts funded by the Academy of Finland. It opens up a vital perspective on the multiplicity and variety of the experience of suffering and that it is particularly through the use of the ethnographic method that these experiences can be brought to light. Keywords: suffering, uncertainty, phenomenology, habitus, agency, cancer, farming

The effects of the 2004 reduction in the price of alcohol on alcohol-related harm in Finland : A natural experiment based on register data

Changes in alcohol pricing have been documented as inversely associated with changes in consumption and alcohol-related problems. Evidence of the association between price changes and health problems is nevertheless patchy and is based to a large extent on cross-sectional state-level data, or time series of such cross-sectional analyses. Natural experimental studies have been called for. There was a substantial reduction in the price of alcohol in Finland in 2004 due to a reduction in alcohol taxes of one third, on average, and the abolition of duty-free allowances for travellers from the EU. These changes in the Finnish alcohol policy could be considered a natural experiment, which offered a good opportunity to study what happens with regard to alcohol-related problems when prices go down. The present study investigated the effects of this reduction in alcohol prices on (1) alcohol-related and all-cause mortality, and mortality due to cardiovascular diseases, (2) alcohol-related morbidity in terms of hospitalisation, (3) socioeconomic differentials in alcohol-related mortality, and (4) small-area differences in interpersonal violence in the Helsinki Metropolitan area. Differential trends in alcohol-related mortality prior to the price reduction were also analysed. A variety of population-based register data was used in the study. Time-series intervention analysis modelling was applied to monthly aggregations of deaths and hospitalisation for the period 1996-2006. These and other mortality analyses were carried out for men and women aged 15 years and over. Socioeconomic differentials in alcohol-related mortality were assessed on a before/after basis, mortality being followed up in 2001-2003 (before the price reduction) and 2004-2005 (after). Alcohol-related mortality was defined in all the studies on mortality on the basis of information on both underlying and contributory causes of death. Hospitalisation related to alcohol meant that there was a reference to alcohol in the primary diagnosis. Data on interpersonal violence was gathered from 86 administrative small-areas in the Helsinki Metropolitan area and was also assessed on a before/after basis followed up in 2002-2003 and 2004-2005. The statistical methods employed to analyse these data sets included time-series analysis, and Poisson and linear regression. The results of the study indicate that alcohol-related deaths increased substantially among men aged 40-69 years and among women aged 50-69 after the price reduction when trends and seasonal variation were taken into account. The increase was mainly attributable to chronic causes, particularly liver diseases. Mortality due to cardiovascular diseases and all-cause mortality, on the other hand, decreased considerably among the-over-69-year-olds. The increase in alcohol-related mortality in absolute terms among the 30-59-year-olds was largest among the unemployed and early-age pensioners, and those with a low level of education, social class or income. The relative differences in change between the education and social class subgroups were small. The employed and those under the age of 35 did not suffer from increased alcohol-related mortality in the two years following the price reduction. The gap between the age and education groups, which was substantial in the 1980s, thus further broadened. With regard to alcohol-related hospitalisation, there was an increase in both chronic and acute causes among men under the age of 70, and among women in the 50-69-year age group when trends and seasonal variation were taken into account. Alcohol dependence and other alcohol-related mental and behavioural disorders were the largest category in both the total number of chronic hospitalisation and in the increase. There was no increase in the rate of interpersonal violence in the Helsinki Metropolitan area, and even a decrease in domestic violence. There was a significant relationship between the measures of social disadvantage on the area level and interpersonal violence, although the differences in the effects of the price reduction between the different areas were small. The findings of the present study suggest that that a reduction in alcohol prices may lead to a substantial increase in alcohol-related mortality and morbidity. However, large population group differences were observed regarding responsiveness to the price changes. In particular, the less privileged, such as the unemployed, were most sensitive. In contrast, at least in the Finnish context, the younger generations and the employed do not appear to be adversely affected, and those in the older age groups may even benefit from cheaper alcohol in terms of decreased rates of CVD mortality. The results also suggest that reductions in alcohol prices do not necessarily affect interpersonal violence. The population group differences in the effects of the price changes on alcohol-related harm should be acknowledged, and therefore the policy actions should focus on the population subgroups that are primarily responsive to the price reduction.