Impacts of increased levels of wind penetration on the Electric Power System of the Åland Islands

The application of VSC-HVDC technology throughout the world has turned out to be an efficient solution regarding a large share of wind power in different power systems. This technology enhances the overall reliability of the grid by utilization of the active and reactive power control schemes which allows to maintain frequency and voltage on busbars of the end-consumers at the required level stated by the network operator. This master’s thesis is focused on the existing and planned wind farms as well as electric power system of the Åland Islands. The goal is to analyze the wind conditions of the islands and appropriately predict a possible production of the existing and planned wind farms with a help of WAsP software program. Further, to investigate the influence of increased wind power it is necessary to develop a simulation model of the electric grid and VSC-HVDC system in PSCAD and examine grid response to different wind power production cases with respect to the grid code requirements and ensure the stability of the power system.

Uncertainty of Efficiency Measurements in Electric Drives

The two central goals of this master's thesis are to serve as a guidebook on the determination of uncertainty in efficiency measurements and to investigate sources of uncertainty in efficiency measurements in the field of electric drives by a literature review, mathematical modeling and experimental means. The influence of individual sources of uncertainty on the total instrumental uncertainty is investigated with the help of mathematical models derived for a balance and a direct air cooled calorimeter. The losses of a frequency converter and an induction motor are measured with the input-output method and a balance calorimeter at 50 and 100 % loads. A software linking features of Matlab and Excel is created to process measurement data, calculate uncertainties and to calculate and visualize results. The uncertainties are combined with both the worst case and the realistic perturbation method and distributions of uncertainty by source are shown based on experimental results. A comparison of the calculated uncertainties suggests that the balance calorimeter determines losses more accurately than the input-output method with a relative RPM uncertainty of 1.46 % compared to 3.78 - 12.74 % respectively with 95 % level of confidence at the 93 % induction motor efficiency or higher. As some principles in uncertainty analysis are open to interpretation the views and decisions of the analyst can have noticeable influence on the uncertainty in the measurement result.

Finnish perceptions on management accounting systems: towards an upgraded sophistication model

This study is based on a large survey study of over 1500 Finnish companies’ usage, needs and implementation difficulties of management accounting systems. The study uses quantitative, qualitative and mixed methods to answer the research questions. The empirical data used in the study was gathered through structured interviews with randomly selected companies of varying sizes and industries. The study answers the three research questions by analyzing the characteristics and behaviors of companies working in Finland. The study found five distinctive groups of companies according to the characteristics of their cost information and management accounting system use. The study also showed that the state of cost information and management accounting systems depends on the industry and size of the companies. It was found that over 50% of the companies either did not know how their systems could be updated or saw systems as inadequate. The qualitative side also highlighted the needs for tailored and integrated management accounting systems for creating more value to the managers of companies. The major inhibitors of new system implementation were the lack of both monetary and human resources. Through the use of mixed methods and design science a new and improved sophistication model is created based on previous research results combined with the information gathered from previous literature. The sophistication model shows the different stages of management accounting systems in use and what companies can achieve with the implementation and upgrading of their systems.

Accounting treatment for intangible assets acquired in a business combination under IFRS

The role of intangible assets and the amount of business combinations have increased significantly during the last decades which has caused the need to reform and harmonise the accounting treatment for acquired intangible assets. The aim of this study is to find out how the new accounting standard for business combinations, IFRS 3, has affected the accounting treatment for identifiable intangible assets and goodwill in the examined media companies between 2005 and 2014. The most significant reforms introduced by IFRS 3 have been goodwill impairment test and the fair value accounting for acquired intangibles. This study is conducted by using a descriptive analysis and the empirical data consists of financial statement information of listed Finnish and international media companies. The main objectives of IFRS 3 have been to reduce the amount of acquisition cost allocated to goodwill and allow companies to recognise new intangible assets separately from goodwill. The results of this study show that the amount of the acquisition cost allocated to goodwill has decreased during the examined period and due to the fair value accounting, business acquisitions have made new intangible assets visible that otherwise would have not met the recognition criteria under IAS 38. The application of IFRS has revealed a big amount of invisible assets in the balance sheets but at the same time this has reduced the comparability between companies.

Internationalization of a Finnish accounting firm to Russian markets

Despite the unstable situation at the moment in Russia, the Russian market and St. Petersburg have been a very attractive from the point of view of Finnish companies. The objective of this research was to define how a Finnish accounting firm should perform its market entry to Russian markets as a part of its internationalization process. In addition, the special characteristics that support the internationalization to Russia were examined together with the implications from the behavior of potential customers at the market. The actual market entry mode was developed based on the theories of Uppsala model, transaction cost economics and the network approach. Additional emphasis was given for the service point of view. The primary data in this research was collected through semi-structured interviews with professionals from the Russian market. The results of this research show that there exists potential especially at the accounting markets in Russia. However, the current unstable situation and sanctions in Russia have led to situation where the price-sensitivity among customers is high, and costs savings are searched from multiple processes in organizations. Therefore, the accounting company should perform its market entry in small incremental steps to decrease the risks involved, and to gain specific market knowledge before committing more resources into Russian markets. A simplified process was developed to evaluate the suitable market entry mode. As a result, the level of commitment and market knowledge affect the final entry model of the firm, as well as defined goals for the particular market.

The role of management accounting systems and venture capital investors for start-up firms

The role of star-up firms in economy and the importance of venture capital investors for the growth of start-up firms have been highlighted in recent years. The growth challenges of start-up firms consist of fast changing environment, the availability of venture capital funding and the development of firm management in the growth phase. A growing number of studies have focused on management accounting systems and venture capital in start-up and growth firm context. In this thesis the role of management accounting systems and venture capital investors is considered in the growth phase of firm development. The theoretical objective of this thesis is to construct a theoretical framework in order to describe the importance of management accounting systems and venture capital investors in start-up firms. The practice orientated objective of this thesis is to study the application of management accounting systems and management accounting based information in start-up firms in high-technology industry as well as the impact of venture capital for management accounting system design. In addition, the growth challenges of start-up firms are studied in order to understand the context in which management accounting systems are used. The research approach of theoretical part is conceptual as the theoretical framework is constructed by combining literature on firm growth, management accounting and venture finance in order to analyse the phenomenon. The action-orientated research approach is appropriate for analysing and describing of the studied phenomenon through empirical evidence. The empirical evidence was collected through interviews with three experts in start-up firm accelerator centers, four representatives of start-up firms and one venture capital investor. The results indicate that the growth challenges of stat-up firms are not related to the development of management accounting systems. Managers of start-up firms expressed a positive attitude towards management accounting systems that improve efficiency of operations. In start-up firms flexible and adjustable management accounting practices, such as budgets, cash flow calculations and future-orientated analysis tools, are applied that support planning and coordination of operations. The results indicate that venture capital investors affect the provision and the quality of management accounting information during the investment process. In addition, venture capital investors enhance the use of management accounting information for internal coordination in start-up firms. By applying the theoretical framework in the analysis, it can be stated that by acting as support function management accounting systems facilitate start-up firms development.

POLITICAL RISK IN FOREIGN DIRECT INVESTMENT IN THE RUSSIAN ELECTRIC POWER SECTOR

Russia approved ambitious reform plan for the electricity sector in 2001 including privatisation of the country’s huge thermal generation assets. So far the sector had suffered from power shortages, aging infrastructure, substantial electricity losses, and weak productivity and profitability numbers. There was obvious need for foreign investments and technologies. The reform was rather successful; the generation assets were privatised in auctions in 2007-2008 and three European energy companies, E.On, Enel and Fortum, invested in and obtained together over 10% of the Russian production assets. The novelty of these foreign investments serves unique object for the study. The political risk is involved in the FDI due to the industry’s social and economic importance. The research’s objective was to identify and analyse the political risk that foreign investors face in the Russian electricity sector. The research had qualitative study method and the empirical data was collected by interviewing. The research’s theoretical framework was based on the existing political risk theories and it focused to understand the Russian government in relation to the country’s stability and define both macro-level and micro-level sources of political risk for the foreign direct investments in the sector. The research concludes that the centralised and obscure political decision-making, economic constriction, high level of governmental control in economy and corruption form the country’s internal macro-level risk sources for the foreign investors in the sector. Additionally the retribution due to the companies’ home country actions, possible violent confrontations at the Russian borders and the currency instability are externally originated risk sources. In the electricity industry there is risk of tightened governmental control and increased regulation and taxation. Similarly the company-level risk sources link to the unreformed heating sector, bargaining with the authorities, diplomatic stress between host and home countries and to companies and government’s divergent perspective for the profit-making. The research stresses the foreign companies’ ability to cope with the characteristics of Russian political environment. In addition to frequent political and market risk assessment, the companies need to focus on currency protection against rouble’s rate fluctuation and actively build good company-citizenship in the country. Good relationship is needed with the Russian political authorities. The political risk identification and the research’s conclusive framework also enable political risk study assessments for other industries in Russia

Reuse of electric vehicle battery in uninterruptible power supply

Tässä diplomityössä tarkasteltiin Nissan Leaf -sähköauton käytetyn litiumakun soveltuvuutta UPS-varavirtalaitteen energialähteeksi. Kun akku on heikentynyt niin ettei sen kapasiteetti enää ole riittävä autokäyttöön, sitä voidaan kuitenkin vielä hyödyntää muissa sovelluksissa, kuten UPS-laitteessa. Työ sai alkunsa osana GreenDataNet-projektia, jossa pyritään kehittämään datakeskuksiin ympäristöä vähemmän kuormittavia ratkaisuja käyttämällä uusiutuvia energialähteitä, akkujen uusiokäytöllä, sekä energianhallinnan optimoinnilla. Työssä käytiin läpi akun ja sen ohjausjärjestelmän ominaisuuksia, kerrottiin UPS:in ohjelmistoon tehdyistä muutoksista sekä esitettiin testitulokset. Lopputuloksena todettiin akun sopivan muuten hyvin UPS-käyttöön, mutta vaadittu päivittäinen kennojännitteiden tasaus ja sen aiheuttama katkos energian saatavuuteen heikentää UPSin käyttövarmuutta kuorman suojauksessa. Lopussa esitettiin muutamia ehdotuksia tämän ongelman korjaamiseksi.